ECONOMIC GROWTH SHOULD CONTRACT significantly in 2008, to 4.8 per cent, as against 5.7 per cent in 2007. This rate is below the level recorded during the previous three years (5.9 per cent), primarily due to falling mining production, particularly uranium extraction.
As in 2008, economic growth in Niger in 2009 and 2010 is expected to be driven by agriculture. The uranium sector should become increasingly important as French and Chinese companies have committed to developing new mines. The impact on growth of these new projects should however be attenuated by the decline in global demand for raw materials. Indeed, the financial crisis that broke out during the second half of 2008 has begun to make the international prices of these products decline, including for uranium. As a result, growth is projected to slow down to 1.8 per cent in 2009 and then rise again to 5.7 per cent in 2010.
Inflation in Niamey, as measured by the Harmonised Index of Consumer Prices (HICP), was estimated at 10.9 per cent in 2008. The global food crisis, combined with poor availability of local products, explains largely why prices skyrocketed during the first semester of 2008. In the second semester, slower price increases for food and oil products on the world markets somewhat curbed the rise of prices in Niger. The annual inflation of food products remained too high, however, reaching a rate of 20.5 per cent. This should change in 2009, thanks to the good harvest of 2008 and a lesser inflationary pressure on world food and energy prices. Inflation should thus slow down to 4.1 per cent in 2009 and 4.3 per cent in 2010, even if the expected fall in oil and food prices will be dampened in part by a rise in imported inflation, due to the weakness of the euro to which the CFA franc is pegged.