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Country Risk Service Cote d'Ivoire 4th Quarter 2012

  • Publication Date:November 2012
  • Publisher:EIU
  • Product Type: Report
  • Pages:24

Country Risk Service Cote d'Ivoire 4th Quarter 2012

Overview

The president, Alassane Ouattara, will benefit from the parliamentary majority enjoyed by his party, the Rassemblement des républicains (RDR). A top priority for Mr Ouattara will be to make progress with the demobilisation of former rebel fighters and with integrating these fighters and troops loyal to the former president, Laurent Gbagbo, into a new national army. A recent surge in violence is threatening to undermine some of the political stability gains. A return to full-scale civil conflict is unlikely, but a deterioration in security could deter investors and impede the economic recovery.

The public finances will benefit from aid flows, the expansion of the domestic tax base and an economic rebound. The deficit is forecast to shrink as a percentage of GDP from an estimated 6.9% in 2012 to 4% in 2017. The economy will be supported by rising government spending, a construction boom and higher cocoa production. Real GDP growth is forecast at 7% in 2013 and an average annual growth rate of 6.2% in 2014-17. The economic rebound will lead to a large increase in imported goods, widening the current-account deficit.

Key changes from last month

Political outlook

Côte d'Ivoire closed its land and sea borders with Ghana after a spate of attacks that appear to have originated from inside that country.

Economic policy outlook

The government is expected shortly to announce a plan to pay back three missed coupon payments on its US$2.3bn Eurobond by the end of 2014. Servicing of the bond was suspended during the political crisis in 2011.

Economic forecast

The new cocoa season started on October 1st, with uncertainty hanging over the impact of reforms which will transform the pricing, marketing and export of Ivorian beans. We forecast a total crop of 1.4m tonnes.

The IMF has increased its real GDP growth forecast for 2012 from 8.1% to 8.7% following a stronger than expected economic performance in the first half of 2012.

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

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