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Country Risk Service Equatorial Guinea November 2011

  • Publication Date:November 2011
  • Publisher:EIU
  • Product Type: Report
  • Pages:24

Country Risk Service Equatorial Guinea November 2011

Overview

The major threat to political stability in 2012-13 would be if the elderly president, Teodoro Obiang Nguema Mbasogo, left office suddenly, owing either to ill health or a coup, which could create a destabilising power contest. In line with its latest hydrocarbons price forecasts, the Economist Intelligence Unit expects a fiscal surplus equivalent to 0.9% of GDP in 2012 and 1.6% of GDP in 2013, as oil and gas receipts form the bulk of government revenue. Given our hydrocarbons forecast, we expect real GDP growth to slow to 2.9% in 2012, before picking up again to 3.9% in 2013. Despite a weaker outlook for the CFA franc, lower global commodity prices will help to reduce average annual inflation to 6% in 2012 and 5.5% in 2013. Given our forecast for the price of oil-the country's main export-and economic growth, we expect current-account deficits equivalent to 12.3% of GDP in 2012 and 8.6% of GDP in 2013.

Key changes from last month

Political outlook

A referendum to approve the proposed constitutional reform was held on November 13th and, according to preliminary results, received overwhelming support. Critics of the government view the reform simply as an attempted ploy on the part of the regime to improve its international image rather than something that will bring substantive change.

Economic policy outlook

In the World Bank's latest "Doing Business" report, Equatorial Guinea has made some minimal progress with respect to its previous year's ranking. However, its overall ranking is still a lowly 155th position out of 183 countries-highlighting the urgent need for a more pro-business stance.

Economic forecast

The economy remains vulnerable to a fall in oil prices. Given our forecast for global oil prices, we expect real GDP growth to slacken to 2.9% next year, before recovering to 3.9% in 2013.

This report covers the following industry codes:
SIC Code: 60
NAICS Code: 52

Please Note: Due to the Nature of This Report The Toc is Not Available

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