IMF: Republic of Congo's economic recovery remains elusive in 2021

Measures taken to contain the pandemic and the ensuing oil price collapse aggravated by the impact of lower oil prices and production impacted the Congolese economy in 2020 resulting to an 8.2 per cent economic contraction in 2020. Thomas Alun, IMF Representative, Congo joins CNBC Africa for more.

Mon, 02 Aug 2021 10:08:42 GMT

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AI Generated Summary

The Republic of Congo faced an 8% GDP contraction in 2020 due to a combination of COVID-19 impacts and low oil prices.
The IMF was unable to provide financial support to the Republic of Congo due to high debt levels, highlighting the importance of debt sustainability in accessing IMF funding.
Despite economic challenges, the Republic of Congo is making efforts to stabilize the economy, renegotiate debt agreements, and improve non-oil sectors, with optimism for future growth prospects.

The Republic of Congo has faced significant economic challenges in recent years, exacerbated by low oil prices since 2015 and high levels of debt. The arrival of the COVID-19 pandemic in 2020 further impacted the country's economy, leading to an 8% contraction in GDP. Thomas Alon, the IMF's country representative for the Republic of Congo, emphasized the detrimental effects of the pandemic and low oil prices on the country's economic performance in a recent interview with CNBC Africa. Alon pointed out that the combination of COVID-19 restrictions, low oil prices, and reduced oil production contributed to the economic decline in 2020. The situation further worsened as the IMF was unable to provide financial support to the Republic of Congo due to its high levels of debt. Alon highlighted the importance of debt sustainability in accessing IMF funding, noting that without a sustainable debt level, the IMF cannot provide financial assistance. Despite the challenges faced by the country, Alon expressed optimism about the Republic of Congo's economic prospects, citing improvements in non-oil sectors and efforts to address debt sustainability. The IMF representative commended the country's authorities for their efforts to renegotiate debt agreements and stabilize the economy. Alon also highlighted the rebound in oil prices, which have risen from $20 per barrel in 2020 to $75-$76 per barrel, providing a more sustainable economic outlook. Looking ahead, Alon suggested that stability in non-oil sectors, ongoing debt management efforts, and potential funding from the IMF and other agencies could support higher economic growth in the future. Despite the current projections of flat output for 2021, Alon remained hopeful for increased growth in the coming years, especially with the potential return of IMF funds by the end of the year. The Republic of Congo's economic recovery remains a key focus for the IMF, with a keen interest in supporting the country's efforts to overcome economic challenges and achieve sustainable growth.