IMF Staff has concluded after the Fourth PSI Review visit to Senegal that the macroeconomic performance remained solid in 2016, with GDP growth above 6 percent for the second consecutive year.
The IMF staff also states that prudent fiscal policy is in line with WAEMU convergence criteria should also help safeguard the Union’s stability and that reaching the Plan Sénégal Emergent (PSE) objectives requires a faster pace of reform to promote private investment, including foreign investment.
“The outlook for 2017 remains favorable, with growth once again expected to exceed 6 percent. This will nevertheless require continued fiscal consolidation, strengthened public financial management and enhanced governance, improvements to the business climate, and measures to promote SMEs and social inclusiveness. The discussions between the authorities and the team focused on these particular points.
The team from the International Monetary Fund (IMF), led by Mr. Ali Mansoor, visited Dakar from March 30 through April 12, 2017, to engage in discussions as part of the fourth review of the three-year arrangement under the Policy Support Instrument (PSI) approved in June 2015.
“The macroeconomic performance remained solid in 2016, with GDP growth above 6 percent for the second consecutive year. Inflation remains low, owing to low international oil prices and an elevated supply of cereal products on the market. The external current account deficit improved due to higher exports and workers’ remittances.
“PSI program implementation continues to be satisfactory overall. All the quantitative criteria and indicative targets for end-December 2016 have been met. Tax revenue gains combined with a continued policy to streamline public consumption expenditure have helped contain the fiscal deficit within the target set by the program. Significant progress has also been made in meeting structural benchmarks.
The IMF team welcomes the authorities’ determination to continue pursuing an appropriate fiscal policy through the maintenance of their initial fiscal deficit target of CFAF 349 billion (3.7 percent of GDP) in 2017 to maintain the sustainability of public debt.