Country Report Gabon April 2009

Outlook for 2009-10

• The president, Omar Bongo Ondimba, who has skilfully eliminated most forms of political opposition through a combination of co-option and repression, will remain the dominant political figure.
• As the political system largely depends on MrBongos patronage network, the greatest risk to stability would be his sudden departure from power.
• The sharp decline in oil revenue caused by falling oil prices, combined with the rise in unemployment stemming from the impact of the global downturn on the forestry and mining sectors, is likely to lead to growing social unrest.
• The forecast sharp fall in oil prices will also have a major influence on the governments economic policy, as it will be the first time since 2002 that the government risks running into payment difficulties.
• Despite an increase in oil output, real GDP growth is forecast to contract by 0.1% in 2009, as the global economic downturn hits non-oil sectors, before rising to 2.9% in 2010, as activity in the mining and forestry sectors picks up.
• Average annual inflation is expected to fall to 3% in 2009, reflecting lower global food and oil prices, and to rise again in 2010, to 3.5%, owing to commodity price increases and strong domestic demand.
• The current account is forecast to move into deficit, by the equivalent of 3.8% ofGDP in 2009 and 1.8% of GDP in 2010, owing to the expected sharp fall in oil prices.

Monthly review

• Gabon has stepped up military patrols along its borders after new intelligence suggested that an attack against Gabonese territory was being prepared by a group that had been engaging in violence in neighbouring countries.
• Relations with France have come under strain following the high exposure given by the French media to corruption allegations against Mr Bongo.
• The Economist Intelligence Units 2008 democracy index has ranked Gabon 139th of 167 countries, reflecting the centralisation of power in the hands of Mr Bongo.
• The IMF has completed the second and third performance reviews under the three-year staff-monitored programme, granting waivers of non-performance for the targets missed as the government has taken some remedial actions.
• Real GDP growth slowed from 5.6% in 2007 to 2% in 2008, owing to a small fall in oil output and the negative effects of the global economic downturn on the mining and forestry sectors in the second half of the year.

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