The annual publication of the IMF, World Economic Outlook, has forecasted the Eritrea economy to be the fastest growing in the Horn of Africa in 2012, registering a real GDP growth of 7.5 percent in the period. Released on April 17 the report indicates that Eritrea’s growth would be driven by strong mineral export, agricultural output and infrastructural development.
The forecast also shows that the GDP growth of the neighbouring Ethiopia would be 5 percent for the period in question, a decline from the 7.5 percent of 2011.
The report further anticipates the consumer price index in Eritrea to go down to 12.3 percent in the year from 13 percent from in 2011. The data also shows that the real GDP growth for the year 2013 will continue at 3.4 percent but forecasts the country to actually experience negative real GDP growth of 3.2 percent for the year 2017. At the same time the forecast puts the figures for Ethiopia at 5.5 and 6.5 percent, respectively for 2012 and 2017.
According to the data of the [Ethiopian] Central Statistical Authority (CSA), the headline inflation for the month of April has gone down from its mid-thirties figure of the past couple of months to 29.8%. According to CSA, the decline is marked by the major price change in the food basket of the consumer price index due to high agricultural harvest recorded in the year.
On the other hand, regionally, the report said Sudan’s economy has shown a decline of 3.9 percent last year while it was also expected to continue the decline and do it big 2012, which is to decelerate by -7.3 percent. Following the secession of South Sudan, a major shock to Sudan’s oil revenue and recurrent conflict with its southern neighbour is said to be hurting the one strong economy of the Horn.
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