Statement by an IMF Staff Mission to
Press Release No. 09/175
the Republic of Mali
May 19, 2009
A mission from the International Monetary Fund (IMF) headed by Mr. Xavier Maret visited Bamako from May 5 to May 19. The mission met with Prime Minister Modibo Sidibé, Minister of Economy and Finance Sanoussi Touré, National Director for Mali of the Central Bank of the Western African States Tatam Ly, and other ministers and senior government officials. The purpose of the mission was to conduct the second review of the government’s economic program that is supported by the IMF Poverty Reduction and Growth Facility (PRGF). The mission issued the following statement today in Bamako:
“Despite the oil and food crisis, economic performance under the PRGF program was satisfactory in 2008. Economic growth reached 5.2 percent, mainly reflecting the impact of favorable climatic conditions on agricultural production. Annual inflation increased sharply as a result of the spike in world oil and food prices, but has since declined steadily to 3 percent in April 2009. Prudent budget management limited the basic fiscal deficit (revenue less expenditure, excluding foreign-financed investment projects) to 1.2 percent of GDP.
“Although the world crisis is yet to have a significant negative impact on Mali, the economy remains vulnerable to new external shocks. The balance of payments in 2009-10 is projected to strengthen as a result of a sharp improvement of the terms of trade. Buoyant world prices of gold (80 percent of exports) and the fall of international food and oil prices will reduce the external current account deficit, despite a projected decline in remittances and tourism receipts. The external sector remains, however, vulnerable to a reversal of the terms of trade gains, a larger drop of remittances, and a decline in external aid.
“The mission reached understandings on a set of revised macroeconomic policies and structural reforms for the remainder of 2009. The government’s revised program seeks to achieve steady economic growth, a further decline in inflation, and a slight increase in international reserves. Some loosening of the fiscal stance will aim at supporting the economy in the context of the world economic slowdown. The increase of the basic budget deficit to 1½ percent of GDP will be accompanied by a reduction of pending government payments and additional support to the agricultural sector. The mission highlighted the need to give new momentum to the structural reform program, particularly in the areas of public financial management and the cotton and banking sector.
“The completion of the second review of Mali’s PRGF arrangement and the related disbursement of SDR 2 million (CFAF 1.5 billion) will be considered by the IMF Executive Board in July.”