Friday , April 23 2021

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

The updated forecasts are based on 1.7% growth, compared with + 0.2% 2017, an increase of the general price level of approximately 1.7% on average, compared to 0.9% in 2017, an increase in surplus of tax base, including donations, to 0.5% of gross domestic product (GDP), against -3.1% of GDP in 2017.

At the same time, central bank forecasts estimate that the current account deficit in Central Africa (CEMAC) would decrease to -3.7% of GDP, against -4.2% of GDP in 2017 and an increase of 6.3% of the currency, for an external hedge of the currency would be maintained at 59.7%.

These data strongly contrast with the revised 2018 forecasts of CEMAC's monetary and economic economic situation, presented on 25 July by the Monetary Policy Committee (MPC), aimed at speeding up the business at a rate of 2.5% growth against a first forecast of + 1.9%.

At that time, the issuer also increased the general price level to 1.6% on an annual average, compared to 0.9% in 2017, a surplus of budget commitments, including contributions, to 0.5% of GDP, compared to – 3.3% of GDP in 2017, while the current account deficit was expected to be -4.3% of GDP, compared with -4.0% of GDP in 2017 and an increase of 7.1% of the money, with an external hedging rate of 60, 7%.

According to BEAC, the assumptions behind the expected changes in the macroeconomic framework for 2018 relate externally to a major recovery in world crude oil prices, a depreciation of the dollar from 5.9% to 546.9 FCFA / dollar, lower than previously planned (-8, 9% to 529.1 CFA franc / dollar).

The same forecasts show a strong improvement in trade conditions and, at home, the rise in oil production, the decline in gas production and the continuation of macroeconomic and structural reforms of the CEMAC states.

However, the issuing institution warns the risk that a Congo-financial program will not be signed with the IMF, which may adversely affect monetary stability due to the weak mobilization of external resources that would derive from such an event.

"An acceleration of global economic growth would contribute to the growth of global trade volumes of around 4.2% 2018 and 4.0% in 2019, compared to 5.2% in 2017 and would benefit from CEMAC economies. In the medium term, despite a foreseeable deterioration of trading conditions, mainly related to the downward trend in oil prices between 2019 and 2020. "

The regional and economic outlook for subregional regions determined by BEAC provides real activity development, which should reach 3.4% in 2019 before falling to 3.0% and 3.1% in 2020 and 2021, compared to 1.7% year 2018, mainly due to developments in the non-oil sector, a development that would arise through the development of the agricultural sector, services, construction and construction (BTP) and manufacturing industries.

In support of the activities 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 southwestern region of Cameroon. but also on the implementation of the Economic and Financial Reform Program (PREF-CEMAC) and the positive distortions from the implementation of fiscal consolidation measures included in the programs signed by the States with the IMF.

In the medium term, inflation forecasts are increasing from the banks' services while remaining below the 3% Community standard due to the increase in taxation, domestic demand, sustained by the increase in budget revenues and the rise in fuel prices in Gabon and their continued growth in the subregional region due to their indexing to the world crude oil price.

During the period 2019-2021, CEMAC's public finances will remain in surplus, while external accounts would be difficult to recover over the years and the external coverage of the currency would fall from 63.5% 2019 to 65.2% in 2020 and 67.7 % 2021, after 59.7% 2018, in relation to the continued increase in net foreign assets in annual variations of 13.4% 2019, 7, 0% 2020 and 14.3% 2021 after 19.9% ​​2018.

However, some risks remain on these forecasts, which relates to a slowdown in the implementation of programs with the IMF, a sudden and unforeseen drop in the price of a barrel of crude oil, a faster than expected tightening of the Federal Reserve monetary policy. USA.

In view of the economic and financial situation, which is only slightly improved, and in line with the strategic direction of monetary policy 2018, BEAC plans to continue tightening its monetary policy to raise its reserve holdings at an appropriate level, that is, at a minimum level corresponding to 3 months coverage of imports of goods and services and external debt service.

In view of the favorable macroeconomic outlook for the subregion and in support of its external sustainability, on 31 October, the CPM announced its decision to raise the interest rate for tenders (TIAO) by 2.95% to 3.50%, the margin lending facility from 4.70% to 5 , 25%, to maintain unchanged marginal income facility, to raise the fines to the banks to 7.00% to 7.55% and to maintain unchanged reserve requirements.

FCEB / du / APA

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