Slow growth of 3.7 percent projected for 2019

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BY LORETTA BRIGIDIA MANELE

THE country’s economy is projected to experience a slow growth of 3.7 percent in 2019 says CBSI’s 2018 Annual Report.

This slow growth is said to reflect the key assumption that forestry will finally decelerate as part of the government’s forestry sustainability initiatives.

All the more, growth during this year is said to be driven by the services sector, especially wholesale retail and transport that is related to the major pipeline projects.

Other activities such as major construction, manufacturing and that of new mineral production in the secondary sector and fisheries in the primary sector will also contribute to this growth.

CBSI also highlighted that the government needs to address structural issues to mitigate the economy’s long term risks and vulnerabilities.

In this regard, on the monetary front, CBSI stressed that slower credit could hinder growth and would need remedial policy actions such as proper and efficient registration of collateral and corresponding support by government to targeted credit sectors.

Non-price impediments such as within the fuel distribution sector is also in the view to be managed to minimise it systematic impact on inflation.

As for the forestry sector, CBSI said the realisation of a drawdown of the sector can mean growth for other productive sectors.

Meanwhile, this scenario as expressed also presents a challenge where the fall in forestry revenue necessitates more fiscal discipline to ensure that government’s budget remains affordable and sustainable.

CBSI expects that the government undertake an expansionary fiscal stance, as it cements itself to carry out is new projects.

“Due to the rebuilding of the fiscal buffers during 2018 and timing constraints to fully implement its activities, a fiscal surplus balance is anticipated for 2019,” said CBSI.

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