IMF projects Chad’s growth to slow to 3.1% in ’24

Chad’s economic growth is forecast to slow to 3.1 per cent in 2024, driven by recent floods and a slight decline in oil production, according to the International Monetary Fund (IMF) latest assessment. However, the Fund expects it to rebound in the medium term with sustained public investment and structural reforms.

Further fiscal consolidation efforts focused on mobilizing non-oil revenue and streamlining non-priority spending would contribute to a reduction in the non-oil primary deficit to 8 percent of non-oil GDP in 2024, 7.2 percent in 2025, and 5 percent over the medium term.

Inflation is anticipated to remain elevated temporarily before converging to the BEAC target of 3 per cent as food and fuel prices moderate.

The IMF’s Article IV consultation highlighted Chad’s 2023 recovery, with GDP growth at 4.9 per cent, supported by a 7.6 per cent expansion in oil GDP and a 4.5 per cent rise in non-oil activity. However, inflation surged to 8.7 per cent by August 2024 due to fuel price adjustments and food price rebounds.

Public debt dropped to 34.2 per cent of GDP in 2023, aided by high oil revenues, though liquidity buffers declined significantly. It is projected to stabilise at around 32 percent of GDP while net debt would gradually decline to 27½ per cent of GDP by 2029, “reflecting the gradual build-up of fiscal reserves of 5 per cent of GDP.”

The non-oil primary deficit is projected to reduce to 8 per cent of non-oil GDP in 2024, reflecting fiscal consolidation efforts. The IMF stressed the need for reforms to diversify the economy, improve governance, and strengthen the financial sector. Risks to the outlook include potential delays in fiscal consolidation, falling oil prices, and increasing climate-related shocks.

Attribution: IMF