Under the chairmanship of Mr. Tiémoko Meyliet KONE, Governor of the Central Bank, its Statutory Chairman, the Monetary Policy Committee (MPC) of the Central Bank of West African States (BCEAO) held, on Wednesday, June 9, 2021, its second ordinary meeting for the year 2021, by videoconference. The main developments in international and regional economic conditions in the recent period, as well as the risk factors that could affect the medium-term outlook for inflation and economic growth in the Union, were reviewed.

The Committee noted progress in vaccination campaigns as well as the continued implementation of fiscal and monetary support measures have strengthened market confidence and improved the economic outlook. In international markets, commodity prices continued their upward trend for the third consecutive quarter, driven by the recovery in global demand and the persistence of certain supply constraints. At the same time, non-energy commodity prices strengthened with an increase of 27.8%, after an increase of 11.8%. In this wake, the price index of non-energy raw materials exported by WAEMU countries rose by 5.1% in the first quarter of 2021, after an increase of 2.7% a quarter earlier. For its part, the price index of the main food products imported by WAEMU countries grew by 19.4% in the first quarter of 2021, after an increase of 11.2% a quarter earlier.

Examinating the internal economy, the Committee noted a strengthening of the recovery of economic activity in the WAEMU in the first quarter of 2021, with a real GDP growth rate of 3.2%, on an annual basis, after 1.8% in the previous quarter. The execution of the financial operations of the WAEMU member States, during the first three months of 2021, ended, with reference to the same period of the previous year, by a reduction in the overall budget deficit, based on commitments, including grants, amounting to 2.9% of GDP against 4.5% a year earlier. In the money market, financial conditions remained favourable, in line with the accommodative stance of monetary policy pursued by the Central Bank. The weighted average auction rates on the one-week and one-month compartments of the Central Bank's counters remained at 2.00%. The weighted average interest rate on the one-week maturity of the interbank market fell to 2.53%. The average bank loan rate fell by 16 basis points compared to the fourth quarter of 2020 to 6.42% in the first quarter of 2021. The weighted average interest rate on Treasury bills came in at 3.6% from 4.5% a year earlier.