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Burundi economy to grow by 4.2%, IMF

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BUJUMBURA, BURUNDI - The Burundi economy is expected to grow by about 4.2 percent in 2011, lower than earlier projected, following a modest recovery of 3.9 percent in 2010, in the aftermath of the global financial crisis.
This was said by the International Monetary Fund (IMF),  after a mission in Burundi, led by Mr. Oral Williams from May 23-June 2, 2011 to conduct the sixth review of the government's economic and financial program supported by the IMF under the Extended Credit Facility (ECF).
The mission met with the Second Vice-President, Gervais Rufyikiri; the Minister of Finance, Clotilde Nizigama; the President of the Senate, Gabriel Ntisezerana; the Minister in Charge of Good Governance and Privatization, Jean Baptiste Gahimbare; and the Governor of the Central Bank, Gaspard Sindayigaya. The mission also had discussions with members of the donor community, the private sector, and the civil society.
According to a statement available on the IMF website, Mr. Williams, IMF Mission Chief for Burundi, issued said [the] "Performance under the ECF-supported program has been broadly satisfactory, despite the impact of the food and fuel price shocks facing the country.
All quantitative performance criteria for March 2011 were observed, and structural reforms are on track. Notably, progress has been made toward the implementation of the regulations on public budget management and the adoption of a financial sector reform strategy."
He however added that reflecting rising food and fuel prices, headline inflation (end of period) was likely to increase during the year and then return to normal levels. He said that the main downside risk in the macroeconomic outlook stems from the uncertain external environment.
The IMF encouraged Burundian authorities to intensify efforts to seek additional budget support from the donor community and stressed the need to pursue an appropriate monetary policy, in the context of a flexible exchange rate system, in order to contain inflationary expectations.
Mr. Williams also encouraged the authorities to accelerate integration within the East African Community (EAC), pursue structural reforms by refocusing capital spending on key infrastructure, and advancing financial sector reforms to improve the business and regulatory environments over the medium term.
Early this year, Burundi Revenue Authority (OBR) posted a record revenue collection of USD 100.6 million for the first quarter of 2011, up from USD 77.7 million in the same period last year. This, and efforts to consolidate progress on revenue collections and reallocate spending to priority sectors was noted as an encouraging development by the IMF.
Burundi has already gone a long way, through its investment Authority (API) and other World Bank projects notably the Economic Management Support Project (PAGE) in the implementation of reforms to improve the business climate.
Such reforms include Investment incentives, tax reforms, private sector reforms, review of the judiciary system and privatisation.
The IMF confirmed, in a statement on it's website, that it will continue to work with Burundi to address the challenges of improvement of the business environment which is key to attracting foreign investment.
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The East African Community is meeting in Burundi. What are your expectations?