percent (4.6 percent per capita) contraction in 2020. The passing of President Deby led CHAD Key conditions and to economic disruptions in the second quarter of 2021 as the new authorities con- challenges solidated power. Workers' strikes led to the suspension of oil production on Esso Table 1 2021 Chad's economy has performed below po- plants (one-fourth of Chad's production), Population, million 16.9 tential since the 2014-15 oil price shock. driving a decline in oil production of 8.2 GDP, current US$ billion 11.4 Notwithstanding the 2018-19 recovery, an- percent over the year. Although the coun- GDP per capita, current US$ 672.8 nual GDP growth contracted by 1.1 per- try suffered from food insecurity, due part- a 33.2 International poverty rate ($1.9) cent on average over the past six years, ly to weak cereal production after poor a 66.4 which, given the rapidly growing popula- rains, agriculture remained the main non- Lower middle-income poverty rate ($3.2) a 87.9 tion, translated into an annual decrease in oil growth driver, contributing 1.9 percent- Upper middle-income poverty rate ($5.5) Gini index a 37.5 per capita income of 4.1 percent. Oil con- age points (pp), while services contracted School enrollment, primary (% gross) b 89.2 stitutes about 20 percent of GDP, 35 per- 4.4 pp. Export value increased by 55.3 per- b 54.2 cent of revenue, and 75 percent of exports. cent due to the increase in oil prices (66.4 Life expectancy at birth, years Chad ranked 187th out of 189 countries on percent), helping the current account Total GHG Emissions (mtCO2e) 118.2 the Human Development Index in 2020. deficit narrow from 7.8 percent of GDP to Source: WDI, Macro Poverty Outlook, and official data. Living conditions and access to essential 5.6 percent in 2021. a/ Most recent value (2018), 2011 PPPs. b/ Most recent WDI value (2019). services remain poor due to severe weath- As containment measures on domestic er conditions, cyclical insecurity, political supply chains were slowly lifted, inflation unrest, weak governance, including oil dropped from 3.5 percent to one percent in GDP contracted by 1.2 percent in 2021 revenues management, poor trade net- 2021. Food inflation was 3 percent, signifi- works, low human capital investment, and cantly lower than the rest of Sahel. Chad's (4.2 percent per capita) - the second con- a lack of infrastructure. monetary and exchange rate policies are secutive year of recession – due to a tem- Chad has not strengthened regional inte- managed by the regional Central Bank, porary suspension of oil production, so- gration, economic transformation, or ac- which supported regional reserve accumu- cio-political insecurity, and liquidity con- cess to electricity and digital technologies. lation by raising its policy rate to 3.5 per- Growing political and security expenses cent and the marginal lending facility rate straints. This situation likely increased and high levels of debt service relative to from 5 to 5.25 percent. As a result, regional extreme poverty by 2 percentage points. domestic revenue have constrained Chad's reserves increased to 3.4 months of im- Growing food and general insecurity, cli- ability to improve basic services and infra- ports from 3.1 months in 2020, thanks also matic shocks, and continued dependency structure delivery. to regional fiscal consolidation policies and on volatile oil revenues heightens the rising oil prices. Despite a significant increase in oil prices, risks to the fragile recovery during a sen- the fiscal deficit, excluding grants, stood at sitive political transition. Recent developments 6.7 percent of GDP (4.3 percent including grants) in 2021, due to the one-year lag in Chad's GDP contracted by 1.2 percent (4.2 the main component of oil-revenue taxa- percent per capita) in 2021, following a 1.6 tion as well as an increase in security and FIGURE 1 Chad / GDP growth, current account and fiscal FIGURE 2 Chad / Actual and projected poverty rates and balance real GDP per capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 6 100 450000 4 90 400000 2 80 350000 0 70 300000 60 -2 250000 50 -4 200000 40 -6 150000 30 -8 20 100000 10 50000 -10 2019 2020 2021 2022 2023 2024 0 0 Fiscal balance (% of GDP) 2011 2013 2015 2017 2019 2021 2023 Current account balance (% of GDP) International poverty rate Lower middle-income pov. rate Real GDP growth Upper middle-income pov. rate Real GDP pc Source: World Bank Source: World Bank. Notes: see Table 2. MPO 19 Apr 22 political transition spending. Total public grow by 2.8 percent in 2022 (-0.2 percent and