Country Report Benin April 2008

Outlook for 2008-09: International assumptions

Benin: international assumptions summary
(% unless otherwise indicated)
Real GDP growth
Exchange rates
Financial indicators
€ 3-month interbank rate3.
US$ 3-month commercial paper rate5.035.062.352.93
Commodity prices
Oil (Brent; US$/b)65.372.791.385.0
Cotton (US cents/lb)58.664.072.878.5
Food, feedstuffs & beverages (% change in US$ terms)10.237.827.4-3.7
Industrial raw materials (% change in US$ terms)49.610.8-8.0-13.1
Note. Regional GDP growth rates weighted using purchasing power parity exchange rates.

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We expect global growth to slow to 3.7% in 2008 (on a purchasing power parity basis), reflecting the troubles afflicting the US economy and their global repercussions, before rising modestly, to 3.9%, in 2009. Growth in the EU, one of Benin's main trading partners, is forecast to fall to 1.8% in 2008 and 2.1% in 2009. We now forecast that average world oil prices will jump sharply in 2008, before easing slightly in 2009. Cotton prices are expected to stage a further recovery to 72.8 US cents/lb in 2008 and 78.5 US cents/lb in 2009. However, developments in Benin's cotton industry will be influenced more by domestic cotton prices and reforms in the sector.

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