Cote d'Ivoire remains our top Sub-Saharan African (SSA) growth pick in 2016, when the 8.7% real GDP expansion we anticipate will outstrip the 7.8% growth we predict in our second-placed growth market, Ethiopia. Cote d'Ivoire stands out as offering serious growth potential on an increasingly stable and diversified base. The country is generating major investor interest and has been a popular topic of discussion in BMI's meetings with clients over the past 12 months.
We project that Cote d'Ivoire's budget deficit will come in narrowly in 2016, despite an expansionary budget which is expected to see spending rise by over 11%. Strong economic growth and an increase in revenues will combine to ensure that the deficit does not become unmanageable, despite, at 3.4% of GDP, being wider than usual - the average deficit over the decade to 2015 was 2.4%.
We project that Cote d'Ivoire's current account deficit will widen over the next several years, thanks to a combination of falling cocoa prices and strong capital goods imports related to rising investment. Nevertheless, the shortfall will not exceed 3.5%, and if anything a wider current account deficit is a positive for Cote d'Ivoire at present, as productive imports will help boost economic growth in the years to come.
The issuance of a French arrest warrant for the speaker of Cote d'Ivoire's parliament, Guillaume Soro, has raised questions regarding the state of Ivorian politics in the wake of the October 2015 elections. Namely, has there been a 'victors' justice' in the country over the past five years, and will the newfound peace hold during the 2020 presidential elections.
Our broad outlook is dependent on the maintenance of a stable political situation that allows for significant levels of foreign investment and the implementation of the government's reform and development plans. Such stability is not a certainty, however, and for this reason ethnic and political tensions pose the key risk to the country's economic prospects.
The economy's reliance on cocoa exports means that poor weather could seriously damage exports.
|e/f = BMI estimate/forecast. Source: National Sources|
|Real GDP growth, % y-o-y||8.5||9.0||8.7||8.6|
|Nominal GDP, USDbn||34.6||31.9||34.5||39.7|
|Consumer price inflation, % y-o-y, eop||0.9||1.4||2.6||2.6|
|Exchange rate XOF/USD, eop||542.11||624.72||596.32||570.40|
|Budget balance, % of GDP||-1.9||-3.4||-3.2||-3.3|
|Current account balance, % of GDP||-0.3||-1.4||-2.1||-2.8|
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