The economic growth rate in the West African Economic and Monetary Union (UEMOA) is expected to drop to 2.6% in 2020, estimates the Monetary Policy Committee (CPM) of the BCEAO, the central bank of the said zone.

''For the whole of 2020, the forecasts made by the Central Bank [of West African States] are counting on an economic growth rate for the Union of 2.6%, against a initial forecast of 6.6%,” the CPM said in a statement released after its second regular meeting.

It reports a “sharp slowdown” in economic activity over the first three months of the current year.

“The GDP (gross domestic product) of the Union increased year-on-year by 3.3%, in the first quarter of 2020, after 6.5% a quarter earlier”, notes the Monetary Policy Committee.

He explains that ''this deceleration in economic activity is mainly [caused] by the tertiary sector, whose contribution to growth fell by half compared to the previous quarter''. This situation reflects “the first effects of the spread of the coronavirus pandemic, particularly in the tourism, hotel, transport and trade sectors”.

According to the CPM, the execution of the budgets of the WAEMU member states was strongly impacted by the Covid-19 pandemic, over the first three months of 2020.

''Indeed, the governments have initiated response plans which have resulted in a drop in revenue and an increase in expenditure resulting in a worsening of the budget deficit,'' he explains.

He adds ''the budget deficit (including donations) would stand at 922.1 billion or 4.5% of GDP at the end of March 2020, against 222.5 billion or 1.1% of GDP at the same period of the year. former''.

The WAEMU CPM nevertheless observes ''a slight acceleration in the rate of growth of the money supply year-on-year, in conjunction with the rebound in net foreign assets, as well as the increase in domestic claims''.

''The Union's foreign exchange reserves strengthened on an annual basis, ensuring 6.3 months of imports of goods and services at the end of March 2020.''

On the other hand, the average quarterly interest rate of the weekly liquidity injection calls for tenders fell from 2.98% in the last quarter of 2019 to 2.69% in the first quarter of 2020.

Since April 2020, it has been at 2.50%, in connection with the injections of liquidity at the fixed rate of 2.50% launched by the Central Bank to combat the harmful effects of the health crisis.