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IMF Projects Inflation Rate of 4.6% in Cameroon, the Highest since 2008 after Hunger Riots

INFLATION
IMF predicts highest inflation since 2008

The inflation rate in Cameroon should reach 4.6% during the year 2022, according to projections made by the International Monetary Fund.

 

 

The information is contained in the communiqué that sanctioned the 2nd review of the three-year economic and financial programme with Cameroon, published on 29 June 2022.

This projection stems from “the sharp increase in international commodity prices – particularly oil, fertilisers and food – accentuated by the war in Ukraine and the tightening of conditions on international financial markets,” explains the Bretton Woods institution. This reality leads to additional production costs for companies, which are passed on to the finished products put on the market.

If this forecast comes true, Cameroon will have recorded its highest inflation rate since 2008, when this indicator peaked at 5.3%, according to data compiled by the World Bank. That year, widespread price rises in the country led to a popular uprising known as the “food riots“.

Several major cities went up in flames. To catalyse a drop in the prices of certain products on the market, the Head of State, Paul Biya, was led, through an ordinance signed on 7 March 2008 (the riots had taken place at the end of February), to exempt imported rice and fish from customs duties, two of the most imported food products in the country, but also the most consumed by the population.

The IMF’s inflation forecasts are more pessimistic than those of the US rating agency Fitch. Indeed, in a note on the Cameroonian economy published on 10 June 2022, Fitch projects an inflation rate of 3.3% in Cameroon in 2022.

 

In any case, the projections of the two international structures are above the threshold of 3% allowed by the convergence criteria of the Cemac.



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