The International Monetary Fund projects Somalia’s economy will expand by 3.5 percent this year and next year, compared with a forecast of 3.1 percent in 2018, as the Horn of Africa nation implements an economic program monitored by the lender.
“Somalia’s economy is recovering, but further efforts are needed to secure economic resilience and reduce poverty,” the Washington-based lender said Wednesday in an emailed statement. “Since 2017, growth has rebounded, inflation has slowed and the trade deficit has narrowed.”
Favorable rains and sustained remittance inflows aided the recovery in economic output, it said. Inflation is forecast to decelerate to 3 percent this year and 2.8 percent next year, from 3.5 percent in 2018, while the current-account deficit may narrow to 5.3 percent of GDP this year from 5.6 percent in 2018.
Data through November 2018 shows that domestic revenue reached $161 million, or 31 percent higher than the same period in 2017, and the overall cash fiscal position was in surplus by $8 million, according to the lender. Earlier this month, the IMF completed its first review of an ongoing economic program with Somalia, according to the statement.
Somalia has been convulsed by violence since 1991, initially during a civil war that followed the ousting of dictator Mohamed Siad Barre, and followed by an insurgency by Islamists affiliated to al-Qaeda.