Explaining the WAEMU Growth Spurt : The Role of Financial Deepening and Macro Policy
Most countries of the West African Economic and Monetary Union (WAEMU) experienced a growth acceleration in 2011-17. This paper identifies the determinants of this growth by combining country-specific information with the results of a cross-country...
| Main Authors: | , |
|---|---|
| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/121941545063971962/Explaining-the-WAEMU-Growth-Spurt-The-Role-of-Financial-Deepening-and-Macro-Policy http://hdl.handle.net/10986/31077 |
| Summary: | Most countries of the West African
Economic and Monetary Union (WAEMU) experienced a growth
acceleration in 2011-17. This paper identifies the
determinants of this growth by combining country-specific
information with the results of a cross-country regression
model. Growth was characterized by capital accumulation and
driven by structural factors, including financial deepening
and infrastructure development. What sets WAEMU countries
apart from other African countries is the very sharp
increase in private sector credit supporting private
investment. This was facilitated by a prudent and
accommodative regional monetary policy and improved
financial regulation. Pro-cyclical fiscal policies supported
public infrastructure investment but led to a buildup of
public debt. Going forward, growth may lose some steam,
given the renewed policy emphasis on fiscal consolidation
and monetary tightening. |
|---|