Dalia Hakura, Mission Chief for the Republic of Congo, reported that the country has had a pleasing macroeconomic performance so far. This year the country’s growth is projected at 6 per cent, despite the rebound in oil production.
“Year-on-year inflation has continued to decelerate and the overall price level in June 2014 was virtually unchanged from a year ago, largely as a result of declining food prices.”
Hakura mentioned the recently approved 2014 supplementary budget shows an increase in government spending due to preparations for the All Africa Games.
“This elevated spending implies a deviation from the fiscal rule that the authorities introduced in 2013. If fully implemented, the budget will considerably widen the non-oil primary deficit and hold back fiscal savings in 2014.”
Looking ahead to 2015, Hakura says authorities should look at the possibility for a larger fiscal adjustment while protecting targeted social spending and growth-enhancing capital spending.
Hakura mentioned that authorities should consider a prioritising completing basic infrastructure as well as looking at starting their conditional cash transfer program.
“The authorities are also encouraged to follow up on recommendations from the ongoing Public Expenditure Management and Financial Accountability Review by the World Bank and other development partners.”
Hakura advised authorities to continue with ongoing structural reforms to support inclusive growth in the non–oil sector.
“The mission welcomes the authorities’ near term focus on ensuring access to water for all, and encourages continuing efforts to improve the business climate. These reforms will be important to unlocking the potential of the private sector in the Republic of Congo,” she said.