APA – Dakar (Senegal) – During the first six months of 2023, the Senegalese economy grew by 4.1 percent, against 5.3 percent initially, according to the International Monetary Fund (IMF).
Unsurprisingly, the unrest in Senegal during the first half of this year had a serious impact on the economy, causing the country to lose 1.2 percentage points of growth. “The tense socio-political situation weighed on activity in the trade and services sectors during the first half of this year, leading to a downward revision of GDP growth forecasts from 5.3 percent to 4.1 percent,” said Edward Gemayel, head of a team from the International Monetary Fund (IMF), who was in Dakar on Thursday on a mission to the land of Teranga from 31 August to 7 September 2023.
The IMF delegation was in the Senegalese capital to take stock of recent economic developments, update growth and budget forecasts, and discuss the draft 2024 budget.
On the first subject of discussion, Mr. Gemayel reported that year-on-year inflation fell to 5.7 percent in July, but new inflationary pressures from certain basic food products (rice, onions, and sugar) have recently emerged, and the forecast for average inflation in 2023 has been revised upwards from 5 percent to 6.1 percent.
This rate remains relatively high compared with the average of 4 percent recorded over the last six months in the West African Economic and Monetary Union (UEMOA), of which Senegal is a member.
Although budget execution up to the end of June was broadly in line with program targets, the IMF believes that achieving the end-December program targets will require additional efforts in terms of revenue mobilization.
This unsatisfactory situation does not, however, affect the macroeconomic outlook, which “remains favorable,” stressed the IMF mission chief. According to him, real GDP growth in 2024 should reach 8.8 percent, boosted by the start-up of oil and gas production. Non-hydrocarbon growth is expected to rise to 6 percent.
He also indicated that the authorities are determined to pursue fiscal consolidation efforts in order to rebuild budget reserves and reduce the growing vulnerability of public debt. “To this end, the draft 2024 budget targets a budget deficit of 3.9 percent of GDP,” he revealed.
The IMF official also encouraged the authorities to rationalize tax exemptions and speed up the implementation of the medium-term revenue strategy (SRMT). Dakar must also take all the necessary measures to ensure the gradual elimination of energy subsidies (1 percent of GDP by 2024), as set out in the roadmap adopted last January, said Mr. Gemayel.
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