CdI Economic Outlook
Annual GDP growth accelerated to 7.3% year on year in Q4 (Q3: +4.3% yoy) due to more robust expansions in industrial output and services activity. Growth in industry was driven by stronger construction activity and increased gas and gold extraction, while stronger expansions in hospitality, transport and retail buttressed the services sector. These positive developments more than offset the impact of agricultural activity growing at a slower rate. Q4’s performance took growth for 2022 as a whole to 6.8% (2021: 7.4%). Turning to Q1, momentum was likely resilient: Annual industrial activity expanded in January–February, amid stronger manufacturing output. Moreover, softer inflation in the quarter should have supported private spending. Meanwhile, business confidence in Q1 was unchanged from Q4. That said, an interest rate hike in March, likely dampened investment growth.
Harmonized inflation was stable at March’s 5.2% in April. Increased food inflation was offset by lower transport price pressures. Meanwhile, in March, the Central Bank of Western African States raised its policy rate by 25 basis points to 5.00% to tame inflation. This, together with slower economic activity, should cool inflation further in 2023.