Although decelerating from 6.9 percentthe previous year, economic growth in 2018 is estimated toremain robust at 6.5 percent. The slowdown in growth in 2018has been partly due to a combination of the followingdomestic factors : (i) the severe floods that hit thecountry during July – September 2018, which adverselyaffected agricultural production and damaged infrastructurein several provinces; (ii) the weak performance of themining sector despite higher commodity prices; and (iii)continued fiscal consolidation, which contributed to slowercredit growth. These downside factors offset the gains fromthe industry sector driven by the expansion of constructionactivities and electricity exports, coupled with robustgrowth in wholesale and retail trade. There is evidence ofincreasing job creation between 2010 and 2017. According tothe 2017 Labor Force Survey, wage jobs are estimated to havegradually increased since 2010. This has resulted in 28percent of households situated mostly in urban areasreporting an increase in income. As a result, ownership ofconsumption goods among the more affluent householdsincreased faster than in poorer, mainly rural, households.Therefore, while poverty is still expected to declinemodestly, inequality is likely to have increased. Thegovernment intends to remain on the path of fiscalconsolidation, with the deficit estimated to decrease to 4.7percent of GDP in 2018 from 5.3 percent in 2017, owing tosome improvement in revenue collection and expenditurerestraint. Improved revenue performance has been primarilydriven by higher excise revenues due to increasing oilimports coupled with a higher price of oil. Other driversinclude an increase in income taxes, dividend earnings, andother non-tax revenues. Strengthened revenue administration,such as the use of electronic tax payment platforms, hasalso supported revenue mobilization for certain tax types.Public outlays have been rationalized through tightercontrol of the public wage bill and downward adjustment ofnon-wage current spending. These measures offset higherinterest payments and the increase in capital spendingfinanced by external loans. Fiscal consolidation isestimated to have slowed the accumulation of public debt in2018, though not enough to reverse the rising debt-GDPratio, which is estimated to increase from 60.1 to 60.6percent of GDP between 2017 and 2018.
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