Monday , April 19 2021

BEAC expects "lower-than-expected acceleration" of the economy in the CEMAC zone

The updated projections are based on a growth rate of 1.7%, up from 0.2% in 2017, an increase in the general price level of around 1.7% on average, compared to 0.9% in 2017, increase in the surplus of the basic commitments of the fiscal balance, including donations, to 0.5% of the Gross Domestic Product (GDP), compared to -3.1% of GDP in 2017.

At the same time, the Central Bank forecasts that the current account deficit of the Central African Economic and Monetary Community (CEMAC) would fall to -3.7% of GDP, against -4.2% of GDP in 2017. As well as an increase in the money supply of 6.3%, to an external currency hedging rate that would be maintained at 59.7%.

These data contrast sharply with the revised forecasts for 2018 of the monetary and financial economic situation of CEMAC member countries, presented on July 25 by the Monetary Policy Committee (MPC), which focused on accelerating activity, with a growth rate of 2.5% against an initial forecast of + 1.9%.

At the time, the Issuing Institute was also plunging in a general price level increase to 1.6% in the annual average, compared to 0.9% in 2017, a surplus of the basic commitments of the budget balance sheet, including 0.5% of the Compared to -3.3% of GDP in 2017, while the current account deficit was expected 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 an external currency hedging rate of 60.7%.

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

The same projections show a strong improvement in the terms of trade and, domestically, the increase in oil production, the decline in gas production, and the continuation of macroeconomic and structural reforms by CEMAC states.

The issuing institution warns, however, of the risk of non-signing of a Congo financial program with the International Monetary Fund (IMF), which could have a negative effect on monetary stability because of the weak mobilization of external resources that would result from such an event.

"The acceleration of global economic growth would contribute to an increase in global trade volume of about 4.2% in 2018 and 4.0% in 2019, compared with 5.2% in 2017 and would benefit CEMAC economies. despite a foreseeable deterioration in the terms of trade, mainly related to the unfavorable evolution of oil prices between 2019 and 2020. "

The sub-regional economic and financial panorama, established by BEAC, forecasts a real growth rate of activity, which is expected to reach 3.4% in 2019 before falling to 3.0% and 3.1% in 2020 and 2021, respectively, compared to 1.7% in 2018, mainly due to the performance of the non-oil sector, a development that would result from the development of the agricultural sector, services, construction and public works (BTP) and manufacturing industries.

In support of activity in the non-oil sector, the Central Bank is committed to restoring security in the Central African Republic and the borders of Chad and Cameroon with Nigeria, as well as in the north and south-west regions of Cameroon. but also on the implementation of the Economic and Financial Reform Program (PREF-CEMAC) and the positive repercussions of the implementation of the fiscal consolidation measures contained in the programs signed by the States with the IMF.

In the medium term, inflation forecasts for the Bank's services are on the rise, remaining below the Community norm of 3%, thanks to increased taxation, driven by domestic demand, supported by higher budget revenues and higher prices of fuels in Gabon and its continued growth in the subregion due to its indexation to world crude oil prices.

During the period 2019-2021, CEMAC's public finances would remain in surplus, while external accounts would have difficulty recovering over the years and the external currency coverage rate would fall from 63.5% in 2019 to 65, 2% in 2020 and 67.7% in 2021, after 59.7% in 2018, in relation to the continuous increase in net external assets in annual variation of 13.4% in 2019, 7,0% in 2020 and 14,3% % in 2021, after 19.9% ​​in 2018.

However, some risks remain on these predictions, regarding a slippage in IMF program execution, a sudden and unexpected drop in the price of a crude, a faster than expected tightening of the Federal Reserve's monetary policy. USA.

Given the economic and financial situation, which is only slightly improving, and in line with the strategic orientation of its monetary policy for 2018, BEAC plans to continue tightening its monetary policy to increase its Reserves at an appropriate level, ie , to a minimum level corresponding to 3 months of coverage of imports of goods and services and the service of external public debt.

Given the favorable macroeconomic prospects of the subregion, and in support of its external sustainability, CPM announced on October 31 its decision to increase the bid rate (TIAO) by 2.95% to 3.50 %, from the marginal lending facility from 4.70% to 5.25%, to maintain the marginal deposit facility rate unchanged, to raise the rate from 7.00% to 7.55% and to maintain the coefficients of reservation unchanged.

FCEB / you / APA

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