CHAD

Key conditions andchallenges

Table 1

2023

Population, million

18.3GDP, current US$ billion

13.2

GDP per capita, current US$722.4

International poverty rate ($2.15)

a30.8
a62.8

a88.8

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a37.4

School enrollment, primary (% gross)

b90.4

b52.5

Total GHG emissions (mtCO2e)

121.1

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2022), 2017 PPPs.
b/ WDI for School enrollment (2022); Life expectancy(2021).

Chad’s economy has proven resilient despite the war in neighboring Sudan. GDP
growth in 2023 is estimated at 4.1 percent (1 percent per capita), supported byhigher oil production and public investment. Improved agricultural production
eased inflation to 4.1 percent. While thepoverty rate has declined, 5.5 million people still live in extreme poverty. Downside risks include uncertainty from thepolitical transition, regional instability,insecurity, and climate shocks.

Chad’s economic growth has been volatile andweak, reflecting the lack of economic diversification and dependence on the oil sector, which
accountsfor85percentofexportsand56percent
of fiscal revenues. Chad is also among theworld’s most vulnerable countries to climatechange.Insufficientrainsandfrequentflooding
have often had adverse impacts on the agricultural sector, the main sector of employment,
which, together with conflict and displacement, has led to chronic food insecurity.
Security remains precarious with threatsby Boko Haram in the Lake Chad region,
the armed FACT rebellion in the north, andescalating inter-community tensions. According to UNHCR, Chad was hostingnearly one million forcibly displaced persons at the end of 2022, including 593,000
refugees and nearly 400,000 IDPs. Since
April 15, 2023, the war in Sudan has caused
a mass influx of Sudanese refugees and Chadian returnees to eastern Chad. The numberof new arrivals was estimated at around496,834 at end-December 2023. In addition
to the humanitarian challenges, the war in
Sudan has induced higher expenditures(mostly military) and shortages of goods.

Recent developments
Despite the ongoing humanitarian crisis
triggered by the war in Sudan, Chad’s

economy is poised for its strongest, albeit
still modest, performance since 2014, withan estimated GDP growth of 4.1 percent(1 percent per capita) in 2023. This
growth is underpinned by oil production,
which is expected to rise by 4.4 percent.
Non-oil GDP is estimated to grow 4.1
percent (up from 2 percent the previousyear) driven by public investment. After
recovering from the 2022 floods, the agricultural sector is estimated to contribute
1.6 percentage points (ppts) to growth,followed by the services (1.4 ppts) andindustry (1 ppt) sectors. Investment, primarily government-driven, is the main
growth driver on the demand side, contributing 7 ppts to growth. In contrast,
private investment is expected to havefallen due to increased interest rates andcrowding out effects. The boom in public
investment (+195.9 percent) led to a sharp
increase in domestic demand (+9.5 percent). This in turn increased imports,
along with other imports for humanitarian-related operations in support of theSudanese refugees, and by significantly
more than exports (imports +16 percent
vs. exports +2.9 percent), resulting in acurrent account deficit of 2.4 percent of
GDP in 2023.
Inflation eased to 4.1 percent in 2023, owing to the base effect of high inflation in
2022 and the deceleration in food inflation(4.8 percent) because of improved agricultural production. Food insecurity remains
a significant problem despite these improvements, with around 2.1 million people, or 11.5 percent of the population, facing severe food insecurity as of December
2023. The extreme poverty rate is expected

FIGURE 1 Chad / GDP growth, current account, and fiscal
balance

FIGURE 2 Chad / Actual and projected poverty rates andreal GDP per capita

Percent of GDP
654
32
10-1-2-3-4-5-6-7
2021
2022
Fiscal balanceReal GDP growth

Poverty rate (%)

Real GDP per capita (constant LCU)

100

4500009040000080

35000070

30000060

250000502000004015000030
20100000

10

50000

0

2023

2024
2025
2026
Current account balance

02011

2013

2015

2017

2019

International poverty rate
Upper middle-income pov. rate

Source: World Bank.

Source: World Bank. Notes: see Table 2.

