2013-01-15 13:29:18 - Democratic Republic of the Congo Business Forecast Report Q1 2013 - a new country guide report on companiesandmarkets.com

We expect the Democratic Republic of the Congo (DRC) will experience robust economic growth for the duration of our 2013-2017 forecast period, with average annual real GDP coming in at 6.7%.

This growth will be powered by investment in the mining sector and domestic consumption, which is rising from a very low base.

The DRC is, and will remain, one of the most difficult places in which to do business worldwide. We do not anticipate that the country´s inefficient administration or woeful bureaucracy will be meaningfully improved over the course of our forecast period.

We believe that the M23 rebellion will be contained to the east of the country, and expect that the security situation in Katanga and elsewhere will remain relatively stable.

Key

 

 

Risks To Outlook

Were rebels in North Kivu to expand their area of operations outside of the province, we could see the security situation in neighbouring provinces deteriorate rapidly – which would cause us to re-evaluate our growth forecasts.

Dissatisfaction with President Joseph Kabila over his government´s handling of the crisis in North Kivu is building. Protests in major cities are likely, and we believe that political risks to Kabila´s administration are rising.

The DRC is highly dependent on copper exports, which are largely sent to China. Were China´s economic slowdown to be more pronounced than we anticipate, we would have to re-evaluate our forecasts of export-led growth.

Major Forecast Changes

New historical figures have caused us to revise up our economic growth estimates for 2011. Forecasts from our Mining Team have caused us to alter our growth figures upwards for 2015, when a series of new mines will come online.

We have revised up our predictions for the DRC´s fiscal deficit in 2013 from 3.4% of GDP to 3.7%. We predict that the deficit will rise slightly over the duration of our forecast period, reaching 4.4% of GDP in 2017.

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