WAEMU’s GDP rose slightly by 6.5% last quarter, driven by local demand

Economic governance

Monday, 11 June 2018 17:32

WAEMU’s GDP rose slightly by 6.5% last quarter, driven by local demand

(Togo First) - From 6.4% in Q4 2017, GDP of the West African Economic and Monetary Union (WAEMU) grew by 6.5% in Q1 2018, driven by local demand. This, in the context where prices of oil, cashew, cotton, cocoa, and gold went back up, and prices of palm oil, coffee and rubber slumped.

The figure was disclosed in a statement released at the end of the second ordinary session of the WAEMU’s monetary policy committee (CPM), held last June 6.

Commenting on the figure, the governor of the Central Bank of West African States (BCEAO), Tiémoko Meyliet, also chairman of CPM, declared: “this growth which began since 2012, continues at a pace that we deem satisfying as it exceeds 6%. It is one of the strongest growth rates in Africa at this time”.

Moreover, average inflation rate in the union grew by 0.9% in Q1 2018, as compared to the previous quarter. The committee attributes the rise to an increase in food prices resulting from cereal prices soaring in some Sahel nations.

By the end of 2018, inflation rate is expected to rise by 1.5%, well in line with goals set by the community in terms of price stability.

In regards to budget deficit, the States forecast the figure at 3.8% of GDP in 2018, against 4.2% in 2017. However, CPM urged WAEMU States to keep making efforts to raise internal funds, in order to bring the gap down to 3% at end-2019.

Given the satisfying conditions, CPM has decided to maintain its benchmark rates. Hence, minimum interest rate for application to demand for liquidity supply, which is the BCEAO’s main benchmark rate, remains at 2.5%, the same since Sept. 16, 2013. Similarly, interest rate on marginal lending facility was kept at 4.5% and reserve ratio imposed to banks within the union was maintained at 3%.

Fiacre E. Kakpo

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