Cameroon’s real GDP growth is set to climb above the 4.0 percent long-run trend for the next few years on the back of investment in several new mega-projects and increased oil production, according to a business forecast report published Monday by the UK-based Business Monitor International (BMI).
But the West African country’s budget deficit amid GDP growth underscores the difficulty it will face balancing its budget when the boom fades in 2015, BMI noted.
“This report reveals how we see the next five years playing out in the country amidst the evolving economic and political landscape in the region,” said Terence Alexander, BMI’s Head of Research, in a note to PANA here.
On likely key dangers to the outlook, the report has cautioned that “risks of a Nigerian-style violent extremist group emerging in the North are rising, though still remote”.
In addition, BMI pointed out that the risks to long-term political stability from the sudden incapacitation of the country’s ailing President Paul Biya have been slightly mitigated by the creation of the national Senate.
Regarding its major forecast changes in Cameroon, BMI said: “We have revised down the growth in exports and imports for 2012, which has led to a narrowing of our forecast current account deficit for the next several years.
“We have slightly revised down Cameroon’s short-term political risk rating, with negative security developments more than offsetting positive political ones.”
Meanwhile, the report said the regional central bank was likely to keep rates on hold at 4% for the foreseeable future.