The IMF forecasts growth of 7.1% for 2024 compared to 4.6% in 2023

The IMF forecasts growth of 7.1% for 2024 compared to 4.6% in 2023
The IMF forecasts growth of 7.1% for 2024 compared to 4.6% in 2023

A mission from the International Monetary Fund (IMF), led by Edward Gemayel, concluded a visit to Senegal, from April 25 to May 3, 2024, to assess economic progress and prepare the second review of the financial support program.

In 2023, Senegalese economic growth reached 4.6%, surpassing expectations in a context marked by political and external challenges, notably tensions linked to the presidential elections and various external shocks. This performance is mainly attributable to a successful agricultural campaign and the robustness of the tertiary sector. Inflation fell significantly, standing at 5.9%. To respond to increased spending on energy subsidies and interest on debt, the government reduced investment spending, thereby maintaining the budget deficit at 4.9 percent of GDP, in line with IMF targets.

However, the start of 2024 showed a slowdown in economic activity, mainly due to political uncertainties and a delay in the start of gas production, now scheduled for December 2024. Growth is projected at 7.1 % for 2024, down from the previous forecast of 8.3%. Central government debt increased to 73.4% of GDP, exceeding the WAEMU ceiling, and the current account deficit remains high at 18.8% of GDP.

The IMF notes that despite the difficulties, the program supported by the institution is generally on the right track, but emphasizes the need to take ambitious measures to rationalize spending and improve fiscal efficiency to achieve a deficit of 3.9% of GDP in 2024, with a target of 3% in 2025. Structural reforms, including the revision of the prices of petroleum products and an audit of the electricity company Senelec, are also recommended to ensure fairer pricing and support households vulnerable.

The Senegalese authorities reaffirmed their commitment to the objectives of the IMF program, aligned with their strategies of strengthening governance, reducing debt vulnerability, and promoting structural transformation and climate resilience of the economy .

The next review of the program is scheduled for June 2024, at which time the parties will discuss progress and adjust strategies necessary to continue supporting the Senegalese economy.

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