The African Economic Outlook report
Sierra Leone is on the path to recovery following the effects of an 18-month Ebola outbreak and the sustained decline of iron ore prices. The Ebola outbreak affected the socio-economic livelihoods of the country, disrupting normal health care and education services, agricultural production and trade. The iron ore price decline affected macro-financial stability and reversed the country’s remarkable positive growth trajectory as economic growth declined from a buoyant 20.1% in 2013 to 4.6% in 2014 and thereafter contracted by 21.5% in 2015 according to the latest estimates. GDP in 2016 is expected to remain relatively unchanged and to rise moderately in 2017. Inflation, which was moderate in the first quarter of 2015, is now estimated at 9.9% for 2015 and is expected to hover around 10% in 2016 and 2017. The Bank of Sierra Leone (BSL) needs to be vigilant as regards second-round inflationary pressures resulting from the depreciation of the Leone and the bottoming out of crude oil prices. Fiscal space in Sierra Leone is very limited due to the historically low revenue to GDP ratio and higher government expenditure.