lack of structural economic transfor- debt slightly increased while debt ser- per capita). The positive outlook for the mation will limit the space for poverty vices remained too high; the Government oil sector, services, and agriculture should reduction. The social protection system has requested a debt restructuring under strengthen over the medium-term, with should be strengthened to extend its cov- the G20 Common Framework to help re- growth averaging 3.7 percent per annum. erage and better target the poorest and store debt sustainability. Higher global energy and food prices due most vulnerable. The extreme poverty rate (US$1.9/ day per to the Russia-Ukraine war is projected to This outlook is subject to high uncertainty capita, 2011 PPP) is projected to have in- increase inflation in 2022. and multiple downside risks, including in- creased by more than 2 pp between 2020 The current account balance is projected to creased political instability during a transi- and 2021, reaching 37.8 percent, with the become positive, at 0.9 percent of GDP on tion period, intensified security risks, fur- number of extremely poor increasing from average over 2022-24, driven by increased ther climate-related shocks, continuing 5.8 to 6.2 million. The COVID-19 crisis fur- activity in the oil and services sectors. The food security challenges, uncontrolled lo- ther impacted the livelihoods of poor and fiscal balance is expected to stand at 1.2 cal COVID outbreaks, and widespread so- vulnerable households. In high-frequency percent of GDP in 2022 and further im- cial discontent from food and general inse- phone surveys in 2021, 76 percent of prove in 2023-24 due to significant increas- curity. At least one of these risks will like- households reported a loss in their total es in oil revenues, more controlled security ly materialize, and concurrent shocks are a household income and 21 percent of spending and less political transition-relat- possibility. The economic consequences of households seeking health care could not ed expenditures. However, Chad will still the Russia-Ukraine war would primarily get access to it. need a significant debt restructuring to ser- be through higher global food (grains/fer- vice its debts while increasing social and tilizer) and energy prices. The projections investment spending needs, and to reduce already reflect recent sharp increases in oil oil price volatility risk. and gas, agriculture and metal and miner- Outlook The extreme poverty rate is expected to al prices since January 2022. Chad should increase to 38 percent in 2022 due to neg- benefit from higher global oil prices and Based on current projections for oil ative GDP per capita growth. The num- direct this benefit towards inclusive prices, the global recovery, and the Gov- ber of poor will likely increase to 6.4 mil- growth to reduce poverty. ernment’s gradual fiscal consolidation lion. Continued high food inflation, low program, the economy is expected to coverage of social protection programs, TABLE 2 Chad / Macro poverty outlook indicators (annual percent change unless indicated otherwise) 2019 2020 2021e 2022f 2023f 2024f Real GDP growth, at constant market prices 3.2 -1.6 -1.2 2.8 3.5 3.9 Private Consumption 1.4 0.5 1.6 2.8 2.9 3.3 Government Consumption 1.7 11.1 3.7 3.7 0.2 0.0 Gross Fixed Capital Investment 6.6 -14.7 -4.5 0.7 5.3 7.2 Exports, Goods and Services 6.0 1.1 -0.4 3.9 4.6 3.7 Imports, Goods and Services 4.0 1.8 5.1 3.5 4.0 3.0 Real GDP growth, at constant factor prices 3.3 -1.6 -1.2 2.8 3.5 3.9 Agriculture 0.1 3.9 6.2 5.0 4.3 4.3 Industry 7.3 -0.1 -4.6 1.3 2.8 1.6 Services 2.5 -7.0 -4.4 2.1 3.3 5.6 Inflation (Consumer Price Index) -1.0 3.5 1.0 3.5 3.0 3.0 Current Account Balance (% of GDP) -4.9 -7.8 -6.0 3.6 1.4 -2.1 Fiscal Balance (% of GDP) -0.6 1.2 -4.3 1.2 3.2 3.1 Debt (% of GDP) 51.1 49.9 52.1 51.6 53.2 47.6 Primary Balance (% of GDP) 1.0 2.9 -2.7 2.8 4.8 4.7 a,b International poverty rate ($1.9 in 2011 PPP) 33.1 35.5 37.8 37.9 37.6 36.9 a,b Lower middle-income poverty rate ($3.2 in 2011 PPP) 66.4 68.2 70.1 70.2 69.9 69.3 a,b Upper middle-income poverty rate ($5.5 in 2011 PPP) 87.9 88.9 89.9 89.9 89.8 89.5 GHG emissions growth (mtCO2e) 3.8 4.0 4.2 4.2 4.2 4.2 Energy related GHG emissions (% of total) 1.6 1.5 1.5 1.5 1.5 1.4 Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD. a/ Calculations based on 2018-EHCVM.Actual data: 2018. Nowcast: 2019-2021. Forecasts are from 2022 to 2024. b/ Projection using neutral distribution (2018) with pass-through = 0.7 based on GDP per capita in constant LCU. MPO 20 Apr 22