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Congolese Economy to Grow 6.1% in 2010 on Mining, Price Inflation Slows
Sep 17,2010 10:19CST
industry news
Source:SMM

NEW YORK, Sep. 17 -- High mineral prices will help Democratic Republic of Congo post better-than-expected growth and inflation rates this year, the government said after meeting with International Monetary Fund officials.

The country’s economy will expand by about 6.1 percent of gross domestic product in 2010, better than the 5.4 percent anticipated at the beginning of the year, Prime Minister Alphonse Muzito said. Inflation is currently at 7.5 percent, half the rate projected by the central bank for the year, he said in a speech to international donors in Kinshasa today, which was e-mailed to reporters.

"Economic growth was better than expected, essentially because of the impact of an increase in the international demand for mineral exports,” Muzito said.

Congo is Africa’s biggest tin producer, holds a third of the world’s cobalt reserves and 4 percent of all copper, according to the U.S. Geological Survey. It also has significant deposits of diamonds and gold. Tin prices have jumped 39 percent in London this year and earlier today reached $23,500 a ton, the highest since July 23, 2008.

Copper futures have risen 4.4 percent this year while gold hit an all-time high in New York trading today before settling at $1,273.80 at 3:02 p.m.

Mining exports from Congo last year were estimated at $3.1 billion, making up four-fifths of total exports, according to International Monetary Fund statistics.

The country’s macroeconomic outlook “has significantly improved” in the short term, the IMF said in an e-mailed statement after the meeting with the Muzito.

Congo is on course to meet its budget goals and central bank financing has been reduced, the Washington D.C.-based lender said.

A slowdown in the global economic recovery could hurt Congo’s growth, the fund said. It also warned of increased spending for security or next year’s presidential elections, as well as continuing problems with Congo’s business climate. The World Bank ranked Congo second to last in its 2010 Doing Business guide.
 

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