Country Report Djibouti November 2006

The domestic economy: Strong GDP growth is expected in 2006

Revised estimates from the IMF suggest that GDP growth in Djibouti will increase significantly in 2006 as the effects of new investments in port infrastructure start to be felt. Real GDP growth has been relatively stable, at around 3%, over the past three years, up from about 2% at the start of the decade. The latest estimates suggest that growth in 2006 will exceed 4%. Growth has been supported by the Doraleh oil and petroleum terminal, which was opened in February 2006, while work on the adjacent new US$300m container terminal is also now under way and is expected to be completed by 2008 (May 2006, The domestic economy: Infrastructure). The economy is still facing moderate inflationary pressures. Although there have been no official data since September 2005, pressure has been growing since the low point of 2002 when the annual rate of inflation stood at 0.6%. Higher food prices, rising world oil prices and the effects of strong economic growth pushed the rate to an estimated 3.5% in 2005, and increasing food prices have continued to be a problem in 2006 owing to the effects of drought in the region. However, the easing of the food security situation is likely to have helped to moderate these pressures in the second half of 2006.

Djibouti: real GDP growth and consumer price inflationa
(% change year on year unless otherwise indicated)
 2003200420052006
Nominal GDP (Dfr m)111,530118,400125,976135,205
Real GDP3.23.03.24.2
Consumer prices2.03.13.5b3.0
a IMF estimates. b Economist Intelligence Unit estimate.
Sources: IMF, World Economic Outlook, September 2006; Ministère de l'économie, des finances et de la planification, chargé de la privatisation, Bulletin d'information économique du troisième trimestre 2005.

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© 2006 The Economist lntelligence Unit Ltd. All rights reserved
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