Friday , January 15 2021

BEAC expects "less than expected economic acceleration" in the CEMAC zone

The updated projections are based on a growth rate of 1.7%, compared to 0.2% in 2017, an increase in the general price level of around 1.7% on average, compared to 0.9% in 2017, an increase in balance sheet base commitment surplus fiscal, including donations, up to 0.5% of gross domestic product (GDP), against -3.1% of GDP in 2017.

At the same time, the Central Bank's estimates, the current account deficit of the Central African Economic and Monetary Community (CEMAC) will shrink to -3.7% of GDP, to -4.2% of GDP in 2017 and an increase in the money supply 6, 3%, for the rate of external currency hedging that will be maintained at 59.7%.

This data is in stark contrast to the revised estimate for the 2018 monetary and financial economic situation of CEMAC member countries, which was presented on July 25 by the Monetary Policy Committee (MPC), which focuses on accelerating activity, with a growth rate of 2.5% against initial estimates of + 1 , 9%.

At that time, the Issuing Institute also plunged into an increase in the general price level to 1.6% on an annual average, compared to 0.9% in 2017, a surplus from budget-based commitments, including grants, to 0.5% of GDP , compared to -3.3% of GDP in 2017, while the current account deficit is estimated to be -4.3% of GDP, compared to -4.0% of GDP in 2017 and an increase in the money supply of 7.1%, with the external hedging rate of the currency 60.7%.

According to BEAC, the assumptions underlying the expected changes in the macroeconomic framework for 2018 relate externally to the greater recovery in world crude oil prices, the depreciation of the US dollar from 5.9% to 546.9 FCFA / dollar, lower than previously imagined (-8.9% to 529.1 CFA francs / dollar).

The same projection shows a strong increase in terms of trade and, domestically, an increase in oil production, a decline in gas production and a continuation of macroeconomic and structural reforms by CEMAC countries.

The issuer warned, however, the risks of non-signing of the Congo financial program with the International Monetary Fund (IMF), which could have a negative effect on monetary stability due to weak mobilization of external resources that would result from such events.

"The acceleration of global economic growth will contribute to an increase in global trade volume of around 4.2% in 2018 and 4.0% in 2019, compared to 5.2% in 2017 and will benefit the CEMAC economy in the medium term, despite a downturn in trade, especially related to the evolution of unfavorable oil prices between 2019 and 2020. "

Sub-regional economic and financial prospects, set by BEAC, provide a real growth rate of activity, which must reach 3.4% in 2019, before falling to 3.0% and 3.1% in 2020 and 2021, respectively. respectively, compared to 1.7% in 2018, mainly due to the performance of the non-oil and gas sector, developments that will result from the development of the agricultural sector, services, construction and public works (BTP) and manufacturing industries.

To support activities in the non-oil sector, the Central Bank is committed to restoring security in the Central African Republic and the Chad and Cameroon borders with Nigeria, as well as in northern and southwestern Cameroon. but also on the implementation of the Economic and Financial Reform Program (PREF-CEMAC) and a positive spin-off from implementing fiscal consolidation measures contained in a program signed by the United States with the IMF.

In the medium term, the inflation forecast by Bank services is increasing, while remaining below the Community norm of 3%, thanks to increased taxation, strength of domestic demand, sustained by increased budget revenues and rising fuel prices in Gabon and their continued growth in the subregion, because of their indexation of world crude oil prices.

During the 2019-2021 period, CEMAC's public finances will remain surplus, while external accounts will experience recovery difficulties for years and the currency's external coverage rate will drop from 63.5% in 2019, to 65.2% in 2020 and 67 , 7% in 2021, after 59.7% in 2018, due to an increase in net foreign assets in annual variations of 13.4% in 2019, 7, 0% in 2020, and 14.3% in the year 2021 after 19.9% ​​in 2018.

However, some risks remain in this forecast, related to slippage in the implementation of the program with the IMF, sudden and unexpected decline in the price of one barrel of crude oil, tightening Federal Reserve monetary policy faster than expected. USA.

Given the economic and financial situation, which has only slightly improved, and in line with the strategic orientation of monetary policy for 2018, BEAC plans to continue to tighten its monetary policy to increase reserve ownership at an adequate level, ie at a minimum level of 3 months import coverage of goods and services and serving external public debt.

Given the favorable macroeconomic outlook of the subregion, and in supporting external sustainability, the CPM announced October 31, its decision to raise the tender interest rate (TIAO) by 2, 95% to 3.50%, from a marginal loan facility of 4, 70% to 5.25%, to maintain the unchanged marginal deposit facility level, to raise the penalty rate to the bank for 7.00% to 7.55% and maintain an unchanged reserve requirement ratio.


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