MPO

1

Apr 242021

2023

2025

Lower middle-income pov. rate
Real GDP pc

to decrease by 1 ppts to 29.9 percent in2023; however, about 30 percent of thepopulation (5.5 million people) continue
living in extreme poverty.
The Bank of Central African States (BEAC)
maintained its tight monetary policy
stance during 2023 to contain inflationarypressures and support the external viability of the exchange rate arrangement. TheBEAC policy rate was maintained at five
percent following a cumulative increase by
175 basis points between November 2021
and March 2023.
Chad maintained a fiscal surplus of 1.3
percent of GDP in 2023, equivalent to a
non-oil fiscal deficit of 15.8 percent, andfalling from a 5 percent of GDP fiscal surplus in 2022. Despite high growth in tax
revenues, supported by tax administration
digitalization measures, and a peak in oilrevenue, the fiscal surplus declined, reflecting the sharp rise in public investment.
Total public debt is estimated to decline to44.8 percent of GDP in 2023, compared to47.4 percent in 2022.

OutlookIn 2024, growth is projected to decelerate
to 2.7 percent (-0.4 percent per capita) due
to an expected decline in oil productionand expectations of lower public investment, compared to 2023 levels. During2025-2026, growth is projected to average
3.1 percent (0.1 percent per capita), as newoil fields are brought onstream. Non-oil
GDP growth is projected at around 3.5 percent over 2024-2026. Government measures addressing food insecurity shouldease food inflation, with inflation projected
to fall to 3.9 percent in 2024 as a result, before averaging 3.3 percent over 2025-2026.
With few linkages to poor and vulnerable
populations, oil-sector driven growth is
not expected to lead to poverty reduction
without significant structural reforms.
Moreover, continued security restrictions,
low social protection coverage, and theongoing Sudan crisis will restrict poverty

TABLE 2 Chad / Macro poverty outlook indicators

reduction. Extreme poverty is projected
to increase by 0.5 ppt in 2024, equivalent
to an additional 263,671 people falling into extreme poverty.
Reflecting lower oil prices and still elevated levels of government expenditures, thefiscal balance is projected to turn into a1.4 percent of GDP deficit in 2024, remaining in deficit through to 2026. Public debt
to GDP is projected to decline to 41.6 percent in 2025 and stabilize in the medium
term. The current account deficit is expected to further deteriorate to 3 percent ofGDP in 2024, and average 3.1 percent over2025-2026, driven by moderating oil prices.
The outlook is subject to multiple downside risks, including lower oil prices, political instability during the upcoming elections, heightened insecurity, and climate
shocks. A prolonged Sudan war could
worsen the humanitarian crisis, strain public finances, and increase inflationary pressures. Moreover, an escalation of tensions
between Chad and Sudan could lead toconsiderable security concerns.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
-1.2
1.6
3.7
-4.3
-0.4
5.1

2022
2.8
2.7
-1.5
-6.1
5.0
2.0

2023e
4.1
1.9
1.1
62.8
2.9
16.0

2024f2.7
3.6
0.4
-17.2
3.8
-3.1

2025f
3.3
3.2
3.0
-2.1
4.1
2.0

2026f
2.9
2.3
3.1
-0.4
4.2
2.1

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

-1.2
6.2
-4.6
-4.3

2.8
2.0
4.1
2.3

4.1
5.0
3.3
4.1

2.8
3.1
1.1
3.9

3.3
3.4
2.0
4.4

2.9
3.3
1.7
3.5

Inflation (consumer price index)
Current account balance (% of GDP)

1.0
-6.0

5.8
2.9

4.1
-2.4

3.9
-3.0

3.6
-3.3

3.0
-2.8

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-2.2
16.3
52.1
-0.6

5.0
23.5
47.4
6.5

1.3
27.1
44.8
3.0

-1.4
22.3
42.3
-0.5

-1.2
22.6
41.6
-0.3

-2.1
21.8
41.9
-1.2

..
..
..

30.8
62.8
88.8

29.9
61.6
87.8

30.4
62.4
88.4

30.8
62.9
88.7

30.9
63.1
88.7

2.0
1.2

2.1
1.2

2.0
1.2

2.1
1.2

2.0
1.2

1.9
1.2

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2022-EHCVM. Actual data: 2022. Nowcast: 2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.

MPO

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