Macroeconomic Performance
Table 1: Overview of some macroeconomic indicators
Burkina Faso recorded an improved GDP growth of 3.6 per cent in 2023, up from 1.8 per cent in 2022, supported by services sector growth. Agriculture and mining activities suffered from the impacts of insecurity, leading to subdued contributions to GDP. Average inflation declined markedly to 0.9 per cent in 2023, from 13.8 per cent in 2022, as food, non-alcoholic beverages and alcoholic drinks prices declined. Fiscal balance narrowed to -6.8 per cent of GDP in 2023 from -10.7 per cent in 2022 on the back of increased revenue growth and a decline in expenditure. The debt-to-GDP ratio, however, increased to 61.9 per cent in 2023 from 58.4 per cent in 2022, while the current account balance worsened to -7.9 per cent of GDP in 2023 from -7.2 per cent of GDP in 2022.
Outlook
The economy is projected to record significant growth in 2024 and 2025, ending at 5.3 per cent and 5.5 per cent, respectively, supported by favourable commodity prices, particularly gold. Average inflation is projected to increase substantially to 2.2 per cent in 2024, driven mainly by increased food, energy and utilities prices, declining marginally to 2.1 per cent in 2025. Fiscal consolidation is projected to continue, leading to a further decline in the fiscal balance to -5.7 per cent of GDP in 2024 and -4.7 per cent of GDP in 2025. The debt-to-GDP ratio is projected to remain on an upward trajectory, ending 2024 at 63.6 per cent in 2024 and 63.4 per cent in 2025. The country is expected to achieve a narrowing of the current account balance to -6.3 per cent of GDP in 2024 and further to -4.6 per cent of GDP in 2025.
Probable Headwinds
Burkina Faso will be faced with subdued trade relations with ECOWAS if it proceeds to exit the Community as planned. This will adversely affect prices, plunging many in the population into poverty. The growth in economic activity will be adversely affected as a result of this and its approximately 18 per cent trade with the rest of the countries in the sub-region, which could be subject to tariff and non-tariff barriers. Furthermore, insecurity still ranks high on the country’s risk profile, given that the insurgency in the northern part of the country has not been surmounted. The threat of insecurity, together with an unstable rainfall pattern, are key risks to agricultural output.