IMF Executive Board Concludes 2024 Article IV Consultation with Chad

IMF News, December 9, 2024

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2023 growth increased to 4.9 percent; non-oil activity expanded by 4.5 percent; oil GDP grew by 7.6 percent.
Inflation: declined in 2023 (to 4.2 percent from 8.3 percent at end-2022) then increased to 8.7 percent at end-August 2024.
External current account balance returned to a deficit of 0.7 percent of GDP in 2023.
Projected GDP growth: 3.1 percent in 2024 (impact of recent floods and a slight decline in oil production) with a rebound in the medium term owing to sustained public investment and structural reforms.
Inflation outlook: expected to remain temporarily elevated in 2024 and gradually converge towards the BEAC target of 3 percent over the medium-term as food and fuel prices moderate.

Non-oil primary deficit: increased substantially in 2023 to 11.9 percent of non-oil GDP; moderated to 4.2 percent of non-oil GDP during the first seven months of 2024.
Total public debt: fell to 34.2 percent of GDP in 2023 as persistently high oil prices boosted government revenue.
Government deposits (liquidity buffers): fell from 3.4 percent of GDP at end-2022 to 1.1 percent at end-July 2024.
Fiscal projections and targets:
- Reduction in non-oil primary deficit to 8 percent of non-oil GDP in 2024.
- Non-oil primary deficit projected at 7.2 percent in 2025.
- Non-oil primary deficit projected at 5 percent over the medium term.
- Public debt projected to stabilize at around 32 percent of GDP.
- Net debt projected to gradually decline to 27½ percent of GDP by 2029, reflecting the gradual build-up of fiscal reserves of 5 percent of GDP.

Directors called for intensified efforts to strengthen the financial sector, including accelerating adoption and implementation of restructuring plans for the two systemic public banks and providing for their recapitalization.
Encouraged acceleration of structural reforms to:
- Digitalize tax administration.
- Strengthen public finance and investment management.
- Improve SOE management.
- Strengthen governance and anti-corruption frameworks.
- Improve education, increase access to basic infrastructure, promote formalization and financial inclusion.
- Improve women’s educational outcomes and increase female labor force participation.

External current account balance (including official transfers) projections:
- 2023: -0.7 percent of GDP.
- 2024: -1.3 percent of GDP.
- 2025: -4.2 percent of GDP.
External debt:
- 2023: 16.1 percent of GDP.
- 2024: 15.8 percent of GDP.
- 2025: 17.0 percent of GDP.
Key risks to the outlook: potential delays in implementing fiscal consolidation measures; a larger-than-expected decline in oil prices; an increase in the influx of Sudanese refugees; a further increase in the frequency and severity of climate change-related events.

Directors agreed with the thrust of the staff appraisal and noted negative impacts of recent severe shocks, including historical floods and continuous inflows of refugees from Sudan, on growth and food security.
Welcomed authorities’ reengagement with the Fund and commitment to promoting economic and social development, including broadening access to public services, strengthening governance, and improving the business environment.
Encouraged authorities to work with the IMF and other development partners to finalize the new national development plan (PND) and to articulate macroeconomic policies and reforms to reach objectives.
Fiscal policy advice:
- Adopt a prudent and sustainable fiscal policy to create fiscal space for social and investment spending.
- Anchor fiscal stance on a net debt target and buildup of fiscal buffers to increase resilience to shocks.
- Mobilize non-oil revenue and streamline non-priority spending.
Climate and resilience:
- Integrate climate change into the PND to enhance public investment management capacity.
- Reactivate the High Interministerial Committee for the Environment to strengthen policy coordination and facilitate access to international climate funding.
Statistics and capacity development:
- Improve quality and timely provision of economic statistics.
- Align capacity development delivery planning with authorities’ demand and coordinate with other technical assistance providers.

Output (annual percentage change)
- GDP at constant prices: 2023: 4.8; 2024 Prel.: 3.2; 2025 Proj.: 3.4
- Oil GDP: 2023: 7.6; 2024 Prel.: -0.5; 2025 Proj.: -1.4
- Non-oil GDP: 2023: 4.5; 2024 Prel.: 3.7; 2025 Proj.: 4.2

Prices (annual percentage change)
- Consumer price index (period average): 2023: 4.1; 2024 Prel.: 8.7; 2025 Proj.: 4.4

General Government Finance (percent of non-oil GDP)
- Revenue and grants: 2023: 18.6; 2024 Prel.: 20.2; 2025 Proj.: 19.6
- Expenditure: 2023: 20.4; 2024 Prel.: 20.7; 2025 Proj.: (value not provided)
- Overall fiscal balance (commitment): 2023: -1.8; 2024 Prel.: -0.1; 2025 Proj.: -1.1
- Non-oil primary balance (commitment basis): 2023: -11.2; 2024 Prel.: -7.5; 2025 Proj.: -6.8

Total debt (percent of GDP): 2023: 30.3; 2024 Prel.: 29.5; 2025 Proj.: (value not provided)

Money and credit (annual percentage change)
- Credit to the economy: 2023: 11.0; 2024 Prel.: 9.0; 2025 Proj.: 9.5
- Broad money: 2023: 14.6; 2024 Prel.: 10.3; 2025 Proj.: 10.8

External sector (percent of GDP)
- Current account balance, including official transfers: 2023: -0.7; 2024 Prel.: -1.3; 2025 Proj.: -4.2
- External debt: 2023: 16.1; 2024 Prel.: 15.8; 2025 Proj.: 17.0

Press Release No. 24/457, IMF Communications Department, December 9, 2024.