The Togolese economy is beginning 2025 on a positive note. As per the latest Monthly Statistics Bulletin, industrial output remains strong, services and trade are both on the rise, and inflation is under control. However, underlying signals suggest that fine-tuning of economic policies may be necessary in the upcoming months.
A thriving industrial sector
The industrial sector in Togo continues to gain traction. In January 2025, the industrial production index rose by 10.5%, following an 11.0% increase in December 2024. While this does not indicate a significant slowdown, it serves as a reminder that growth needs to be sustained. The dynamism in industrial activities could potentially be bolstered in the coming years by the PIA, which is attracting new investments and enhancing local industrialization, especially in the processing of agricultural products.
Merchant services reflect a similar trend, with turnover increasing by 3.4% in January. Although this is less than the 5.0% growth from the previous month, the overall trajectory remains positive. The trade sector exhibits the same pattern, experiencing a 1.2% rise after a 4.8% increase in December. Whether this is simply a post-holiday adjustment or an indicator requiring attention remains to be seen.
Inflation remains stable, confidence among businesses holds firm
There are no imminent threats on the price front. With annual inflation at 2.5%, Togo is within the BCEAO’s target range of 1% to 3%. This trend is indicative of a broader price stabilization movement following previous surges: inflation, which peaked at 7.6% in 2022, has gradually decreased to 3.3% in 2024 and is projected to settle at 2.3% in 2025, according to financial institutions. This balance is significantly influenced by declining prices of certain imported food items like rice (-13.8%) and sugar (-14.1%). Conversely, prices of oil (+43.3%) and milk (+26.8%) continue to rise, potentially impacting purchasing power.
In terms of business atmosphere, conditions remain stable. The business climate index stands steady at 100.7, indicating that economic participants feel neither overly optimistic nor excessively anxious. For the government, this signals a positive development, but also a reminder to maintain momentum.
Business leaders begin the year with optimism. The business climate index remains at 100.7, reflecting a steady economic environment where the private sector continues to invest and expand, despite existing economic challenges.
Promising economic outlook
The International Monetary Fund (IMF) projects a 5.3% economic growth for 2025, which, while slightly lower than the 5.6% observed in 2023, is still robust. This momentum is expected to be strengthened by public infrastructure investments, growth in the industrial sector, and a more disciplined fiscal policy.
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Nonetheless, the necessity for cautious economic management persists, as the country must balance maintaining growth, keeping inflation in check, and managing public debt.
