THE BURKINA FASO ECONOMY PROVED resilient in 2008 despite a difficult national and international
economic and financial climate. Prudent economic policy and pragmatic and targeted structural measures supported this outcome. GDP (Gross Domestic Product) growth for 2008 is estimated at 4.2 per cent – short of earlier forecasts for 4.7 per cent – but up from 3.6 per cent in 2007. The economy should continue to be resilient in 2009, with projected growth of 6 per cent and 4.2 per cent in 2010. Growth will be driven by two factors — a decline in raw material prices, which should lead to a drop in production costs and thus spur investment, and a significant shift of revenue to rural areas due to specific support measures for agricultural production and small producers.
Inflation rose sharply due to the steep rise in consumer prices, especially food costs, during the first
half of 2008. This occurred despite the suspension of customs duties and taxes on staple products. The inflation rate, near zero in 2007, rose to 9.3 per cent in 2008. Farm production support,
consisting of inputs for small producers, should help ease shortages in the domestic market in 2009 by
significantly increasing the supply of food-crops. At the same time, prices will be supported as efforts get underway to rebuild stocks in line with national food safety policy objectives. Inflation is expected to drop from 5.4 per cent in 2009 to 3.5 per cent in 2010.
Despite the growing strength of themining sector, the Burkina Faso economy is still structurally and
excessively dependent on cotton which remains the country’s main export earner. Steps must be taken to diversify production by supporting domestic processing so as to create added value and generate employment.