Chad Economic Outlook
- Economic growth reached an estimated 4.1% in 2015, possibly falling to only 2.6% in 2016 due to the collapse in oil prices and a steep fall in export revenues.
- The need to maintain internal and external balances in 2016 makes budgetary consolidation indispensable in the face of numerous financial, social, security and humanitarian challenges.
- Among other things, work towards structural transformation of the economy is driven by an integrated development strategy in the urban centres, especially through planning, promoting decent housing and equitable access to social services.
The Chadian economy, which is particularly dependent on the oil industry, is likely to experience a serious slowdown in 2016. After reaching 6.3% in 2014, GDP growth could fall to 4.1% in 2015 and then to 2.6 % in 2016, mainly due to the collapse in oil prices on international markets. This sharp decline could result in a significant reduction in the level of public investment, particularly in the extractive sector, and lead to a fall in domestic demand in 2016 and 2017. Agriculture’s poor performance is likely to worsen the unfavourable economic situation. This important sector of the economy suffered from a lack of rainfall in 2015, resulting in a sharp decline in cereal production of around 12% according to government estimates. The Chadian state’s capacity to implement the public investment programmes in its economic policy is being severely challenged. The significant expenditure in 2015 on meeting the threats and violence of the terrorist sect Boko Haram and jihadist movements also affected the country’s economy. In 2015, the inflation rate could rise from the 1.7% recorded in 2014 to reach 4.0%, breaching the community standard of 3.0% for the Central African Economic and Monetary Community (CEMAC), before falling to 2.6% in 2016. The main causes are disturbances to the country’s supply chains and exports related to the security situation. Preserving the country’s economic gains, especially the benefits of achieving the Heavily Indebted Poor Countries (HIPC) target in late April 2015, makes prudent debt management essential now, given the current highly volatile oil prices.
The structural transformation of the country’s emerging economy – which remains one of the government’s major objectives – faces many obstacles, including the inefficient organisation of urban spaces. Better spatial inclusion would enable them to become effective centres of production and thereby contribute to job creation, strengthening the country’s social cohesion and the resilience of its economy.