The economic shock within the Economic and Monetary Community of Central Africa (Cemac), associated with the Covid-19 health crisis, has led to a sharp deterioration in budgetary and external balances in 2020. This situation makes the economic outlook uncertain. for the 2021 fiscal year. For the International Monetary Fund (IMF), although the pandemic appears to be under control in the region, for the time being, balanced fiscal consolidation efforts within states remain a safe avenue.
“With the fall in oil prices over the medium term, the outlook is that Cemac’s budgetary and external adjustments will be slower than previously expected, and risks are tilted to the downside. Growth is expected to rebound in 2021 to 2.7% and continue to gradually accelerate to around 3.5% over the medium term, as reforms to improve governance and the business climate are expected to slowly pick up. ‘implant’, say the directors of the IMF.
According to them, balanced fiscal consolidation efforts would increase non-oil revenues and contain spending. “Reserves are expected to be rebuilt at a slower pace than previously forecast, but are expected to reach the equivalent of 5 months of imports by 2025. Inflation is expected to remain around 2.5% over the medium term, below of the regional convergence criterion because the monetary policy would remain sufficiently tight ”they predict.
However, this outlook is very uncertain and depends on the evolution of the pandemic and its impact on oil prices according to the IMF. The latter invites national authorities to initiate programs of radical transformation in the region, by implementing governance, transparency and business climate reforms that will lay the foundations for diversified, inclusive and sustainable growth.