According to a press release, the Committee reviewed the main developments in the international and regional economic situation 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. Examining the internal situation, the Committee noted that economic activity in the WAEMU increased slightly in the third quarter of 2020, in line with the lifting of mobility restrictions and the effects of the public support policies put in place.

The Union's GDP grew by 0.6% compared to the same period of 2019, after a decline of 2.0% a quarter earlier. For the whole of 2020, the latest forecasts place the Growth Rate of the Union's GDP at 0.9% against 5.6% in 2019.

"The implementation of national budgets over the first nine months of 2020 shows a worsening of deficits compared to the same period of the previous year, induced by the effects of the pandemic on revenues as well as by the response and recovery measures taken by the States. Indeed, the budget deficit, based on commitments, including grants, amounted to 3,742.1 billion or 5.5% of GDP at the end of September 2020 against 1,576.3 billion or 2.4% of GDP a year earlier, "notes the Cpm.

At the monetary level, the money supply consolidated compared to the same quarter of the previous year, with an increase of 15.5% against 13.2%. This acceleration was reflected in increases in net foreign assets (+19.3%) and domestic receivables (+11.8%). The Union's foreign exchange reserves were at a comfortable level, covering 5.6 months of imports of goods and services. It corresponds to a coverage rate of the monetary issue of 74.7% against 75.3% a quarter earlier.

On the money market, financing conditions continued to ease, in line with fixed-rate liquidity injection operations since the end of March 2020 and the effects of the decision to lower key interest rates on 24 June 2020. Thus, the weighted average rate of weekly liquidity injection operations stood at 2.00% in the third quarter of 2020 against 2.46% in the previous quarter and 3.15% a year earlier.

Turning to the inflation situation in the Union, the Committee noted that the general level of consumer prices averaged 2.9% in the third quarter, following a 1.7% increase in the previous quarter. The acceleration in the rate of increase in the general price level is mainly reflected in the rise in the price of local cereals, fishery products, fresh vegetables and tubers and plantains.

On the basis of these analyses, the Cpm decided to keep unchanged the minimum interest rate for submission to liquidity injection tender operations at 2.00% and the interest rate of the marginal loan window at 4.00%, levels in effect since June 24, 2020. The minimum reserve ratio for EU banks remains unchanged at 3.0%.