Ivory Coast outlooks is robust amid strong growth and low inflation

ABIDJAN (Capital Markets in Africa) – The International Monetary Fund indicated that Côte d’Ivoire’s medium-term outlook is robust amid strong economic activity and low inflation. As such, it projected real GDP growth at 7.4% in 2018 and 7% in 2019 compared to 7.8% in 2017. Also, it forecast the average inflation rate at 1.7% this year and 2% next year relative to 0.8% last year.

Further, it welcomed the authorities’ sound macroeconomic policy management despite the domestic shocks and unfavourable cocoa export prices, and commended the country’s good economic performance under the IMF-supported program. It noted that authorities have adopted a set of economic reforms to achieve a sustainable balance-of-payments position, to promote inclusive growth and to reduce poverty by investing in priority infrastructure and social projects.

In parallel, the IMF welcomed the authorities’ efforts to narrow the fiscal deficit to about 3% of GDP by 2019, in line with the convergence criteria of the West African Economic and Monetary Union countries. It said that the government could achieve this objective through accelerating revenue administration reforms, implementing additional tax measures and prioritising spending. In this context, it forecast the fiscal deficit to narrow from 4.2% of GDP in 2017 to 3.8% of GDP in 2018 and 3% of GDP in 2019.

It considered that sustained fiscal consolidation would limit the country’s recourse to external financing and would help mitigate risks from tighter global financing conditions. Further, it projected the public debt level to reach 48.7% of GDP at the end of 2018 and 47.3% of GDP at end-2019 relative to 46.8% at end-2017. It called on authorities to continue with their prudent debt and financial management in order to put the debt level on a downward path.

Further, the IMF called on the government to accelerate the restructuring of the energy sector to preserve the sector’s financial sustainability and support economic growth. It also encouraged the timely resolution of the arrears accumulated by the public sector, as well as the debt restructuring of the national oil refinery Société Ivoirienne de Raffinage.

Source: International Monetary Fund