Press Release No. 10/116
March 26, 2010
A mission from the International Monetary Fund (IMF) led by Joannes Mongardini, visited Cotonou during March 11-26, 2010. The mission held discussions on a program that could be supported by the IMF under the Extended Credit Facility (ECF), and conducted the 2010 Article IV consultation discussions.1 The mission met with the President of the Republic, His Excellency Dr. Thomas Boni Yayi, the Senior Minister for Prospective, Development, Evaluation of Public Policy, and the Coordination of Government Action, Mr. Pascal I. Koupaki, Minister of Economy and Finance, Mr. Idriss L. Daouda, and other senior officials. It also held fruitful discussions with representatives of civil society, labor unions, donors, and the private sector.
At the end of the mission, Mr. Mongardini issued the following statement:
“The global economic crisis had a negative impact on Benin in 2009. Notwithstanding the authorities' countercyclical fiscal policies, real GDP growth slowed to 2.7 percent, compared with 5.0 percent in 2008. Inflation came down to an average 2.2 percent, reflecting lower food and fuel prices. Government revenues stagnated mostly because of lower trade activity. A strong fiscal adjustment effort in the second half of 2009 to align expenditures with available financing limited large expenditure overruns. However, domestically financed capital expenditures doubled, and the wage bill increased by 24 percent compared with 2008. These developments widened the overall fiscal deficit (excluding grants) to 7.0 percent of GDP, which was financed through additional budget support from the international community and domestic borrowing. On the external sector, cotton exports declined significantly reflecting lower international prices and workers’ remittances fell. As a result, the current account deficit, excluding grants, widened to 9.3 percent of GDP, compared with 7.0 percent in 2008. While the banking sector experienced some liquidity pressures in the first half of the year, as deposit growth decelerated, it overall weathered the crisis relatively well, and prudential ratios improved.”...
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