Cameroon Economic Update, June 2024

Investment Rating - The report does not explicitly provide an investment rating for the forestry sector in Cameroon Core Insights - The report highlights the interplay between fiscal policies and forestry sector challenges, emphasizing the need for fiscal reforms to enhance public revenues and promote sustainable forestry management [9][17][24] Chapter Summaries Chapter 1 – The State of the Economy - Global economic activity slowed to 2.6 percent in 2023, down from 3.0 percent in 2022, primarily due to tighter monetary policies and reduced fiscal support in advanced economies [9][44] - Cameroon's real GDP growth decelerated to 3.3 percent in 2023 from 3.6 percent in 2022, with all economic sectors experiencing a slowdown [10][55] - Average inflation rose to 7.4 percent in 2023 from 6.3 percent in 2022, driven by high food prices and transportation costs [13][79] - The current account deficit widened to 4.0 percent of GDP in 2023 from 3.5 percent in 2022, largely due to a larger trade deficit from declining hydrocarbon production [14][13] Chapter 2 – Designing Fiscal Instruments for Sustainable Forests - Cameroon has vast forested areas covering about 35 percent of its land, which are crucial for biodiversity and climate regulation [17][18] - The forestry sector's contribution to GDP has decreased slightly, accounting for 3.8 percent of GDP and 12.2 percent of exports by 2021 [19] - The annual deforestation rate increased from 0.1 percent to 0.6 percent between 2008 and 2020, driven by small-scale agriculture and illegal logging [18][19] - Fiscal reforms are necessary to optimize forest resources and secure higher public revenues, with forest-related fiscal policy instruments being essential for conservation and management strategies [24][25] - Recommendations include adjusting forest tax rates based on ecological impacts, promoting forest certification, and engaging local communities in REDD+ projects [28][29][30]