Benin flag Benin: Economic outline

Economic Outline

Economic Indicators

Benin’s strong macroeconomic fundamentals have helped the country achieve robust economic growth despite recent external shocks such as the Covid-19 pandemic and the war in Ukraine. After reaching 6.3% in 2022, GDP growth remained resilient in 2023, slowing down to 5.5% (IMF), fueled by robust agricultural production, an expanding agroindustry sector invigorated by new operations at the Glo Djigbe Industrial Zone (GDIZ), and lively construction endeavors. Economic growth is expected to pick up to an annual average of 6.3% in 2024 and 6% next year, reflecting higher infrastructure spending, increased agricultural output, and a wider regional recovery.

Benin is dedicated to a consolidation strategy, centered around the IMF program, with the goal of decreasing the budget deficit to 3% of GDP by 2025 from 5.5% in 2022. Fitch predicts the budget deficit will decrease to 4.7% of GDP in 2023, 4.1% in 2024, and 3.3% in 2025. The program prioritizes revenue mobilization, aiming to increase tax/GDP by 0.5 percentage points each year. In recent years, the general government debt/GDP ratio has risen, reaching an estimated 53% in 2023 according to the IMF. Projections suggest that debt is expected to decrease to 52.4% in 2024 and further to 51.4% in 2025, bolstered by budget consolidation efforts and GDP growth. Public debt is divided equally between multilateral loans, external obligations, and domestic obligations, and it should stabilize thanks to continued fiscal consolidation and growth (Coface). In 2023, the current account deficit stood at 6.1% of GDP, showing only a slight improvement from 6.2% in 2022. This occurred despite declines in international fuel and food prices and a weakened dollar. Factors contributing to this trend include reduced cotton production and prices, decreased trade volumes with Nigeria and Niger, and increased official imports of fuel, as reported by Fitch Ratings. As per inflation, it was estimated at 5% in 2023, with an expected reduction to 2.5% this year and 2% in 2025 (IMF).

Despite many efforts to reduce it, the poverty rate remains as high as 38.5% according to World Bank data. In 2022, the unemployment rate in the country was estimated at 1.5%. However, the underemployment rate stood at more than 70%, and the informal employment rate at more than 90% (World Bank).

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 17.4419.4021.3723.1124.93
GDP (Constant Prices, Annual % Change) 6.35.86.06.06.0
GDP per Capita (USD) 1,3051,4111,5121,5901,669
General Government Gross Debt (in % of GDP) 54.254.253.452.451.4
Inflation Rate (%) 1.42.83.02.02.0
Current Account (billions USD) -1.05-1.08-1.07-1.06-1.15
Current Account (in % of GDP) -6.0-5.6-5.0-4.6-4.6

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
CFA Franc BCEAO (XOF) - Average Annual Exchange Rate For 1 ZAR 40.3143.7641.9040.6934.94

Source: World Bank, 2015

 

Return to top

Any Comment About This Content? Report It to Us.

 

© eexpand, All Rights Reserved.
Latest Update: April 2024