The October 2024 World Bank’s economic overview on Liberia has indicated that headline inflation rose to 10.1% in 2023, up from 7.6% in 2022, and this rise was primarily due to food prices, exchange rate depreciation, and monetization of the budget deficit.
The report also said Inflationary pressures began to ease in 2024 and are expected to remain within single digits in the medium term if the authorities maintain prudent fiscal and monetary policies. The World Bank further stated that Liberia’s savings and investments gap widened during 2023, leading to a current account deficit (CAD) of 26.4% of GDP.
“Liberia’s fiscal deficit increased by 1.5%age points to 7.1% of GDP in 2023 due to a decline in revenues and grants and increased consumption spending. In the medium term, the fiscal deficit is expected to decrease as the authorities enhance domestic resource mobilization and bolster expenditure controls.
Liberia is at moderate risk of external debt distress and high risk of overall debt distress. The country’s debt-to-GDP ratio stood at 58.8% of GDP in 2023,” the report said.
The report also indicated that growth in 2023 was primarily driven by mining, expansion in gold output, and construction while the services sector grew by 3.7%, driven by the financial and hospitality subsectors, increased trade and transport activities, and improved access to electricity.
The updated report for October stated, “Output in the agriculture sector grew by a modest 1.4%, reflecting declines in palm oil and rubber production. On the demand side, continued recovery in private consumption, increased public-sector spending, and a surge in gold exports were the main drivers of growth.
Growth is expected to remain robust, averaging 5.8% over the medium term supported by renewed interest and investments in mining coupled with continued implementation of critical reforms in key enabling sectors such as energy, transportation, trade, and financial services.”
