The International Monetary Fund (IMF) said on Monday that the Senegalese economy, which has been severely hit by COVID-19 pandemic, would grow by 5 percent in 2021 after shrinking by 0.7 percent this year.
IMF said Senegal’s 0.7 percent projected real GDP contraction this year reflects the larger-than-anticipated disruptions in economic activity stemming from the pandemic and strict containment measures.
“A gradual recovery started in May with the lifting of most COVID-19-related restrictions, followed by the reopening of borders in July,” Ms. Corinne Deléchat of the IMF said in a statement after concluding a virtual mission in Senegal.
The mission, from September 9-18, 2020, was to update macroeconomic projections, discuss 2020 budget execution and plans for the 2021 budget.
According to Deléchat, the projected 5 percent rebound in 2021, boosted in part by favorable prospects for agriculture, is “subject to significant downside risks, reflecting uncertainties around the speed of the global recovery and the evolution of the pandemic, which could continue to affect important sectors of the economy such as tourism, transport and hospitality.”
She said the IMF is seeing encouraging signs that Senegal is on a solid path to recovery but uncertainties remain.
“Senegal’s strong health response is showing encouraging signs with a steady decline in new COVID-19 cases and hospitalizations over the past four weeks.
“Budget execution through end-August 2020 was broadly satisfactory, and the objectives for the remainder of the year set in the revised 2020 budget remain within reach. Uncertainties related to the mobilization of programmed resources however remain.”
The IMF is now encouraging Senegalese authorities “to continue with their prudent approach in order to maintain the deficit at around 6 percent of GDP as envisaged in the 2020 revised budget,” Deléchat added.