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World Bank’s report states economy of Liberia is likely to increase by 4.5pct in 2020

World Bank’s report states economy of Liberia is likely to increase by 4.5pct in 2020
The World Bank said, inflation was an estimated 11.7 percent in 2018, slightly lower than in 2017, due partly to high dollarization. Image Credit: StoryBlocks

The World Bank has projected that the economic outlook of Liberia is 'positive' with real GDP growth projected to increase to 4.7 percent in 2019 and 4.8 percent in 2020, underpinned by modest growth in agriculture, fisheries and services.

The World Bank revealed in an outlook of the Liberian economy recently that inflation is expected to decrease further to 10.5 percent in 2019 and 9.5 percent in 2020 because of a stable exchange rate, prudent monetary and fiscal policies, and a modest increase in domestic food production. The current account deficit is expected to remain slightly above 22 percent in both 2019 and 2020, the report stated.

A moderate increase in revenues, combined with a decrease in spending, reduced the fiscal deficit to 3.9 percent in 2018 from 7.9 percent of GDP in 2017. Liberia remains at a moderate risk of debt distress. Total public debt was 41.3 percent of GDP in 2017, about 69.6 percent of which (or 29 percent of GDP) was external," the World Bank reported, APA News noted.

The World Bank pointed out that real GDP growth rebounded to an estimated 3.2 percent in 2018, from 2.5 percent in 2017, driven largely by mining and manufacturing, while agriculture, forestry, and fishing dominate the economy, contributing 70.3 percent of GDP in 2017.

The World Bank said, inflation was an estimated 11.7 percent in 2018, slightly lower than in 2017, due partly to high dollarization (about 70 percent of broad money). The current account deficit improved marginally to 22.4 percent in 2018 from 22.7 percent in 2017 as exports increased due to gold production and a modest recovery of commodity prices. Gross foreign reserves increased slightly from 3.0 months of imports in 2017 to 3.6 months at the end of June 2018.

"The positive outlook could be overshadowed by the risk of debt distress, which could go from moderate to high if borrowing to meet large public investment needs increases while the output of key export sectors declines," the bank said. It observed that a decline in aid inflows after the 2014–16 Ebola crisis and the 2018 completion of the UN peacekeeping mission in Liberia may affect the economic outlook.

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