Economic Outline

Economic Indicators

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. It remained resilient though, avoiding recession and continuing to expand at an estimated 1.5% (IMF). Recovery started mid-2020, driven by industrial production and the services sector, and GDP growth rebounded to 4.7% in 2021 (IMF). Economic growth is expected to accelerate in 2022 (5.5%) and 2023 (10.8%), boosted by construction, gold mining and oil and gas production (IMF). However, new Covid-19 outbreaks, regional security issues and fiscal pressures are downside risks.

The Senegalese economy started a robust recovery in 2021, supported by exceptional spending aiming to contain the negative impacts of the Covid-19 pandemic. Measures were also taken to strengthen social protection and the health sector including domestic vaccine production, and energy subsidies were increased. As a result, fiscal deficit soared from 3.8% GDP in 2019 to 6.3% GDP in 2020 and 2021. With the implementation of key structural reforms and fiscal consolidation, it is expected to reduce to 4% GDP in 2022 and to stabilize at around 3% GDP by 2024, in line with WAEMU commitments (IMF). Public debt continued its ascending trend, reaching an estimated 71.9% GDP in 2021. It is expected to gradually decline to 70.1% GDP in 2022 and 64.5% GDP in 2023 (IMF). As pointed out by the IMF, risks to debt sustainability will need to be carefully monitored. Inflation reached an estimated 2.4% in 2021, driven by an increase in food prices, and is expected to decline progressively to 2% in 2022 and 1.5% in 2023, well below the WAEMU’s standard of 3%. After focusing on the health response and immediate economic support, 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, containing energy subsidies, 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 has been ranked 168th in the human development index. In 2020, the unemployment rate of the country was at 7.1% (ILO Estimate). The urban population working in the informal sector was particularly hit by the pandemic, with about 85% of households reporting declining incomes (IMF).

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