The impact of the coronavirus pandemic will be less than expected on CEMAC economies. The monetary policy committee of the central bank BEAC revealed during its September 30, 2020, videoconference meeting.
According to the committee, almost all of the economic sectors rebounded in Q3-2020. The sectors still affected by various restriction measures are lodging, transport, and entertainment.
This rebound in economic activity was due to a rise in oil prices and the “progressive lift of restriction measures,” the committee indicates. Therefore, it adds, benchmark economic indicators will improve by the end of the year. “Even though they will remain in recession, the countries of the sub-region will not be hit as hard as thought previously,” the committee wrote in the release published after its meeting.
In the sub-region, The 2020 GDP decline will only be 3.5% instead of the 5.9% decline forecasted in June 2020. The inflation rate will rise to 2.6% instead of 2.5%, we learn.
At the same time, the budget and external deficits will be lower than projected. They should be 2.6% and 4.7% of GDP respectively instead of the respective 4.5% and 7.3% of GDP announced in June 2020. Foreign reserves will rise “above the threshold of 3-month import,” while the external coverage rate would be 69.9% against 67.1% a year earlier.
Despite “these promising prospects, the consolidation of the BEAC’s external position will remain fragile in 2020 given the major uncertainties surrounding the subregion’s economic outlooks (…) In this context, the BEAC maintains its accommodative stance of monetary policy to limit the negative impacts of the COVID-19 crisis on the economies in the sub-region,” the release informs.