The Monetary Policy Committee (MPC) of the Central Bank of West African States (BCEAO) decided, at the end of its meeting held on September 11, 2024, to maintain the main policy rate at which the Central Bank lends its resources to banks at 3.50%, as well as the interest rate on the marginal lending window at 5.50%, levels in effect since December 16, 2023.
This decision is the result of an analysis of recent price developments, economic activity and the external situation of the Union. In the second quarter of 2024, inflation reached 4.1% compared to 2.9% in the previous quarter. This acceleration in price increases is mainly due to a less favorable 2023/2024 agricultural campaign, difficulties in supplying markets following the security situation, the increase in the prices of imported food products, as well as the increase in the cost of energy in certain countries.
According to the latest forecasts, inflation would stand at 3.7% in 2024, the same level as in 2023. In addition, the inflation rate is expected to return to the target range of 1% to 3% in 2025, thanks to the anticipation of a more favourable 2024/2025 agricultural campaign, the expected drop in global prices of imported food products and the measures taken by certain States to combat the high cost of living.
However, inflation remains subject to upward risks linked in particular to the persistence of the security situation in certain countries, the impact of unfavourable climatic conditions on agricultural production and the effect of an increase in geopolitical tensions on global prices of energy and food products. The Union's external situation has improved, thanks to the favourable development of the terms of trade and the greater mobilisation of external resources by the Union's Member States.
Economic activity remained dynamic, with real GDP growth of 5.3% in the second quarter of 2024. Over the year 2024, growth in the Union is forecast at 5.9% compared to an achievement of 5.3% in 2023. The increase in credits to the economy came to 5.3%, at an annual rate, at the end of June 2024. In the coming months, the Monetary Policy Committee will continue to monitor inflation and the economic, financial and monetary situation. It will take, if necessary, appropriate measures to ensure monetary stability in the area.
Done in Dakar, September 11, 2024
The President,
Jean-Cla