Economic Overview
For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
After registering a decade of strong growth, the Senegalese economy was impacted by the Covid-19 pandemic, but was amongst the minority of economies that managed to avoid recession. After rebounding in 2021, the economy was hit by the consequences of the war in Ukraine in 2022, the country being heavily dependent on external food and energy supplies. Amid weaker external demand, soaring food and energy prices, tightening financial conditions, and US dollar appreciation, GDP growth slowed to 4.7% in 2022, compared to 6.1% in 2021 (IMF). However, due to favorable oil and gas production prospects, GDP growth is expected to accelerate to 8.1% in 2023 and 10.4% in 2024 (IMF).
After a robust recovery from the crisis induced by the Covid-19 pandemic, in 2022 the Senegalese economy suffered from the negative spillovers on global growth and commodity prices from Russia’s war in Ukraine. Inflation soared to 7.5%, from 2.2% in 2021, and food insecurity increased (IMF). The authorities adopted support measures to tackle soaring cost of living, including untargeted energy subsidies. Initially planned at 1% in 2022 and then re-estimated at 3%, targeted cuts in levies (VAT, customs and fuel taxes) were implemented to mitigate the inflationary shock (Coface). Fiscal consolidation efforts were postponed, as fiscal deficit remained stable at -6.2% GDP (IMF). The authorities have committed to accelerate fiscal consolidation in 2023, raising selected electricity and fuel prices, in order to reduce budget deficit to -4.5% GDP (IMF). A further reduction of the budget deficit to -3% by 2025 is planned, in line with WAEMU commitments, through the phase out of energy subsidies and increased revenue mobilisation (IMF). Public debt increased from 73.2% GDP in 2021 to 77.3% GDP in 2022 ; and it is expected to reduce to 74.3% GDP in 2023 and 69.0% GDP in 2024 (IMF). As pointed out by the IMF, risks to debt sustainability will need to be carefully monitored. Inflation is forecast to decrease to 3.1% in 2023 and 2.0% in 2024 (IMF). After focusing on the response to external shocks, the authorities are now focused on implementing the revised Emerging Senegal Plan (PSE). The objective is to promote strong and inclusive private sector-led growth through structural transformation and diversification, with a new emphasis on accelerating the domestic production of critical supplies through sectorial policies (IMF). Increasing revenue mobilization, rebuilding fiscal buffers, putting public debt on a downward path, improving business environment, enhancing the social safety net, broadening access to quality education, addressing youth unemployment and tackling financial system weaknesses are the key challenges identified by the IMF.
According to the World Bank, if PSE reforms continue, the poor layer of the Senegalese population would progressively be able to access high growth or value-added sectors, such as horticulture or agricultural processing. Senegal is ranked 170th out of 191 countries in the human development index (UNDP). In 2021, the unemployment rate of the country was at 3.7% (World Bank, ILO estimate).
| Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
| GDP (billions USD) | 24.53 | 27.64 | 27.46 | 31.22 | 35.01 |
| GDP (Constant Prices, Annual % Change) | 1.3 | 6.1 | 4.7 | 8.3 | 10.6 |
| GDP per Capita (USD) | 1,465 | 1,607 | 1,554 | 1,719 | 1,876 |
| General Government Gross Debt (in % of GDP) | 69.2 | 73.2 | 75.0 | 73.1 | 69.9 |
| Inflation Rate (%) | 2.5 | 2.2 | 9.7 | 5.0 | 2.0 |
| Current Account (billions USD) | -2.67 | -3.76 | -4.39 | -3.25 | -1.60 |
| Current Account (in % of GDP) | -10.9 | -13.6 | -16.0 | -10.4 | -4.6 |
Source: IMF – World Economic Outlook Database , October 2021
Country Risk
See the country risk analysis provided by La Coface.
