IMF Cuts Congo Republic 2013 Growth Outlook as Oil Output FallsMichael J. Kavanagh
The International Monetary Fund trimmed its 2013 economic growth forecast for the Republic of Congo because of falling oil production.
Gross domestic product is expected to rise 5.8 percent, half a percentage point lower than a prior forecast, the Washington-based lender said today in a statement on its website. The economy expanded 3.8 percent last year, it said.
“Preliminary data points to somewhat weaker economic activity, particularly in the oil sector,” it said.
Congo Republic, sub-Saharan Africa’s fourth-largest oil producer last year, relies on crude to generate 65 percent of GDP and its proven oil reserves are estimated at 2 billion barrels, according to the IMF. The country also produces diamonds and gold, and has deposits of iron ore, copper, zinc and potash, according to the U.S. Geological Survey.
Oil production is projected to drop for at least the third consecutive year to 96 million barrels in 2013 from 115 million barrels in 2010, according to data compiled by the IMF.
The economy may grow at a 6.5 percent average pace between 2014 and 2016 as the country switches crude production from maturing deposits to new fields, leading to unstable levels of output, the IMF said. Inflation will slow to 4.1 percent by the end of the year, from 7.5 percent in 2012, it said.
“The medium-term prospects are generally favorable,” the IMF said. “The main risks to the outlook are related to possible downward pressures on oil prices, stemming from uncertainties in the euro area and emerging markets.” The prospects also depend on a presidential election in 2016 going smoothly, it said.
Economic gains haven’t filtered down to the poor with the country’s poverty rate of 46.5 percent in 2011 “much higher” than other peer oil-exporting countries, the IMF said.
“Congo ought to make growth more inclusive while preserving macroeconomic stability,” it said.