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Govt reports 8.1% economic growth, amid L$'s fall

By Edward Kennedy/19/09/2013
Some small scale economic activities
Some small scale economic activities

(mylbsonline.com/Liberia)-The Ministry of Finance has reported 8.1% economic growth, reflecting the peace dividend following the Liberian civil war.

Finance Minister, Amara Konneh, said: “Despite the rapid growth, the agenda for transformation recognizes that the main drawback of this growth is the limited number of jobs created.”

Minister Konneh spoke at the Information Ministry’s regular news briefing Tuesday, September 17, 2013.

He said: “Liberia’s revised projection with the International Monetary Fund (IMF) for 2013 implies a real GDP growth of 8.1% as compare to 7.5% in 2012.”

Minister Konneh attributed the growth to stronger mining activities, noting: “The extension of the economy has been driven by the extractive sector.”

“Non-real resource GDP growth, construction in particular, has accelerated in the first half of  2013, reflecting a pickup in public investment as compared to 2012,” the Finance Minister noted.

The Minister said: “The public investment increased the first medium term expenditure project was rolled out in 2012.”

He added: “The outlook remains venerable to commodities price fluctuations, particularly for iron ore and rubber.”

“Foreign direct investment and oversees development assistance from development partners, and dispute in the concession constitute substantial risk to the growth, Minister Konneh further noted.

At the same time, the Finance Ministry has acknowledged the depreciation of the Liberian Dollar (L$) against the US dollar since December, 2012.

Finance Minister, Amara Konneh, said: “The move is causing serious economic hardship for ordinary Liberians who solely depend on the Liberian Dollar for transactions.”

He added: “The depreciation is driven by structural imbalance of the supply- -and-demand of the US Dollar on the market, due to high and growing trade deficit.”

“Almost everything Liberians consume is imported while exports received are stagnated.”

The injection of more Liberian Dollars in the economy for the past six months is another reason for the high exchange rate on the Liberian market,” Finance Minister Konneh noted.

“In the last few months, we have witnessed the persistent depreciation of the Liberian Dollar against the US dollar.”

“Since December 2012, the exchange rate has grown roughly from 78-80 Liberian Dollar to 1 US dollar”, Mr. Konneh said.

He also attributed the high exchange rate on the Liberian market to the injection of more Liberian Dollars in the economy for the past six months.

The Finance Minister, however, noted: “The Central Bank of Liberia (CBL) has a number of monitoring instruments it is currently using to intervene in stabilizing the exchange rate.”

Minister Konneh further said: “We will embark on a fiscal policy measure to help reduce the demand pressure of the US Dollars on the Liberian market.”

As part of the measures, the Ministry of Finance, beginning October, will embark on a vigorous public relations campaign to encourage tax payers pay their taxes in Liberian Dollars”, he added.

 


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