The West African Central Bank (BCEAO) raised its key interest rates by 25 basis points. Regional inflation is estimated at 6.2% this year, but decelerated to 3.2% in 2023 due to increased agricultural production.

Regional GDP growth is expected to be 5.9% this year, 7.2% in 2023, but risks are on the downside. According to the Bank's press release, the minimum bid rate for liquidity auctions has been raised to 2.25% from 2.00%, and the marginal lending rate has been raised to 4.25% from 4.00%. Banks' minimum reserve ratio remained unchanged at 3.00%. The committee last changed the rates in June 2020 when they were reduced by 50 basis points in response to the COVID-19 crisis.

Regional GDP growth slowed slightly to 5.6% in the first quarter, compared to 5.7% year-on-year in the fourth quarter of 2021, but remained strong, driven by growth in domestic demand. The MPC forecasts 5.9% growth for 2022, revised downwards from 6.1% forecast in March. For 2023, growth is estimated at 7.2% with downside risks over the outlook. Regional inflation accelerated further to 6.4% year-on-year in Q1 2022, compared to 5.0% year-on-year in Q4 2021, mainly due to higher food and fuel prices.