{
  "title": "IMF Executive Board Concludes 2016 Article IV Consultation with Chad",
  "publication": "IMF News, July 25, 2016",
  "sourceUrl": "https://www.imf.org/en/news/articles/2016/07/25/21/37/pr16360-chad-imf-executive-board-concludes-2016-article-iv-consultation",
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  "summary": "Major exogenous shocks: lower oil prices and elevated regional insecurity have caused oil revenues to \"collapse to a fraction of their previous level\" and disrupted economic activity.",
  "publishDate": "2016-07-25",
  "sections": [
    {
      "heading": "Macroeconomic developments and shocks",
      "content": "- Major exogenous shocks: lower oil prices and elevated regional insecurity have caused oil revenues to \"collapse to a fraction of their previous level\" and disrupted economic activity.\n- Security threats caused economic disruption, reprioritization of spending to defense, hosting of refugees and internally displaced persons, and exacerbated the economic situation.\n- Economic activity:\n  - GDP growth estimated to have decelerated to 1.8 percent in 2015 from 6.9 percent in 2014.\n  - Non-oil GDP contracted by -2.9 percent in 2015.\n  - Oil GDP recorded -4.8 percent in 2015.\n- Prices and inflation:\n  - Domestic price volatility increased, with average inflation of 3.7 percent in 2015, slightly above the CEMAC target of 3 percent.\n- Fiscal and public finance:\n  - Despite a large fiscal adjustment, the overall fiscal deficit remained high at 6.6 percent of non-oil GDP in 2015.\n  - Domestic arrears accumulated to reach 3.9 percent of non-oil GDP (CFAF 200 billion) at end-2015.\n- Monetary and financial:\n  - Money supply contracted and credit to the private sector slowed significantly in 2015.\n  - Net foreign assets change: -40.3 (2015).\n  - Net domestic assets change: 35.6 (2015).\n  - Credit to private sector: 0.3 (2015).\n- External sector:\n  - Current account balance, including official transfers, widened to -12.4 percent of GDP in 2015 from -9.0 percent in 2014.\n  - Export of goods and services, f.o.b. change: -17.4 (2015).\n  - Import of goods and services, f.o.b. change: -23.7 (2015)."
    },
    {
      "heading": "Short- and medium-term outlook and projections (2016–2018)",
      "content": "- Growth projections:\n  - Including a contraction of 1.1 percent in 2016, GDP growth is projected to average about 2 percent per year over 2016–18, compared to almost 5 percent over 2013–15.\n  - A gradual recovery of non-oil GDP growth is expected over 2016–2018, reaching 4 percent per year over the medium term.\n  - Drivers of recovery: agriculture, commerce, and transportation and easing fiscal constraints with a rebound of fiscal oil revenues.\n- External outlook:\n  - External position projected to remain weak, with only a gradual improvement in the trade balance starting in 2017.\n  - Foreign direct investment in the oil sector will remain a key source of external financing."
    },
    {
      "heading": "Executive Board assessment and key messages",
      "content": "- Directors welcomed authorities’ policy efforts, noting a substantial fiscal adjustment and progress on the structural front despite adverse external conditions.\n- Directors emphasized that the collapse in oil revenue and elevated regional insecurity have seriously affected the macroeconomic situation and near‑term outlook.\n- Core Board recommendations and concerns:\n  - Additional fiscal efforts and bolder structural reforms are needed to safeguard fiscal and financial stability, protect recent progress in human development, and bolster the non‑oil economy.\n  - Continued close engagement with the Fund and the international community is crucial to support the authorities’ efforts.\n  - Given precarious liquidity and uncertainty about exceptional receipts from an oil sector asset sale, authorities should elaborate a contingency plan to guide spending in case of a significant shortfall in fiscal receipts.\n  - Limit spending commitments strictly to available resources to avoid a breakdown in the expenditure chain and further accumulation of arrears.\n  - A comprehensive arrears clearance strategy, based on validation via an independent audit, is imperative.\n  - Need for a medium‑term fiscal strategy incorporating a sizable permanent adjustment while protecting vulnerable populations.\n  - Mobilize more non‑oil revenue by expanding the non‑oil revenue base, reducing tax exemptions, and strengthening tax and customs administrations.\n  - Continue strengthening public financial management, with focus on stricter spending controls and enhanced spending efficiency.\n  - Enhance oil revenue transparency for better budget preparation, execution, and accountability.\n  - Banking sector is vulnerable to fiscal deterioration despite high liquidity; close monitoring in coordination with relevant regional bodies is needed.\n  - Be mindful of possible crowding out of credit to the private sector when placing government securities with commercial banks.\n  - Use current challenges as an opportunity for bold structural reforms to diversify the economy, improve the business climate, foster financial inclusion, and achieve more inclusive growth.\n  - Directors looked forward to details of the authorities’ national development plan covering 2016–2020, especially in agriculture, human capital, governance, judiciary reform, and social protection."
