Economic Outline

Economic Indicators

Amidst a challenging environment, the Congolese economy demonstrates resilience, albeit with a slight dip in growth anticipated for 2023 compared to initial forecasts. With heavy reliance on the mining sector and limited diversification, the DRC remains vulnerable to shifts in global commodity prices, leading to notable impacts on public finances during periods of price decline. Throughout 2023, public finances faced considerable strain, leading to a deterioration in the budget situation and an acceleration of inflation. The overall GDP growth was estimated at 6.7% in 2023 (from 8.9% one year earlier, IMF). Despite an anticipated slowdown in growth in 2024 due to the conflict in the eastern region of the country, economic expansion is expected to remain robust (4.7%, IMF), supported by the production and exports of copper and cobalt.

The moderate public deficit in 2023 saw a slight increase due to election and security expenditures, as well as lower revenues stemming from cobalt price declines and reduced taxes on windfall profits. These factors have impeded fiscal consolidation efforts outlined in the IMF's three-year USD 1.5 billion Extended Credit Facility, set to expire in mid-2024. The 2024 budget will prioritize spending by discontinuing fuel subsidies for the mining sector and settling arrears to suppliers, while election-related spending will cease. However, public sector salaries, notably for the army, and rising military and security expenses will continue to strain spending. Large mining revenues, buoyed by a mining price resurgence, are expected to help stabilize the deficit. Additionally, in January 2024, the country renegotiated a 2008 contract with China for copper and cobalt mine exploitation, increasing the initial promised amount from USD 3 billion to USD 7 billion. The surplus will be channeled into infrastructure projects, primarily roads, over the next two decades (Coface). The public debt-to-GDP ratio was estimated at 13.3% in 2023 by the IMF, with a downward trajectory expected over the forecast horizon (9.1% by 2025). In 2023, double-digit inflation surged due to elevated food prices and currency depreciation (estimated at 19.1% by the IMF). However, the weakening of the Congolese franc is expected to be less severe in 2024, partly due to the rebound in mineral prices, which will bolster reserves to over 2.5 months of imports and curb inflation. Additionally, the effects of monetary tightening, although partial, will influence prices following the Central Bank of Congo's significant increase in its key rate from 11% to 25% in October 2023.

The DRC is one of the poorest countries in the world, with around 62% of the population living in extreme poverty (World Bank, 2022). It is among the lowest-ranked in the human development index and violence is frequent, especially in the east of the country. According to the latest data from the World Bank, in 2022, the unemployment rate in the country stood at 4.5% - a slight decrease from the previous year, when that rate was 4.7%. However, among the employed share of the population, a high percentage of workers have informal jobs. The country’s GDP per capita was estimated at USD 1,337 in 2022 by the World Bank, one of the lowest in the world.

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