Country Report Gabon June 2009

Outlook for 2009-10

• The death of the Gabonese president, Omar Bongo Ondimba, has plunged the country into a period of political uncertainty.
• Given that the ruling Parti democratique gabonais (PDG) is the only party with a nationwide structure, its candidate has a strong chance of becoming Gabon's next president.
• There are substantial risks that the country could face a prolonged period of political instability, as political leaders could ignite ethnic tensions in their bid to win the presidency.
• Despite the recent sharp rise in oil prices, oil revenue is expected to be significantly lower than in 2009, but the government is expected to post surpluses in? 2009 and 2010.
• Real GDP is forecast to contract by 2.3% in 2009, as the global economic downturn hits activity in the non-oil sectors, and to grow by 3% 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, before rising again in 2010, to 3.5%, driven by commodity price increases and strong domestic demand.
• The current account is forecast to narrow to 4.7% of GDP in 2009 owing to the fall in exports caused by low average oil prices, before widening to 5.7% of GDP as a result of higher commodity prices.

Monthly review

• Mr? Bongo died on June 8th in a Spanish clinic from intestinal cancer.
• Constitutional rule has been respected and the president of the Senate, Rose Rogombe, has been sworn in as interim head of state. She has started organising a fresh presidential poll, which is due to take place before end-July.
• Political parties have expressed their support to delay the presidential election to allow the voter register to be updated.
• Mr? Bongo's son and minister of defense, Ali Bongo Ondimba, is a strong contender to succeed his father, but he will face tough competition from other leaders within the PDG.
• The government has reached an agreement with employers' associations and trade unions. This could pave the way for a 30-month social truce and has led to the suspension of the majority of ongoing strikes.
• Political uncertainty could affect economic performance, as investors are expected to delay some investments.

Source: Country Report