Burundi sees 2012 GDP Growth at 4.8 pct

BUJUMBURA - Burundi's economic growth will accelerate to 4.8 percent in 2012 and 6 percent by 2014 as the central African country diversifies its agricultural production and boosts investment in tourism and power production, its government said.

Inflation is expected to decline in 2012 while risks to the economy stem from high global oil costs that could fuel imported inflation and bouts of insecurity, the government wrote in a letter to the International Monetary Fund (IMF).

"During 2012, reflecting an improved business climate that will be accompanied by increased private investment, economic growth should accelerate to 4.8 percent, with a slightly declining, albeit relatively high, inflation rate," it said in the letter dated December 19 but made public late on Wednesday.

"Exports of coffee and other agricultural products should increase strongly and offset the expected increase in imports, in particular petroleum products."

The government estimates Burundi's economy grew 4.2 percent in 2011. Year-on-year inflation eased to 14.9 percent in December but the price of essential commodities threaten to add pressure to the rate.

Burundi is enjoying relative peace since emerging from a decade-long civil war, but attacks on civilians and security forces have risen, raising fears of a fresh rebellion.

Its economy is heavily dependent on agriculture revenues, in particular from tea and coffee.

"The government plans to limit the effects of the global crisis on the Burundian economy by adopting a more flexible exchange rate policy combined with prudent fiscal and monetary policies," the letter said.

Source: Reuters