The International Monetary Fund (IMF) has downgraded Senegal’s 2020 economic growth forecast to 1.1% from 6.8% in January amid COVID-19 economic fallout.
The IMF forecast for Senegal has now gone from 6.8% in January to 3% in April and now 1.1%.
The IMF said the Senegalese economy has taken a hit from COVID-19 pandemic, border closures, a curfew, and social distancing.
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“The GDP growth rate is projected at 1.1 percent for 2020 compared to 5.3 percent in 2019. These forecasts are based on the control of the spread of the pandemic, the implementation of measures to support the economy, and a gradual recovery of economic activity during the second half of 2020. The forecasts are nonetheless subject to major downside risks,” the IMF said in a statement in Washington DC on Sunday.
The downgrade came after a staff team from the IMF, led by Ms. Corinne Deléchat, conducted a virtual mission in Senegal from June 2-12, 2020.
The mission engaged in discussions as part of the first review of the IMF’s Policy Coordination Instrument (PCI) approved in January 2020.
Ms. Deléchat said the IMF team reached staff-level agreement with the Senegalese authorities on economic and financial policies that could support approval of the first review of their three-year program under the PCI.
The IMF Executive Board could consider the first review in the second half of July 2020.
“To mitigate the effects of the crisis attributable to COVID-19, the government has set up an economic and social resilience program to strengthen the health system and to support households, the Senegalese diaspora, as well as firms and their employees.
“In April 2020, the IMF disbursed US$442 million (100 percent of Senegal’s quota), i.e., about CFAF 263 billion or approximately 2 percent of GDP under the Rapid Financing Instrument (RFI) and the Rapid Credit Facility (RCF), thus providing immediate liquidity to support the government in its implementation of the national COVID-19 response plan (plan de riposte),” Ms. Deléchat said, adding that “the performance of the PCI-supported program is satisfactory.”
“At end-December 2019, all quantitative targets under the program, except for one on the share of single-sourced public tenders, were met, and significant progress was achieved in attaining the reform objectives for end-June. In particular, Fund staff welcome the finalization of the medium-term revenue mobilization strategy, whose implementation in the second half of 2020 will support economic revitalization measures.”