Domestic demand recorded an increase of 5.4% in the fourth quarter of 2024, contributing significantly to overall economic growth, according to the High Commission for Planning (HCP). This dynamic brought the contribution of domestic demand to economic growth to 6.2 points, reveals the latest economic update from the HCP.
Household consumption increased by 3.2% year-on-year, adding 2 points to GDP growth. Despite the impact of the drought on rural incomes, several factors supported the purchasing power of households: the general stabilization of prices (except for certain food products), the increase in salaries in the public sector, social transfers and the resumption of consumer credit. This trend has favored an increase in imports of finished consumer products, in particular a notable increase in imports of motor vehicles (+58.1% at the end of 2024).
Public administrations also saw their consumption grow by 3.9%, slightly above the 3.8% recorded in the previous quarter. This increase reflects an increase in administrative operating expenses.
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Investments: a key driver of growth
Investment maintained robust momentum, recording an increase of 9.8% year-on-year, contributing 3.5 points to economic growth. This performance was supported by an intensification of public investments, particularly in hydraulic projects and infrastructure in view of the 2025 African Cup of Nations and the 2030 World Cup.
-Private investment, on the other hand, has adapted to the moderation of exports. The overall increase in investment was corroborated by an increase in foreign direct investment and an increase in imports of industrial capital goods.
Increased deficit and financing needs
Strong domestic demand, however, led to a significant increase in the economy’s external financing needs, reaching -3.8% of GDP in the third quarter of 2024. Although private savings experienced an improvement, the strength of investments contributed to a worsening of the budget deficit and an increase in corporate debt.
These results confirm the central role of domestic demand in the country’s economic growth, while highlighting the challenges linked to medium-term financial sustainability.
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