Country Report Swaziland January 2008

Outlook for 2008-09: Economic growth

Real GDP growth is estimated to decline to 2.3% in 2007. The main reason for the slowdown is the drought, which heavily affected agricultural output, with subsequent knock-on effects in manufacturing (agri-processing). Although the Swaziland Sugar Association forecasts output in the 2007/08 crop year (April-March) at 633,000 tonnes (up from 623,357 tonnes in 2006/07), crop failures elsewhere and food security problems have affected around 40% of the population. However, good early summer rains suggest improved crop production over the forecast period, which will push real GDP growth to 2.5% in 2008-09. Higher growth will be constrained by difficulties in the sugar and textile industries as export levels are undermined by the expected EU price reductions and competition from Asian producers respectively.

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