Growth is projected to reach 6.7 percent in 2018, up from an estimated 5.7 percent in 2017; stimulated by re©\export capacity from newly operating railway and improved port facilities, combined with construction of the new export©\processing free©\zone. On the demand side, the growth is expected to be supported by improved net exports accompanied with investment growth. Logistics services related to port activities and increase in industrial activities are expected to drive growth on the supply side. Inflation is expected to average around 2 percent this year from 0.6 percent in 2017, as demand picks up.
The near©\term outlook suggests a continuous strengthening of growth, above 7 percent in 2019©\2020, with re©\export capacity and pick©\up in Ethiopian trade transit, as the effect of the Ethiopian Birr devaluation on its imports eases. In addition, with recent leadership change in Ethiopia, the Ethiopian economy is expected to become more open, which would stimulate trade transit in Djiboutian ports, even given the potential emergence of other Horn of Africa ports including Berbera and Assab.