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… Minister Konneh
Finance and Development Planning Minister has disclosed that Liberia's economy is in serious trouble as a result of the Ebola virus disease (EVD) outbreak.
Minister Amara Konneh said prior to the Ebola outbreak, the country's economy was projected to grow at 5.9 percent in 2014.
Speaking Thursday at the Ministry of Information regular press briefing in Monrovia, Minister Konneh said during the early stages of the Ebola crisis, the government worked with partners to measure the effect of the economic slowdown that was resulting from the EVD outbreak and a reversed projection was made at 2.5 percent growth rate.
However, he said as the Ebola crisis worsened, the country's growth rate has been further reversed and dramatically dropped to negative zero point four.
This, according to him, means that the impressive real gross domestic product (GDP) growth rate that was sustained by Liberia over the last few years has dipped into negative territory, signifying the shrinking of the economy.
Minister Konneh named the worst affected sectors as agriculture, fisheries, mining, which are projected to decline.
“With economic activities expected to further deteriorate in the remaining months of 2014, and likely even worsen in 2015, our growth rate for next year is still subject to reversion…” Minister Konneh predicted.
He attributed the massive decline in economic activities to external factors, particularly the decline in the prices of rubber and iron ore on the world market.
Minister Konneh indicated that the decrease in the prices of Liberia's primary commodities has resulted in a 31% and 81% decline in export earnings from rubber and iron ore respectively.
He further said the average inflation rate is being projected at 11.4% for 2014, up from 8.5% in 2013, while the end-of-period inflation rate for 2014 is projected at 14.7%, up from 8.5% in 2013.
Minister Konneh said the causes of the domestic decline are more taxing, as total government revenue and grants are projected at 27.4% of GDP for fiscal year 2014/2015, down from 29.9% of GDP for fiscal year 2013/14.
The Ministry of Finance and Development Planning Minister said the total expenditure plus net lending for fiscal year 2014/15 is projected at 28.6% of GDP, down from 31.4% for fiscal year 2013/14.
He said the overall fiscal balance including grants for fiscal year 2014/15 registered a projected deficit of 1.2% GDP compared to a deficit of 1.6% for fiscal year 2013/14.
Minister Konneh said owing to the widening fiscal deficit, the public external debt for fiscal year 2014/15 is projected at 14.3% of GDP, as compared to a deficit of 1.6% for fiscal year 2013/14; while central government domestic debt for fiscal year 2014/15 is projected at 15.0% of GDP as compared to 16.6% of GDP for fiscal year 2013/14.
“Grants for 2014 are projected at a deficit of 36.5 per cent of GDP, as compared to a deficit of 34.6 percent of GDP for 2013; while the current account balance for 2014 (excluding grants) is projected at a deficit of 84.4 percent GDP as compared to a deficit of 83.9 percent for 2013…this implies that grants are crucial to stabilizing our current account balance…” Minister Konneh said.