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IMF admits Eritrea's economy was more robust than previously estimated


New buses being offloaded in the port city of Massawa


For many years, I've been claiming the International Monetary Fund (IMF) has been significantly downplaying Eritrea's GDP forecast estimates. I argued the main culprit behind this was/is Abebe Aemro Selassie, a former Ethiopian regime employee who is tasked with providing the IMF's Regional Economic Outlook for sub-Saharan Africa.

Under Selassie's reign, Eritrea's GDP forecast estimations have been one of the worst in Africa, while for his home country of Ethiopia, it has received one of the most favorable GDP forecasts in Africa. None of this made sense because Eritrea, with its small population was producing expensive commodities to the World such as gold, silver, copper and zinc, while Ethiopia with its large population was producing coffee and sesame seeds. Yet Eritrea was receiving annual GDP forecast rates of 1%, while Ethiopia, backed by its powerful sesame seed exports [sarcasm], was receiving a ridiculous 10% GDP annual forecast rates from the IMF.

Obviously there's more to GDP growth rates than just exports. But even when one looks at it from a broader perspective, there is still no justification for the IMF's extremely favorable GDP forecasts for Ethiopia and extremely unfavorable GDP forecasts for Eritrea. The only rational conclusion is Selassie is giving his former bosses in Addis Ababa favorable data, while downplaying Eritrea's data for political consumption.

So when the IMF recently released its 2016 World Economic Outlook, I was surprised to see it had revised Eritrea's low GDP growth rates for the last several years. In doing so, the IMF unintentionally admitted it was low-balling Eritrea's annual GDP growth rates for that time period.

Even these new revised figures, which are presented below, are still lower than the real GDP growth rates of Eritrea. So don't be surprised if the IMF yet again revises its GDP forecasts for Eritrea to reflect its real economy.



IMF revised its Eritrea GDP growth rate

YearsPreviousRevised%Difference_________
2011
8.7
8.7
2012
7.0
7.0
0
2013
1.3
3.1
138%
2014
1.7
5.0
194%
2015
0.2
4.8
2300%
2016
2.2
3.7
68%

Sources: IMF's 2015 and 2016 World Economic Outlook | Allpolitiko 

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IMF admits Eritrea's economy was more robust than previously estimated Reviewed by Admin on 11:58 AM Rating: 5

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