Inflation trends in the first half of the year and outlook for 2024

Inflation downward trend continued throughout the first half of 2024, with an inflation rate of 5.7%, down 2 points compared to the first half of 2023. Inflation stood at an annual average of 5.7% at the end of June 2024. The main contributors to this surge in inflation were food prices and transport costs. The rise in food prices may be accounted for largely by higher prices for vegetables and cereals as well as breads and cereals. The rise in transport costs was mainly due to the increase in road passenger transport costs, particularly as a result of the adjustment in fuel prices at the pump. On average over the past twelve months, the prices of local products increased more significantly by 6.1% at the end of June 2024 compared to those of imported products which rose by 4.5%. For this first half of 2024, inflation resulted from a combination of national and international factors. Thus: At the national level, reduction in subsidies on hydrocarbon prices, combined with security constraints, especially in the North-West and South-West regions and certain localities in the Far-North, have probably caused disruptions in production circuits and consequently an increase in transaction costs. In addition, adverse climatic shocks, marked by longer than usual dry seasons, combined with inefficient agricultural practices, may have reduced the supply of food crops, contributing to higher food prices. At the international level, geopolitical tensions in the Middle East and Europe with the conflict between Russia and Ukraine, the lingering repercussions of the COVID-19 pandemic, as well as fluctuations in the exchange rate between the CFA franc and the US dollar (via the Euro) have also contributed to fuelling inflation. Changes in the prices of raw materials on international markets, such as oil and agricultural products, make imports more expensive, thereby increasing the prices of imported goods. Nevertheless, efforts have been made globally to control inflation, including by easing supply chain disruptions, reducing global commodity prices and transportation costs, and adopting restrictive monetary policies by many central banks. However, gradual monetary easing is already being observed in several countries.

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