At the 5th Edition of the Official Launch of Liberia Economic Update, the World Bank said in its report that poverty rate in Liberia has reduced as a result of the rebound in economic activity.
According to the report, poverty decreased to 59.7% in 2023, from a peak of 63%. The report identified higher food prices as a major driver of poverty in Liberia. The report covers three years.
The recent report represents an improvement in economic activities amid financial constraints in Liberia. It highlights that poverty reduction is due to economic resilience, along with proactive measures taken to bring stability to the Liberian financial sphere.
In the report, it is stated, “The reduction in the poverty rate is a testament to the robust economic strategies and interventions that have been implemented over the past three years.”
The report, which was presented on Thursday, September 12, at the Monrovia City Hall, indicates that even though the reduction in the poverty rate is positive, food prices continue to be a significant factor affecting poverty levels.
The update added that the global economic outlook remains moderate, while growth is expected to slow down in the upcoming years.
According to the report, for 2024, global growth is projected to slightly decrease to 2.4% from 2.6% in 2023, with a slight recovery anticipated in 2025.
This global trend is expected to influence Liberia’s economic conditions, particularly impacting commodity prices and export revenues.
“Slowing global demand will ease pressures on commodity prices, with implications for commodity exporters, including Liberia.
Further declines in the prices of iron ore and rubber could have implications for growth, fiscal revenues, and export earnings in Liberia; however, easing oil prices could be favorable for Liberia as a net oil importer. Global headline inflation is projected to moderate further over 2024-25, with core inflation slowing and commodity prices declining,” the report notes.
At the same time, the Liberian economy is projected to grow by 5.3% in 2024, buoyed by renewed investments in mining and ongoing reforms in crucial sectors such as energy, transportation, and financial services.
The report states: “The development of mining projects and infrastructure improvements is crucial for boosting investment and productivity across various sectors.”
The World Bank report also projected that a gradual decline in inflation is expected. Meanwhile, the report indicates that the Central Bank of Liberia (CBL) has implemented a firm monetary stance, which is anticipated to reduce headline inflation from 10.1% in 2023 to 7.7% in 2024, and further down to 5.4% by 2026.
It is expected that the fiscal deficit will be moderate, with an increase in total revenue and grants.
“Total revenue and grants are expected to increase in 2024 and beyond, reflecting an anticipated increase in domestic revenue by 1.0 percent of GDP to 15.5 percent in 2024 and an average of 16.5 percent in 2025-26 as the country replaces the current goods and services tax (GST) with a value-added tax (VAT), boosting tax revenues in the coming years,” the report concludes.
