2013-12-11 13:21:33 - Fast Market Research recommends "Cameroon Business Forecast Report Q1 2014" from Business Monitor International, now available
Economic expansion in Cameroon is accelerating, and we forecast real GDP growth of 4.6% in 2014. The country's economy will out -perform its Central African peers, averaging 4.8% real GDP growth between 2014 and 2017.
Faltering oil production and high import demand will cause Cam -eroon's current account deficit to widen to 6.0% in 2014. We expect the shortfall to remain relatively stable over the coming years
High spending on capital projects will keep the country's fiscal deficit wide. The shortfall could expand rapidly if the government is unable to control spending on costly fuel subsidies.
The Banque des Etats de l'Afrique Centrale cut its core interest rate by 250 basis points to 3.25% on October 31 2013. While we do not expect
that the cut will have a significant impact on the regional economy, further loosening is likely in 2014.
Full Report Details at
- www.fastmr.com/prod/751969_cameroon_business_forecast_report_q1_ ..
Key risks to outlook
Escalating violence in the Central African Republic poses a threat to Cameroon's eastern province. We believe that the government will succeed in preventing a major breakdown of political authority, but a larger-than-expected influx of refugees could destabilise the region.
New oil discoveries could lead to a significant change to our balance of payments and government revenue forecasts.
Report Table of Contents:
Key risks to outlook
chapter 1: political outlook
BMi political risk ratings
regional crises threaten Border security
- he deteriorating situation in the Central African Republic has caused over 100,000 people to flee into Cameroon, destabilizing the country's eastern provinces. We expect the ongoing crisis to bolster Cameroon's support for a military intervention in the country's war-torn neighbour.
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chapter 2: economic outlook
BMi economic risk ratings
A Difficult Economic Transition
- Economic growth in Cameroon will remain slightly above that of its Central African peers, but declining oil production and a difficult business environment will prevent economic expansion from reaching the levels seen elsewhere in Africa. We predict that real GDP growth will average 4.8% between 2014 and 2018.
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Balance of payments
Faltering oil production to Hit current account
- Cameroon's already wide current account deficit is set to expand further as oil exports falter and import demand remains high. We predict that the shortfall will widen from 6.0% in 2014 to 6.3% in 2018. Cameroon has a more diversified export basket than many of its Central African peers, and has succeeded in developing trade links with high-growth emerging markets.
taBLe: current account
Fiscal Deficit Stabilising
- Faltering oil revenues and high spending have expanded Cameroon's fiscal deficit in recent years, but we believe that an uptick in economic growth should see the shortfall gradually decline as a proportion of GDP. Risks to this forecast are heavily weighted towards less fiscal discipline and a wider fiscal shortfall.
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regional Monetary policy
ceMac rate cut Will Have Little impact
- Slowing GDP growth in the Central African XOF franc zone has led the bloc's central bank to cut its key interest rate from 3.5% to 3.25% in an attempt to stimulate the economy. BMI doubts that the cut, which takes the rate to its lowest level this century, will have a significant impact given an illiquid financial system and a lack of transfer mechanisms between interest rates and the real economy.
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chapter 3: 10-Year Forecast
the cameroonian economy to 2022
Halting the Decline in Growth
- Over the next ten years we see Cameroon's growth exceeding long-term levels, with many of the gains front-loaded on the back of increased investment. A weak business environment and poor governance have long held down growth, however, and we expect them to continue to constrain economic expansion over the coming decade.
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chapter 4: Business environment
BMi Business environment risk ratings
Business environment outlook
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chapter 5: BMi Global assumptions
unchanged outlook, But Headline risks remain
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