Crisis-hit Congo set to revise 2009 budget: minister

By Joe Bavier

KINSHASA (Reuters) - The cash-strapped Democratic Republic of Congo will be forced to revise its 2009 budget unless it can rein in rampant inflation and reverse the slide of its currency, the budget minister said on Tuesday.

The vast central African nation's mining-driven economy has been crippled by the global economic downturn which has led to a fall in demand for mineral exports, its primary foreign currency earner.

In March, the International Monetary Fund slashed Congo's 2009 growth forecast to 2.7 percent from an October projection of over 10 percent.

Average annual inflation will likely hit 31 percent, more than double the central bank's expectations when the budget was passed last year, while the Congolese franc has hovered around 800 francs to the dollar for much of early 2009, well above its mid-2008 level of 560 francs to the dollar.

"None of the economic indicators are the same. So we'll probably, not probably, we must move towards a revision of the budget," Michel Lokola told Reuters in an interview on Tuesday.

This year's planned spending of around 2.9 trillion francs had been evaluated at an exchange rate of 585 francs to the dollar, creating a budget of around $5 billion -- a $1.5 billion increase from 2008.

However, the fall of the Congolese franc has largely erased that budget growth. Meanwhile income from mining and oil exports, which make up around 60 percent of state revenues, has plummeted.

Benchmark world prices for copper, Congo's primary mineral export, on the London Metal Exchange traded at around $4,520 per tonne on Tuesday, down from a record high of almost $9,000 per tonne last July.