Wednesday, April 22, 2009

Benin Politics : BENIN ECONOMY

Benin 's GDP growth likely to drop in 2009

The growth rate of Benin's Gross Domestic Product is likely to drop between 4.4% and 3.8% in 2009 while initial forecasts suggesting 6.1 %, according to official sources.

Source: PANA

The drop is the result of the impact of the international economic crisis.

According to financial experts, the international financial crisis will have adverse effects on the country's economy for four reasons -- reduction in public development aid, drop in exports (highlighted by the drop in customs revenues in February), drop in money transferred from abroad and drop in foreign direct investments (FDI).

Benin's economic growth peaked at 5% in 2008 from the 2007 figure of 4.6% and the government forecast last January a 6.1% growth for 2009.

The experts said the 2008 macroeconomic results were good.

According to a recent IMF report, published at the beginning of this month, «the Beninese economic activity kept on improving in 2008 despite adverse effects of the explosion in foodstuffs and energy products prices and of the international financial crisis. »

The actual GDP growth reached 5% (highest level since 2001) thanks to the good agricultural production, building and civil engineering works, and trade.

Inflation dwindled in the last four months of 2008 to reach an annual average of 8% after being at its peak in August 2008 following decisions by public authorities to maintain high prices for primary foodstuffs and international energy products.

Public Finances were consolidated thanks to an appreciable increase in receipts and a more rigorous management of public expenditures in the second half of 2008.

The deficit in current transactions, including donations, dropped to reach 8.3% of the GDP while it peaked at 9.9% the previous year, the financial institution said.

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