December 11, 2017 / 7:32 PM / a year ago

Djibouti's sees GDP growth at 7 pct in 2018

DJIBOUTI, Dec 11 (Reuters) - Djibouti’s economy is expected to expand by 7 percent in 2018 up from an estimated 6.5 percent this year and government spending should also rise slightly in a budget focused on healthcare, a senior official said.

Located at the southern entrance to the Red Sea on the route to the Suez Canal, Djibouti has been seeking to expand its role as a transhipment hub and export route for its landlocked neighbour Ethiopia.

It is also has U.S. and French, Chinese and Japanese bases.

“The outlook for growth expected in 2018 is 7 percent, driven by direct investment and the transport, telecommunications, retail services and buildings sectors,” said Moumin Ahmed Cheikh, Justice minister and government spokesman.

He was speaking after the Council of Ministers approved the budget for fiscal year 2018, which is up 5 percent to 126 billion francs ($712.55 million) compared with the 2017 budget.

“The 2018 budget execution focuses on sustainable poverty reduction and social development, consolidation of the health system, improvement of the education system to best adapt it to the labour market and housing,” he said.

The budget also includes measures aimed at streamlining the tax systems and revision of import licences, Cheikh added.

Djibouti is expanding its port facilities to handle more bulk commodities, containers and other goods. It is also building two new airports to handle more tourists and cargo.

This year it opened three out of four ports aimed at boosting its position as a trading hub.

“The 2018 budget aims at continuing the infrastructure investment program, such as the exploitation of natural fishery resources, mineral resources, tourism and the development of renewable energy,” Cheikh said. ($1 = 176.8300 Djibouti francs) (Reporting by Abdourahim Arteh; Writing by George Obulutsa; Editing by Matthew Mpoke Bigg)

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