Outlook for 2011-12

Political stability is expected to improve in 2011-12 compared with the previous two years. However, the Economist Intelligence Unit expects outbreaks of unrest, particularly after the upcoming announcement of the results of the legislative election held on February 13th 2011. The incumbent, Idriss Déby, is expected to win the presidential poll due in April 2011. In view of the outlook for buoyant world oil prices and faster economic growth, we now expect the fiscal deficit to be equivalent to 11.7% in 2011 (previously 13.4%) and 12.2% of GDP in 2012 (previously 14.7%). The improved security situation will yield a dividend in terms of economic growth, particularly in public works and the oil sector. Consequently, real GDP is now forecast at 5.5% in 2011 (4.5% previously), accelerating to 6% in 2012 (previously 4%). In view of the latest outlook for global commodity prices inflation is now forecast at 8% in 2011 (previously 5%) and 2% in 2012 (previously 4%). Current-account deficits equivalent to 36.1% and 33.2% of GDP are forecast respectively in 2011 and 2012.

The political scene

After repeated postponements a legislative election was finally held in Chad on February 13th. The results had not been published at the time of writing, but it seems likely that the opposition will not make a significant dent in the crushing parliamentary majority of the ruling party, Mouvement patriotique du salut. In January the president granted an amnesty to all rebel prisoners of war. The Chadian army intervened in the neighbouring Central African Republic in December to suppress a rebel attack on Birao.

Economic policy

The regional banking watchdog, Commission bancaire de l'Afrique centrale (Cobac), outlined measures to strengthen its supervision of banks at its annual meeting held on December 20th.

The domestic economy

The Chadian government is expected to start directly selling some 44,000 barrels/day of crude oil soon, after reportedly striking a deal with the operator of the Doba fields, Exxon-Mobil. A recent report by a global charity, Action Against Hunger, has revealed disturbing levels of malnutrition in western Chad.

Foreign trade and payments

After a meeting in mid-February with the Chinese foreign minister, Yang Jiechi, in the Chadian capital, N'Djamena, Mr Déby, announced that he hoped to boost co-operation between the two countries, particularly in the fields of health, infrastructure, telecommunications and health.