The president, Isaias Afewerki, and his People's Front for Democracy and Justice, will continue to exert control over the political scene. Opposition activity outside the country, while still largely ineffectual, is likely to pick up.The large-scale diversion of resources and manpower to the military is forecast to continue. The liberalisation of foreign-currency transactions could be followed by an easing of extensive state controls on the economy.
Despite growth in mining exports, we forecast that the current-account deficit will average 4.8% of GDP in 2015-16, as imports continue to dwarf exports and remittances are tempered by the UN sanctions.

Summary 7

Basic data 8

Political structure 9

Economic structure 10

Annual indicators 10

Quarterly indicators 10

Comparative economic indicators 11

Outlook for 2015-16 12

Political outlook 12

Economic policy outlook 14

Economic forecast 15

Recent analysis 18

Politics 18

Economy 21

International assumptions summary 15

Forecast summary 17

Gross domestic product 17

Consumer price inflation 17

Summary 28

Basic data 29

Political structure 30

Economic structure 31

Annual indicators 31

Outlook for 2015-16 32

Political outlook 32

Economic forecast 34

Recent analysis 37

Politics 37

Economy 42

Summary 45

Basic data 46

Political structure 47

Economic structure 48

Annual indicators 48

Quarterly indicators 49

Outlook for 2015-16 50

Political outlook 50

Economic policy outlook 52

Economic forecast 53

Recent analysis 56

Politics 56

Economy 59

Forecast summary 54

Foreign reserves 49

Foreign trade 49

Gross domestic product 55

Consumer price inflation 55

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