A team from the International Monetary Fund (IMF), led by Mr. Edward Gemayel, conducted a mission during March 8-14, 2023, to take stock of recent economic developments, update macroeconomic projections, and discuss potential options for a new IMF-supported program. The team met with his excellency Prime Minister Amadou Ba; Mr. Mamadou Moustapha Ba, Minister of Finance and Budget; Ms. Oulimata Sarr, Minister of Economy, Planning and Cooperation; Mr. Ahmadou Al Aminou Lo, the National Director of the BCEAO, senior government officials, development partners, representatives of business community as well as civil society.
At the end of the mission, Mr. Gemayel issued the following statement:
“The Senegalese economy in 2022 experienced a sharper-than-anticipated slowdown, with real GDP growth now estimated at about 4 percent against 4.7 percent expected, reflecting a disappointing harvest season and a contraction in industrial production. Average inflation reached a multi-decade high of 9.7 percent, largely on account of food inflation.
“Fiscal revenues are estimated to have slightly underperformed, while current spending exceeded the target on the back of a higher public wage bill. Energy subsidies reached the record-level of CFAF 692 billion (4 percent of GDP) and to keep the fiscal deficit in check, investment spending was cut. Public debt is estimated at 75.0 percent of GDP, of which 67.5 percent of GDP for the central government, and the current account deficit significantly widened on account of higher imports and debt interest payment.
“For 2023, economic activity is projected to rebound, albeit at a slower pace than initially envisaged, while inflation will moderate to 5 percent. The medium-term outlook remains favorable and would benefit from both the start of oil and gas production and the implementation of structural reforms aimed at strengthening private sector participation in economic activity in the context of the phase 3 of the National Development Plan (PSE).
“Early signs of tighter financing conditions in the regional bond market call for vigilance and contingency planning. In that context, enhancing domestic revenue mobilization and streamlining nonpriority spending will help ease financing pressures, while preserving debt sustainability.
“Negotiations for a new IMF-supported program will begin on the sidelines of the IMF and WB Spring Meetings and will continue in Dakar in late April.
“The IMF team wishes to thank the Senegalese authorities and various stakeholders for their hospitality and constructive discussions.”
Distributed by APO Group on behalf of International Monetary Fund (IMF).