Senegal’s economy grew by 8.9% in Q3, marking its record growth rate fueled by the start of oil exports. The IMF predicts a 9.3% growth for the next year, with further boosts expected from gas exports in 2024. The government seeks to reduce its budget deficit to 3% of GDP by 2027, utilizing this growth to enhance public finances.
Senegal has experienced remarkable economic growth, with its gross domestic product (GDP) soaring by 8.9% in the third quarter, marking a significant period due to the commencement of oil exports. The International Monetary Fund anticipates a further GDP expansion of 9.3% for the upcoming year. Comparatively, the economy has seen a growth rate of 11.5% from the same period last year, as reported by the National Agency of Statistics and Demography.
This acceleration in growth is expected to be bolstered by the initiation of gas exports from BP Plc’s Greater Tortue Ahmeyim liquefied natural gas project, which is planned to commence in early next year, as stated by Cheikh Niane, the Secretary-General of the Energy, Petroleum and Mines Ministry. Mark Bohlund, a senior credit research analyst at REDD Intelligence, noted that while the first gas from this project may ignite further growth in the first quarter of 2025, a stabilization at a lower growth rate is anticipated thereafter.
The unprecedented economic growth presents Senegal with a critical opportunity to address its fiscal challenges, particularly as the nation confronts an estimated budget deficit exceeding 11% of GDP for this year. On the financial markets, Senegal’s dollar bonds reflected stability, with 2033 maturing notes rising by 0.2 cent to 80.12 cents on the dollar.
In conclusion, Senegal has achieved a remarkable economic surge driven by new oil exports, with projections for continued growth as gas exports near. The country aims to leverage this growth to improve its fiscal standing, targeting a reduction of its budget deficit significantly by 2027. This demonstrates a positive outlook for the West African nation amid challenges in public finance.
Original Source: www.energyconnects.com
