Burkina Faso’s 6 percent projected economic growth unwavering despite passive inflation

The International Monetary Fund (IMF) on Monday reiterated that Burkina Faso’s economy is still on track and the GDP is expected to grow by 6 percent this 2018, in line with the last two years’ average.

In 2017, economic growth is estimated to have accelerated to 6.5 percent from 5.9 percent in 2016, due to higher agricultural output (cotton production, increased mining activity, and a significant scaling up of public investment).

The West African country, like many other African countries, faces significant development challenges, which have intensified recently due to security shocks and social unrest.

Although inflation has remained passive, with consumer prices rising by only 2 percent year-on-year in 2017, “The economic outlook is broadly favorable but also contains downside risks. Economic growth has accelerated, and revenue collections have improved. The main risks to the outlook stem from security and domestic challenges.” Deputy Managing Director of IMF Mitsuhiro Furusawa stated.

This 2018, the IMF projects that Burkina Faso’s GDP growth is expected to stabilize at 6 percent over the medium-term. The IMF expects inflation to remain moderate, and the fiscal deficit is projected to converge to nothing more than 3 percent of GDP in 2019.

While growth is expected to stabilize, there are, however, key risks to the outlook- further deterioration in the security environment and, on the external front, the price volatility of Burkina Faso’s major import and export commodities, namely oil, cotton and gold, as well as the vagaries of rainfall. Most recent IMF report stated.