Tag Archives: Economic Outlook

Eritrea Economic Outlook 2020 Amid COVID-19

Recapitalizing and enhancing the capacity of the Eritrean Investment and Development Bank will be critical.

Eritrea’s economic performance and outlook amid the COVID-19 pandemic found to be weak after revisions of the growth projections and outlook for 2020 and 2021 were done.

BY EDIRISA NSEERA | THE AFRICAN DEVELOPMENT BANK

Eritrea reported its first case of COVID–19 on 21 March 2020, and total cumulative cases stood at 39 by 7 May, with 30 recoveries and no deaths. To contain the spread of the pandemic, the government imposed a national lock-down starting on 2 April. All citizens are required to stay at home except those engaged in indispensable security and development tasks. Continue reading Eritrea Economic Outlook 2020 Amid COVID-19

African Economic Outlook 2014: Eritrea’s Monetary and Debt Policy

Full liberalization of the foreign-currency regime, building broad partnerships and multiple pathways to tap different financial sources could unlock the foreign-currency shortages and exchange-rate overvaluation that will induce private investment, hence boost growth and create employment in the country.

By Magidu Nyende and Luka Okumu,

ERITREA’S monetary policy has mainly been geared to accommodating the public fiscal deficits.

Broad money supply increased sharply to 119% of GDP in 2011 and 2012. Due to exceptionally high deficits in the previous years, the authorities had to resort to central-bank financing. Credit supply to the private sector grew at much lower rates, between 1% and 4%, over 2009-11.  Continue reading African Economic Outlook 2014: Eritrea’s Monetary and Debt Policy

African Economic Outlook 2014: Eritrea’s Fiscal Policy

The Eritrean government has continued to prioritize infrastructure development in order to promote private-sector investments. Infrastructure projects in Massawa and Assab have been completed. The country is also expanding the road network, particularly in the mining sites and in the free-trade zone, as well as the housing sector in Asmara. (AfDB Eritrea Report)

By Magidu Nyende and Luka Okumu,

EVIDENCE-based assessment of fiscal policy in Eritrea is severely constrained by lack of transparency and availability of basic information on fiscal operations and management, including, of course, the budget.

Estimates by various sources, including the IMF, however, indicate a continued improvement in the overall fiscal deficit (after grants) from about 13.2% of GDP in 2011 to an estimated 10.3% in 2013, reflecting improved tax collection from the 2012 level, lower expenditure on safety nets and a contraction in public investment (see table below).  Continue reading African Economic Outlook 2014: Eritrea’s Fiscal Policy