Even with the post-conflict peace dividend waning, real GDP growth in Cote d'Ivoire will continue to fire on all cylinders in the coming years. Growth in 2017 will be driven by both private and public investment, coming on the back of rising consumer spending power, a strengthening business environment and rising commodity production. We forecast an 8.4% real GDP expansion in 2017, which will represent the highest growth rate in Sub-Saharan Africa (SSA) according to our forecasts.
Cote d'Ivoire's government will prevent its fiscal deficit from widening too far even as it increases spending, thanks to its progress in widening the tax base. Debt will remain at a manageable level through sensible borrowing practices, drawing from concessional and regional lenders rather than returning to international debt markets. This fiscal prudence means that Cote d'Ivoire will remain highly attractive to investors, in contrast to countries such as Ghana where debt levels have skyrocketed and borrowing has become more expensive as a result.
In common with the rest of the West African franc currency bloc, Cote d'Ivoire will continue to enjoy low and stable inflation over the next 12 months and beyond, albeit rising modestly over the course of 2017. This will keep investor interest elevated, especially as regional competitors Ghana and Nigeria will continue to struggle with high and volatile price growth and - in Nigeria's case - negative real interest rates.
The removal of US sanctions against Cote d'Ivoire will send a positive signal to international investors that the country is cementing its recovery from its 2010/11 civil war. There remain salient risks to security in both the near- and longer-term timeframes, but the overall picture is one of increasing stability.
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|
|Nominal GDP, USDbn||34.3||32.5||34.7||38.0|
|Real GDP growth, % y-o-y||8.5||10.3||9.1||8.4|
|Consumer price inflation, % y-o-y, eop||0.9||1.3||1.0||2.3|
|Exchange rate XOF/USD, eop||540.28||602.51||624.72||630.73|
|Budget balance, % of GDP||-1.9||-3.4||-3.6||-3.4|
|Current account balance, % of GDP||-0.3||-2.3||-3.6||-3.1|
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