Cameroon Economic Forecast

Economic growth accelerated in Q2 2022, clocking in at 4.0% annually from 3.4% in Q1. The upturn was driven by stronger domestic demand: Private and public consumption both expanded at a quicker pace, while fixed investment rebounded from its Q1 contraction. On the other hand, exports fell for the first time in a year due to lower oil and gas exports, further widening the current account deficit in the quarter. Meanwhile, government hydrocarbon revenue jumped by a whopping 91.0% in January–October amid elevated global prices, stimulating government spending. In January, the IMF approved a USD 74.6 million fund—pending board approval in March—to help rebuild the country’s international reserves and called on the government to undertake significant infrastructure projects and reduce fuel subsidies. However, scrapping the latter could stoke inflation and political tensions.

Inflation in Yaounde rose to 7.6% in September (August: 6.6%) due to double-digit price increases for food. Energy and transport costs remained roughly stable due to government subsidies. In 2023, lower commodity prices, the CFA’s euro peg and higher interest rates should dampen inflation. A potential removal of government subsidies is the main upside risk.