Private sector main driver of growth

IMF says economy relatively diversified

Private sector consumption and investment were the main drivers of economic growth over the period 1997-2010, according to a report issued by the International Monetary Fund (IMF). GDP growth averaged about four percent throughout that period. This growth was characterized by high volatility however, with downturns primarily caused by security incidents, followed by catch-up expansion.

The services sector was the main growth contributor, with a share of 60 percent, followed by construction and government spending, with shares of some 20 percent each. Within the services sector, the largest contributions came from trade, transport and communication, and financial services.

The IMF report said that although the economy is largely service-based, it remains relatively diversified. over the reported period, the economy had gradually become less diversified than it was in the late 1990s.

Between 1997 and 2010, trade and construction saw a large increase in their shares in GDP. The share of trade grew from 21 to 27 percent, and that of construction grew from 8.8 to 15 percent. By contrast, the share of industry in the GDP fell from 12.5 to seven percent, and agriculture's share dropped from 6.7 to 4.7 percent.

In 2010, GDP continued growing at a fast pace of seven percent for its fourth consecutive year. Growth was concentrated in construction, as a result of the boom in real estate, and in the banking sector. Construction accounted for 2.5 percent out of the total seven percent growth, and financial services accounted for another 1.2 percent. Total disposable income reached close to 135 percent of the GDP in 2010, mainly due to sizable private transfers received from expatriates.