Country Report Djibouti November 2006

Outlook for 2007-08: Inflation and exchange rates

High international oil prices, combined with higher economic growth and continued high public spending, will cause continued inflationary pressure over the forecast period, although monetary policy may help to contain much of this. In addition, although we expect that oil prices will start to ease in 2007, prices are likely to fall only gradually. As a result, we expect inflation to remain relatively high by recent standards, averaging 3% in 2007-08. The Djibouti franc is expected to remain pegged to the US dollar, at Dfr177.72:US$1, and as a result it will mirror US dollar movements against the euro in 2007-08.

© 2006 The Economist lntelligence Unit Ltd. All rights reserved
Whilst every effort has been taken to verify the accuracy of this information, The Economist lntelligence Unit Ltd. cannot accept any responsibility or liability for reliance by any person on this information
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