Eritrea’s economy is projected to grow by 7.5 percent in 2012, according the International Monetary Fund (IMF). The growth is largely driven by an increase in major infrastructure development, solid agriculture output and mineral exports reveal the forecasts taken from World Economic Outlook (WEO) released by the IMF on April 17, 2012. Eritrea will register the fastest growing economy in East Africa this year while Ethiopia coming second with 5.0 percent growth projection.
After coming off a red-hot 17 percent economic growth last year, Eritrea is aiming for 7 to 10 percent annual GDP growth levels between the years of 2012 to 2015.
With the government placing its hope for additional revenue on the development of several international mining projects, despite difficulties of international companies in working with the government, a Canadian mining company signed a deal with the government in 2007 and begun mineral extracting in 2010. Now Eretria is said to be on a brink of a mining boom with the Zara and Koka gold mines both set for production in late 2013. Eritrea’s economy will likely expand by double digit figures next year.
In spite of high fuel prices and some macroeconomic imbalances obstructing the economy, the Washington-based body said Eritrea’s consumer prices will decline from 13.2 percent in 2011 to 12.3 percent this year. Regionally, the report said Sudan’s economy will decline by 7.3 percent due to South Sudan gaining independence in July and taking with it around 75 percent of the formerly united Sudan’s oil outputs.