Togo: Loans to the economy on the rise, while related cost and public debt slumps

Economic governance
Friday, 05 July 2019 16:31
Togo: Loans to the economy on the rise, while related cost and public debt slumps

(Togo First) - On July 4, 2019, Minister of finance, Sani Yaya, confirmed IMF’s recent forecast for the Togolese economy this year. This was during the second roundtable of the national credit council (CNC) in 2019.

Looking at available data, economic growth should reach 5.1% in 2019, after standing at 4.9% in 2018 and 4.4% in 2017. This growth would be spurred by growth in all sectors of activities, the tertiary in particular, amid controlled macroeconomic balances,” Yaya declared.  

He then lauded better financing conditions which probably contributed to an increase in loans to the economy (38% of GDP at the end of March 2019, the highest within the WAEMU), even if they are still insufficient compared to investment needs.

At March 31, 2019, loans to the economy rose, driven by intermediation activities of banks and decentralized finance systems,” the official said before adding: “Also, cost of lending by banks slumped. Weighted average interest rate on loans provided by banks was 7.80% at this date, against 8.31% a year early.”  

Similarly, public debt which for long was a bottleneck for public investment also reduced to 67.5% (against a standard of 70% in WAEMU) as the government paid part of its arrears and musters efforts to improve public finances.

For Sani Yaya, “the decrease should continue, with a controlled public deficit.” A projection he “correlates with more rationalized public expenses and greater tax income.” In these conditions, inflation should remain weak, standing at 1.7% in 2019, against 0.9% in 2018.

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