    },
    {
      "heading": "Selected economic and financial indicators (2011–2016)",
      "content": "- Real economy (annual percentage changes, unless otherwise indicated):\n  - GDP at constant prices: 2011: 0.1; 2012: 8.9; 2013: 5.7; 2014: 6.9; 2015: 1.8; Prel. 2016: -1.1.\n  - Oil GDP: 2011: -0.3; 2012: -4.1; 2013: -7.2; 2014: 32.2; 2015: -4.8; 2016: …\n  - Non-oil GDP: 2011: 0.2; 2012: 11.6; 2013: 8.0; 2014: 7.1; 2015: -2.9; 2016: …\n- Oil prices:\n  - WEO (US$/barrel)1: 2011: 104.0; 2012: 105.0; 2013: 104.1; 2014: 96.2; 2015: 50.8; 2016: 42.9.\n  - Chadian price (US$/barrel)2: 2011: 97.7; 2012: 102.0; 2013: 103.9; 2014: 98.0; 2015: 43.4; 2016: 33.8.\n  - Oil production (in millions of barrels): 2011: 43.6; 2012: 41.2; 2013: 36.3; 2014: 38.5; 2015: 52.5; 2016: 49.7.\n- Exchange rate FCFA per US$ (period average): 2011: 471.4; 2012: 510.2; 2013: 493.9; 2014: 493.6; 2015: 591.2; 2016: …\n- Money and credit (changes as a percent of broad money stock at the beginning of period)3:\n  - Net foreign assets: 2011: 25.3; 2012: 14.8; 2013: -2.6; 2014: -1.8; 2015: -40.3; 2016: -10.2.\n  - Net domestic assets: 2011: -11.0; 2012: -1.3; 2013: 11.2; 2014: 28.2; 2015: 35.6; 2016: …\n  - Of which: net claims on central government: 2011: -18.8; 2012: -13.1; 2013: 10.0; 2014: 18.0; 2015: 31.6; 2016: 1.7.\n  - Of which: credit to private sector: 2011: 9.0; 2012: 12.9; 2013: 2.8; 2014: 17.3; 2015: 0.3; 2016: -2.7.\n  - Income velocity (non-oil GDP/broad money): 2011: 5.9; 2012: 5.6; 2013: 5.5; 2014: 4.8; 2015: 5.0; 2016: …\n- External sector (valued in CFA francs):\n  - Exports of goods and services, f.o.b.: 2011: 22.3; 2012: -8.6; 2013: 1.4; 2014: -34.1; 2015: -17.4; 2016: …\n  - Imports of goods and services, f.o.b.: 2011: 11.3; 2012: 3.8; 2013: -7.7; 2014: 9.9; 2015: -23.7; 2016: -12.3.\n  - Export volume: 2011: -2.8; 2012: -13.7; 2013: 27.6; 2014: -7.9; 2015: … \n  - Import volume: 2011: 4.6; 2012: 2.9; 2013: -5.4; 2014: 9.8; 2015: -21.2; 2016: -9.9.\n  - Terms of Trade: 2011: 18.3; 2012: -2.1; 2013: 8.5; 2014: -46.6; 2015: …\n  - Current account balance, including official transfers (in percent of GDP): 2011: -5.6; 2012: -8.7; 2013: -9.2; 2014: -9.0; 2015: -12.4; 2016: …\n  - External debt (in percent of GDP): 2011: 21.8; 2012: 20.1; 2013: 21.2; 2014: 29.2; 2015: 25.1; 2016: 23.9.\n- Government finance (in percent of non-oil GDP, unless otherwise indicated):\n  - Revenue and grants: 2011: 34.6; 2012: 35.0; 2013: 27.8; 2014: 23.3; 2015: 15.5; 2016: …\n  - Of which: non-oil revenue: 2011: 7.6; 2012: 8.1; 2013: 9.3; 2014: 9.5; 2015: 8.3; 2016: …\n  - Expenditure: 2011: 31.3; 2012: 34.4; 2013: 31.4; 2014: 29.6; 2015: 21.4; 2016: …\n  - Current expenditure: 2011: 17.9; 2012: 16.5; 2013: 17.7; 2014: 16.7; 2015: 14.1; 2016: 14.3.\n  - Capital expenditure: 2011: 13.3; 2012: 13.7; 2013: 7.3; 2014: 5.8; 2015: …\n  - Non-oil primary balance4 (commitment basis, excl. grants): 2011: -19.6; 2012: -20.1; 2013: -18.2; 2014: -16.3; 2015: -9.8; 2016: -7.0.