IMF Executive Board Concludes 2023 Article IV Consultation with Mali
IMF News, May 26, 2023
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- Published: May 26, 2023
Economic performance and outlook
- Real GDP growth increased from 3.1 percent in 2021 to 3.7 percent in 2022.
- Growth is projected to rebound to over 5 percent in 2023 and 2024, assuming strong agricultural and gold output.
- Headline inflation reached 10 percent in 2022; projected to come down to 5 percent in 2023 and to 2 percent in 2024 as global energy and food prices decline.
- Mali’s economy remained resilient in 2022 despite elevated security and socio-political challenges, regional sanctions in the first half of 2022, and a high incidence of food insecurity.
Key risks to the outlook
- Worsening security situation.
- Potential election delays.
- Volatile international commodity prices.
- Tighter global financial conditions.
- Climate risks.
- Tightening of financing conditions due to lack of external budget support and higher global interest rates; regional market tightening poses additional financing risks.
Fiscal position and public debt
- Fiscal deficit was just under 5 percent of GDP in 2022, reflecting a rapid increase in security spending, public wages, and the interest bill.
- Lack of external budget support—halted after two coups d’état in 2020 and 2021 and unlikely to resume until after elections are held in 2024—contributes to tightening financing conditions.
- Public debt trajectory (percent of GDP):
- Public debt: 50.4 (2021), 52.5 (2022), 53.8 (2023), 54.6 (2024), 55.1 (2025), 55.2 (2026)
- External public debt: 28.3 (2021), 27.3 (2022), 25.6 (2023), 24.3 (2024), 24.0 (2025), 23.9 (2026)
- Domestic public debt: 22.0 (2021), 28.2 (2022), 30.4 (2023), 31.1 (2024), 31.3 (2025), (2026 value not listed)
- Debt service: 5.5 (2021), 6.5 (2022), 9.9 (2023), 10.2 (2024), 12.4 (2025), 13.2 (2026)
External sector
- Current account balance: -7.5 (2021), -6.9 (2022), -6.1 (2023), -5.5 (2024), -3.4 (2025), -3.7 (2026) (percent of GDP)
- Current account deficit improved slightly in 2022 to 6.9 percent of GDP from 7.5 percent in 2021, on account of higher gold exports and lower capital goods imports.
- In the medium term, the current account deficit is projected to fall to below 4 percent due to strong gold and agricultural exports.
- Terms of trade (deterioration -): -9.4 (2021), -22.0 (2022), 23.4 (2023), 1.5 (2024), 3.4 (2025), -0.4 (2026)
Monetary and credit indicators
- Credit to the government: 32.3 (2021), 77.7 (2022), 44.9 (2023), 21.3 (2024), 8.1 (2025), 3.3 (2026)
- Credit to the economy: 15.9 (2021), 14.9 (2022), 8.0 (2023), 7.4 (2024), 7.2 (2025)
- Broad money (M2): 17.0 (2021), 11.7 (2022)
Board conclusions and policy recommendations
- Executive Directors agreed with the thrust of the staff appraisal, noting resilience in 2022 but significant remaining challenges including a marked rise in public debt amid tighter financing conditions and downside risks to the outlook.
- Fiscal consolidation:
- Pursue an ambitious fiscal consolidation to reduce the deficit in the near term and bring it below 3 percent of GDP by 2025, while protecting growth-enhancing capital spending.
- Recommend greater domestic revenue mobilization, containing the rapidly rising public sector wage bill, and enhancing the efficiency and management of public spending.
- Social protection:
- Protect the most vulnerable amid rising poverty and food insecurity.
- Reprioritize social spending, strengthen the social safety net, and scale up targeted measures while phasing out untargeted subsidies.
- Governance, transparency, and institutions:
- Steadfast implementation of governance and other reforms to improve confidence, boost economic growth, and reduce poverty.
- Improve financial performance and transparency of state-owned enterprises.
- Address governance weaknesses and corruption, including by strengthening the asset declaration regime and improving transparency in public procurement and the mining industry.
- Improve the business environment, strengthen the AML/CFT framework, and reform the education and health systems to improve gender outcomes.
- Capacity development and external engagement:
- Directors underscored the importance of capacity development assistance and steps to reengage with international partners to support the reform agenda.
- Further and prompt engagement with the Fund, including through the Food Shock Window, could be beneficial.
- Climate resilience:
- Building resilience to climate change will be important.
Selected economic and financial indicators, 2021–26 (annual percentage change / percent of GDP where indicated)
- Real GDP (annual percent change): 3.1 (2021), 3.7 (2022), 5.0 (2023), 5.1 (2024), 5.3 (2025)
- Consumer price inflation (average): 3.8 (2021), 10.0 (2022), 2.8 (2023), 2.0 (2024)
- Central government finance and public debt (percent of GDP):
- Revenue: 20.8 (2021), 19.4 (2022), 19.9 (2023), 20.0 (2024), 20.2 (2025), 20.4 (2026)
- Total expenditure and net lending: 26.3 (2021), 24.6 (2022), 25.3 (2023), 25.2 (2024), 25.4 (2025), 25.0 (2026)
- Overall balance (accrual basis): -4.8 (2021), -4.3 (2022), -3.6 (2023), -3.0 (2024)
- Notes on public debt figures:
- Public debt refers to general government debt.
- Domestic public debt includes BCEAO statutory advances, government bonds, treasury bills, and other debts. From 2021 onwards includes SDR allocation in the amount of 1.3 percent of GDP on-lent from the BCEAO.
IMF Executive Board press release: Press Release No. 23/182, May 26, 2023.