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EAC economies hopeful with positive growth projections
East African Heads of State from left Presidents Pierre Nkurunziza (Burundi), Paul Kagame (Rwanda), Mwai KIbaki (Kenya), Jakaya Kikwete (Tanzania), Yoweri Museveni (Uganda) and Abeid Karume (Zanzibar) at a past function in Tanzania. EAC economies hopeful of positive economic growth. File Photo
Posted Monday, May 24 2010 at 00:00
With a forecast of an average growth rate of 6.1 per cent for East African economies, the region’s future looks bright, even after the global economic crisis.
The growth rate is a rise over 4.8 per cent in 2009 when the global economy was reeling from the financial crisis that broke out in mid-September 2008. Burundi will see its GDP growth rise by 1.5 per cent.
“Our economic growth projection stands at 6 per cent this year, after experiencing sluggish growth of 4.5 percent in 2009,” Bank of Burundi Governor Gaspard Sindayigaya told The East African.
The real GDP growth is expected to be 3.6 per cent in 2010 and 4.5 per cent in 2011, driven by higher food production and investment.
Inflation is forecast to fall to 10 per cent in 2010 and 8 per cent in 2011 because of higher food production.
Burundi’s current account deficit narrowed slightly as a share of GDP in 2009, according to the IMF, as imports fell by 20 per cent and exports rose by 12 per cent.
Rwanda forecasted its economy to bounce back from 6 per cent in 2009 to 7 per cent in 2010, accounting for 1 per cent increase in growth rate.
“Rwanda GDP growth is expected to rebound to 7 per cent in 2010 up from 6 per cent recorded last year,” National Bank of Rwanda Governor, François Kanimba told The East African.
Real GDP growth is forecast at 6 per cent in 2010, picking up to 7.5 per cent in 2011 on the back of higher external demand and robust performances in services and construction.
The inflation rate is forecast to average 8.5 per cent in 2010-11, but this remains vulnerable to changing weather patterns and the risk is on the upside.
Trade, particularly with the EAC, is expected to pick up and the current-account deficit is forecast at around 7-8 per cent of GDP in 2010-11.
Continuing reforms in support of the Economic Development and Poverty Reduction Strategy and the increased focus on improving the business environment, with support from the development partners, are aimed at further improving growth prospects.
Slight rise
Tanzania’s economy is projected to grow by 6.5 per cent in 2010 compared with 6 per cent in 2009.
“Last year our GDP growth was 6 per cent, but in 2010, we forecast 6.5 per cent and above,” Bank of Tanzania (BoT) Governor Prof Benno Ndulu observed.
Real GDP growth is expected to increase to 6.4 per cent in 2010 and 7.1 per cent in 2011 as investment, trade and tourism pick up slowly.
The current-account deficit is forecast to fall to 6.6 percent of GDP in 2010 and 5.9 per cent in 2011 because of strong exports and decent economic growth, partly financed by rising foreign direct investment, particularly in the mining sector.
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