\n  - Overall fiscal balance (incl. grants, commitment basis): 2011: 3.3; 2012: 0.7; 2013: -3.6; 2014: -6.3; 2015: -6.6; 2016: -4.6.\n  - Overall fiscal balance (incl. grants, cash basis): 2011: 0.6; 2012: 2.1; 2013: -4.5; 2014: -5.2; 2015: -5.8; 2016: …\n  - Total debt (in percent of GDP)5: 2011: 30.5; 2012: 28.8; 2013: 30.3; 2014: 39.2; 2015: 42.6; 2016: 45.0.\n  - Of which: domestic debt: 2011: 8.7; 2012: 9.1; 2013: 17.5; 2014: 21.1; 2015: …\n- Memorandum items:\n  - Nominal GDP (in billions of CFA francs): 2011: 5,736; 2012: 6,314; 2013: 6,397; 2014: 6,885; 2015: 6,444; 2016: 6,159.\n  - Of which: non-oil GDP (in billions of CFA francs): 2011: 4,108; 2012: 4,400; 2013: 4,661; 2014: 5,152; 2015: 5,153; 2016: 5,144.\n  - Nominal GDP (in billions of US$): 2011: 12.2; 2012: 12.4; 2013: 13.0; 2014: 13.9; 2015: 10.9; 2016: 10.4.\n  - (Additional memorandum values shown: 8.6; 9.4.)\n\nIMF Communications Department. Press Release No. 16/360. July 25, 2016.\n\n---\n\n\n References\n\n- PRESS CENTER\n- http://www.imf.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2016/07/25/21/37/pr16360-chad-imf-executive-board-concludes-2016-article-iv-consultation"
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    "Published: July 25, 2016",
    "Major exogenous shocks: lower oil prices and elevated regional insecurity have caused oil revenues to \"collapse to a fraction of their previous level\" and disrupted economic activity.",
    "Security threats caused economic disruption, reprioritization of spending to defense, hosting of refugees and internally displaced persons, and exacerbated the economic situation.",
    "Economic activity:",
    "Prices and inflation:",
    "Fiscal and public finance:",
    "Monetary and financial:",
    "External sector:",
    "Growth projections:",
    "External outlook:",
    "Directors welcomed authorities’ policy efforts, noting a substantial fiscal adjustment and progress on the structural front despite adverse external conditions.",
    "Directors emphasized that the collapse in oil revenue and elevated regional insecurity have seriously affected the macroeconomic situation and near‑term outlook.",
    "Core Board recommendations and concerns:",
    "Real economy (annual percentage changes, unless otherwise indicated):",
    "Oil prices:",
    "Exchange rate FCFA per US$ (period average): 2011: 471.4; 2012: 510.2; 2013: 493.9; 2014: 493.6; 2015: 591.2; 2016: …",
    "Money and credit (changes as a percent of broad money stock at the beginning of period)3:",
    "External sector (valued in CFA francs):",
    "Government finance (in percent of non-oil GDP, unless otherwise indicated):",
    "Memorandum items:",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.imf.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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