Table 1: Overview of some macroeconomic indicators
Benin recorded an average growth rate of 6.1 per cent over the last five years. Benin’s economic activity grew by 6.0 per cent in 2022, compared to 7.2 per cent a year earlier. This growth was supported by the growth in agriculture production, especially cotton, and the services sector. Inflation in 2022 was significantly lower than the global and sub-regional average. The average inflation rate fell slightly to 1.5 per cent in 2022 from 1.7 per cent in 2021, made possible by temporary fiscal interventions and a successful agricultural season, including good food crop harvests. The fiscal deficit as a percentage of GDP fell slightly but remained above the 3 per cent threshold. Fiscal deficit increased to 5.6 per cent of GDP in 2022 from 5.7 per cent of GDP in 2021. Despite an increase in debt from 50.3 per cent of GDP in 2021 to 52.4 per cent in 2022, the country is not debt distressed. The current account deficit deteriorated further to 5.7 per cent of GDP in 2022 from 4.2 per cent of GDP in 2021.
Economic growth rate is expected to rise slightly to 6.1 per cent in 2023 before falling to 5.9 per cent in 2024. Having successfully contained inflation over the past two years, Benin is projected to record an inflation of 3.8 per cent in 2023, falling to 2.1 per cent in 2024. The fiscal deficit is expected to decline in 2023 and 2024 to 4.3 per cent and 2.9 per cent of GDP, respectively. Gross debt is projected to reach 52.8 per cent of GDP in 2023 before declining slightly to 51.6 per cent of GDP in 2024. The current account deficit is expected to worsen further in 2023 to 6.1 per cent of GDP before declining to 5.2 per cent of GDP in 2024.
Benin, like other countries in the sub-region, continues to face the negative impact of global inflationary trends that were initially fuelled by COVID-19 and then by the energy crisis induced by the Russia-Ukraine war. Unless the global inflationary expectations abate, the country will face higher financing costs both domestically and in regional financial markets. In addition, the terrorist attacks that occurred in the north of the country in 2022 constitute a real security risk, the persistence of which could have a negative impact on economic activity, particularly agriculture.