Côte d’Ivoire’s economy remains resilient in face of COVID-19 pandemic: IMF
Abidjan, Côte d'Ivoire (PANA) - Côte d’Ivoire’s economy has remained resilient in the face of the COVID-19 pandemic due to the Ivorian authorities’ swift and well-designed policy responses, theInternational Monetary Fund (IMF) has stated.
Mr. Luca Antonio Ricci, who let an IMF team to conduct the 2022 Article IV consultation discussions with the authorities 5 ‒15 April, said in a statement that COVID-related fatalities have been low by international standards while vaccination efforts continue with about half of the target population having received a first dose so far.
He said growth of the Ivorian economy, after slowing to 2% in 2020, is expected to have recovered strongly to an estimated 7% in 2021, driven by a rebound in consumption and investment.
Price inflation reached 5.6% in December 2021, reflecting mainly a surge in global prices, before declining somewhat to 4.5% in March.
The statement said the overall fiscal deficit reached 5.1% of GDP in 2021—- 0.5% of GDP lower than anticipated in the budget—mainly owing to gains from strengthened tax administration and ongoing digitization efforts, which in turn offset higher security spending.
“The deterioration in the external environment linked to the war in Ukraine is expected to weigh on the macroeconomic outlook in 2022," Mr. Ricci said.
He said the IMF staff forecast growth to slow down to 6% this year due to a subdued global demand, the deterioration of the terms of trade, and increased uncertainty.
The authorities have, meanwhile, taken a set of temporary measures to contain the effects of the war in Ukraine and preserve food security, including price ceilings on several food items, subsidies on petroleum products, and permit requirements for exporting some staple foods.
Mr. Ricci said: “The macroeconomic outlook is favorable, but Côte d’Ivoire still faces downside external risks. These risks stem mainly from the global repercussions of the war in Ukraine, tighter monetary policy in advanced countries and the associated increase in borrowing cost, as well as continued instability in some neighboring countries.
"The country also faces upside risks, notably the recent substantial oil and gas discovery and a resolute implementation of reforms under the 2021-25 National Development Plan (NDP) could help provide a boost to the medium-term outlook."
The statement said the IMF staff encouraged the authorities to evaluate closely the impact of measures that have been adopted so far to mitigate the effects of the war in Ukraine and to ensure that such measures do not generate market distortions, remain temporary and well-targeted towards the most vulnerable, and are kept in line with medium-term fiscal sustainability targets.
The staff also emphasised the importance of preserving macroeconomic and debt sustainability, by adequately anchoring expectations.
The statement added that the Staff envisages that, to the extent the external situation improves, reaching the West African Economic and Monetary Union (WAEMU) convergence criterion of a 3% fiscal deficit target by 2024 remains feasible. Over time it will also be essential to rebuild buffers.
“The Ivorian authorities and IMF staff agreed that continuing to strengthen domestic revenue mobilization is crucial for financing critical spending and enhancing macroeconomic resilience."
The statement noted that despite recent efforts, tax revenues remain relatively low by international standards.
"Staff pointed to the need to continue to mobilise additional domestic resources for priority spending to promote social convergence as well as to finance critical public infrastructure and services," it added.
-0- PANA MA 18April2022
