IMF upgrades economic prospects

An International Monetary Fund (IMF) mission, led by Mr. Hervé Joly, visited Senegal from October 5-19, 2011 to conduct the second review under the three-year Policy Support Instrument (PSI) arrangement approved in December 2010. The members of the mission met with the ministers of economy and finance, budget, international cooperation, infrastructure, and energy; representatives of the BCEAO; other senior government officials; and representatives of the private sector, civil society and development partners.

At the conclusion of the visit, the mission issued the following statement:

“After recovering in 2010, the Senegalese economy experienced a modest slowdown in early 2011 due to persistent power cuts. Assuming that recent improvements in the electricity sector continue, however, Senegal should post GDP growth of 4 percent in 2011. Inflation rose in early 2011, reflecting increasing international food and petroleum prices, but this trend reversed in the second half of the year and inflation is now expected to average 3.6 percent in 2011.

“Growth in 2012 is expected to be sustained by the significant increase in public investment in 2012, in particular with continued construction work on the toll road and implementation of the Plan Takkal. The restoration of a more reliable supply of electricity should also have a positive impact on other sectors of the economy. These domestic drivers of growth are expected to largely offset the anticipated weakening of external demand and a generally less promising external environment than expected. Overall GDP growth is expected to reach 4.4 percent in 2012 compared to 4 percent in 2011. Inflation should continue to decline, and remain well below 3 percent.