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Cote d'Ivoire Country Risk Reports Q2 2015

Cote d'Ivoire Country Risk Reports Q2 2015

Core Views

Despite a moderate downward revision to our 2015 real GDP growth forecast for Côte d'Ivoire, at 8.6% it is still one of the fastest-growing economies in Sub-Saharan Africa. Private consumption and gross fixed capital investment will be the major drivers of this expansion. Bipartisan support will ensure incumbent President Alassane Outtara's victory in October elections, and with it policy continuity. However, although we do not expect a return to civil war in 2015,there are a number of challenges to security, including striking soldiers and high-profile trials.

Côte d'Ivoire's current account deficit will widen in 2015 as it returns to trend level. The deficit narrowed in 2014 thanks to a surge in cocoa production, but we believe that the effect of this has petered out. Imports will rise thanks to the development of new industries.

Côte d'Ivoire's budget deficit will widen to 3.3% of GDP in 2015 as the government drives forward with infrastructure projects. This is no cause for concern, however, as the expenditure will drive future growth and is well covered by international donor funds and borrowing.

Major Forecast Changes

Real GDP growth estimate/forecast revised from 9.1% in 2014 and 8.8% in 2015 to 8.4% and 8.6% respectively.


Executive Summary
Core Views
Major Forecast Changes
Key Risks To Outlook
Chapter 1: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
Political Fault Lines Will Pose Risk To Security
Bipartisan support will ensure incumbent President Alassane Ouattara's victory in October elections, and with it policy continuity.
However, although we do not expect a return to civil war in 2015, there are a number of challenges to security.
Table: Political Overview
Long-Term Political Outlook
Post-Conflict Challenges To Linger
While the establishment of a cohesive national government has set the stage for an impressive economic recovery in Côte d'Ivoire,
the country's political system remains brittle and ethnic tensions are easily inflamed. In our core scenario, BMI predicts that Alassane
Ouattara's government will be only partially successful in addressing the country's political, security, and social challenges and that
tensions will remain high over the coming years. A more stable outcome is possible, though highly unlikely, while we ascribe a 10-20%
probability to a repeat of the 2010-2011 political crisis between now and 2020.
Chapter 2: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Activity
Investment And Private Consumption To Drive Robust Real GDP Growth
Despite a moderate downward revision to our 2015 real GDP growth forecast for Côte d'Ivoire, at 8.6% it is still one of the fastestgrowing
economies in Sub-Saharan Africa. Private consumption and gross fixed capital investment will be the major drivers of this
expansion.
TABLE: Eco nomic Acti vit y
Fiscal Policy
Budget Deficit Will Widen In 2015
Côte d'Ivoire's budget deficit will widen to 3.3% of GDP in 2015 as the government drives forward with its infrastructure spending
programme. The deficit is no cause for concern, however, as the expenditure will drive future growth and is well covered by international
donor funds and borrowing.
TABLE: Fiscal Polic y
Monetary Policy
Demand-Pull Factors Will Keep Inflation Positive
Inflation in Côte d'Ivoire will trend upwards through the next 12 months. Even so, price growth in the West African country will be among
the lowest in Sub-Saharan Africa, and it will remain well short of the regional central bank's inflation target of 3.0%.
TABLE: Monetar y Polic y
Balance Of Payments
Current Account Will Widen But Remain Sustainable
Côte d'Ivoire's current account deficit will widen in 2015 as it returns to trend level. The deficit narrowed in 2014 thanks to a surge in
cocoa production, but we believe that the effect of this have petered out. Imports will rise thanks to the development of new industries.
TABLE: Curent Acount
Cote d’Ivoire Q2 2015
Chapter 3: 10-Year Forecast
The Ivorian Economy To 2024
A Bright Decade Ahead, But Fragilities To Persist
While growth over the next 10 years is expected to improve on the last decade, political uncertainty continues to exert a downward pull
on the country's potential. In our view, high poverty levels and a frail business environment will represent the main obstacles to growth
over the longer term.
TABLE: Long-Term Macroeco nomic Forecasts
Chapter 4: Operational Risk
SWOT Analysis
Operational Risk Index
Operational Risk
TABLE: Operational Risk
Availability Of Labour
TABLE: Sub -Sahara n Africa – Availabilit y Of Labour Ris k
TABLE: Top 10 Source Cou ntries For Migra nt Wor kers
Crime Risk
TABLE: Sub -Sahara n Africa – Crime Ris k
Chapter 5: BMI Global Assumptions
Global Outlook
New Era For Oil
Table : Global Assumptio ns
Table: Developed States, Real GDP GrowtH, %
Table : BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
Table : Emergi ng Mar kets , Real GDP Growth , %

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