2023-07-20 02:05:25
Economic projections in WAEMU remain generally favorable, despite the persistence of certain downside risk factors. The GDP of the area, in real terms, would increase by 6.3% in 2023 and 6.9% in 2024, projects the Bceao.
Aké MIDA / Illustration: Projection of GDP growth rates
According to the latest forecasts, the growth of gross domestic product (GDP) in the Uemoa zone, in real terms, would stand at 6.3% in 2023 and 6.9% in 2024, after 5.9%, according to the latest Report on monetary policy in Uemoa (Bceao, June 2023). These prospects thus appear favorable within the West African Economic and Monetary Union (UEMOA).
The projections are linked to the strengthening of economic activity in all the driving sectors, namely the tertiary and secondary sectors, whose contributions would stand out at 3.3 percentage points (pdp) and 1.9 pdp respectively. In the secondary sector, an increase in extractive and manufacturing production is expected. In fact, it is projected at the end of 2023 the start of oil and gas production in Senegal, as well as the resumption of gold extraction in mines where activity had been suspended due to security problems.
The economic dynamism in the tertiary sector would be supported by the development of commercial activities and services.
For the primary sector, the central scenario assumes a 5.0% increase in production for the 2023-2024 and 2024-2025 cereal campaigns. The improvement in the yields of the main speculations and food crops should help to support production in the primary sector by 1.1 pdp.
However, relativizes the Central Bank, these projections remain surrounded by significant downside risks linked in particular to the security and socio-political situation in the sub-region, to the evolution of the prices of raw materials, in particular hydrocarbons and fertilizers, as well as to weather conditions, indicated the Monetary Policy Committee (Cpm) of the Bceao. The growth assumptions also take into account the economic programs of the Member States of the Union, as well as the evolution of the security situation.
International situation
The economic outlook is dependent on the development of the international situation, the socio-political and security situation as well as climatic effects. They are based on forecasts of key macroeconomic variables, namely growth, inflation and interest rates at the global level. The international prices of food products and a barrel of oil as well as the euro/US dollar exchange rate which are not to be outdone. Among other things, the International Monetary Fund (IMF) indicated in April 2023 that the growth rate of world production would drop from 3.4% in 2022 to 2.8% in 2023 and then to 3.0% in 2024.
Apart from cocoa, uranium, phosphates and gold, the international prices of raw materials exported by the countries of the Union should generally fall over the period 2023-2024, after the peaks reached in 2022. The average price of crude oil should drop from 93.0 dollars in 2022 to 83.0 dollars in 2023 before falling to 78.1 dollars in 2024 then to 73.0 dollars in 2025.
With regard to the general level of prices, global inflation should stand at 7.0% in 2023 and then at 4.9% in 2024, after peaking at 8.7% in 2022, in line with the expected decline in energy and food prices, the effects of monetary tightening on demand as well as the drop in freight costs at the global level. At the regional level, the BCEAO projects the inflation rate in the Union, on an annual average, to 4.4% in 2023 and 3.2% in 2024, after 7.4% in 2022.
In addition, a gradual decrease in budget deficits is expected from 2023, after the increase recorded in 2022. The Union’s budget deficit should decrease to 5.2% of GDP in 2023 and 3.7% in 2024, after 6.6% in 2022.
Projected GDP growth rates, in real terms (in percent)
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juillet 20, 2023
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