MOGADISHU (Halbeeg News) – The economic growth of Somalia is expected to increase this year as the horn of African country struggled to recover from subsequent severe droughts in 2016 and 2017 that had a negative impact on farming output.
According to an article published by Reuters, the International Monetary Fund said it projected gross domestic product at 3.1 per cent this year from 2.3 per cent in 2017. Somalia exports bananas and also produces sorghum.
“Economic activity in 2018 is recovering from the 2016–17 drought. A favourable rainy season is supporting the economic recovery, particularly in the agricultural and livestock sectors; this is leading to a decline in food prices,” the fund said in a statement.
The IMF expects inflation to reach 3.5 per cent this year, down from 5.5 per cent in 2016.
The development comes less than a month after Somali Prime Minister, Hassan Ali Kheyre announced that the country’s gross domestic product would expand from 2.5 per cent in 2017.
Last year, Somali government reached tax agreements with airlines and telecom companies.
PM Kheyre said accelerated structural reforms by the government led to the achievement of higher economic growth.
The PM forecasted that the country’s economy grew by an average of between 3-4 per cent as the private sector increased their contribution to the economy.
“Our GPD rose to 2.3% last year, and we hope that it will hit 3 to 4%. And the inflation rate is expected to decrease by 6%. The number of new companies registering with the government doubled,” he said.
Last October, Somali cabinet approved $340,060,149 for next year.
The figure is about 24 per cent rise from last year’s $274.6 million budget.
The government expects $189.9m (55.8%) from internal sources, while it anticipates $124.6m (44.2%) from the donor community.
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