WAEMU Inflation Stays Within Target Range for Fourth Straight Month
TLDR
- WAEMU region inflation remained at 2.1% year-on-year in February 2025, marking the fourth consecutive month within the BCEAO's 1-3% target range
- Senegal and Côte d'Ivoire recorded sharp declines to 0.6% and 0.7% respectively. Niger (3.6%), Benin (0.1%) and Togo (2.1%) also saw improvements
- Regional monetary and fiscal policies have kept overall inflation controlled, though officials warn external factors like commodity price volatility could threaten stability.
WAEMU region inflation remained at 2.1% year-on-year in February 2025, marking the fourth consecutive month within the BCEAO's 1-3% target range. Core inflation held steady at 1.3%, reflecting stable economic fundamentals across the region. Regional monetary and fiscal policies have kept overall inflation controlled, though officials warn external factors like commodity price volatility could threaten stability.
The decline in food prices drove the inflation slowdown, with food's contribution falling from 2.2 percentage points in January to 1.7 in February. Successful agricultural seasons and government price stabilization policies supported this improvement.
Country performances varied significantly. Senegal and Côte d'Ivoire recorded sharp declines to 0.6% and 0.7% respectively. Niger (3.6%), Benin (0.1%) and Togo (2.1%) also saw improvements. However, Mali (8.3%), Guinea-Bissau (5.8%), and Burkina Faso (2.3%) faced increasing inflation, with rates rising 0.7, 0.4, and 0.8 percentage points, respectively. These increases stem from supply shocks, political instability, and transportation cost pressures.
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Key Takeaways
The West African Economic and Monetary Union (WAEMU) comprises eight countries sharing the CFA franc currency, pegged to the euro. The central bank (BCEAO) maintains a unified monetary policy across these diverse economies. The region's banking sector, including recently-removed BRVM 30 index member BICICI, benefits from this price stability. Lower inflation strengthens real returns on financial assets and improves loan portfolio quality by reducing borrower stress. Recent political transitions in several member countries have tested the monetary union's resilience. Despite security challenges in the Sahel region affecting Mali, Burkina Faso, and Niger, the currency zone has maintained relative macroeconomic stability compared to neighboring non-WAEMU nations.
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