Consumer spending in Cameroon drives economic growth despite inflation- INS 

CAMEROON – According to a report by the National Institute of Statistics (INS), consumer spending increased by 1.7% in the last quarter of 2023, contributing to a 1.5% increase in quarterly GDP despite price increases across sectors compared to 1.3% in the previous year. 

The report revealed an 11% increase in transport costs and an 8.5% increase in food prices contributed to a 6.4% increase in the consumer price index. 

These cost dynamics put pressure on households in 2023, undermining purchasing power and overall capacity for final consumption. 

It also significantly affected the food retail and service industry as fewer Cameroonians went out to eat.  

However, despite these inflation challenges, the country experienced a 2% increase in the private component of final consumption. 

A surge in demand for beverage products, telecommunication services, forestry, and textile products primarily causes this increase.  

However, inflation caused a demand slip in various sectors- grain products, manufacturing, and industrial chemicals. 

The government has also faced challenges in managing inflation and public investments that have spilled over to the food and beverage sector. 

The National Committee for Monitoring the Physical and Financial Execution of the PIB (Public Investment Budget) revealed that the PIB achieved 63.5% execution in 2023, an 11% decline from 2022. 

The PIB sources funds from donors and tax collections to foster economic growth and expansion of various sectors. 

Through the PIB, the Cameroonian government incentivizes cocoa farmers to produce high-quality cocoa via the National Cocoa and Coffee Office (ONCC) through premium bonus payments. 

However, high inflation and pressures from the private sector have impeded the success of such initiatives. It has caused a push-pull effect between the government’s initiatives and the need for market stabilization. 

Early this year, the government dismissed a proposal by stakeholders in the beverage industry to increase beer prices due to inflation.  

The report predicts inflation to be around 7% by the end of the year, which is expected to cause a reduction in commodity prices. 

A balance between market self-adjustment and government investment is key for the effective implementation of strategies that would improve the economy across all sectors. 

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