Economic analysis published by Fitch Solutions indicates that Senegalese growth will slow in 2022 and rebound vigorously in 2023. From around 6.0% in 2021, real GDP growth will reach 5.5% in 2022.

Fitch Solutions believes that fixed investment will not be enough to offset the negative impact of rising inflation and the freeze on trade between Senegal and Mali. The latest data available from the National Agency for Statistics and Demography show that Senegal's real GDP growth slowed from 10.6% year-on-year in Q321 to 7.1% in Q421. This is mainly due to a decrease in primary sector activity and less favourable base effects (growth rose from 2.9% in Q320 to 5.1% in Q420).

“We expect real GDP growth to slow in 2022 overall, as inflation remains high and Community trade sanctions remain high Economic States of West Africa (ECOWAS) versus Mali have a negative impact on Senegal's exports. In 2023, we expect economic growth to accelerate to 9.3% due to an increase in oil production,” the agency said.

Rising living costs will erode real disposable incomes and limit consumers' purchasing power, which in turn will limit private consumption. Senegal's exports will be capped in 2022, and net exports will subtract 2.3 pp from GDP growth (compared to our previous forecast of a subtraction of 0.7 pp).