(MENAFN- Brazil-Arab News Agency (ANBA)) São Paulo – Mauritania's gross domestic product is expected to grow by 4.2% this year, marking a slowdown compared to last year, when the North African Arab country's economy expanded by 6.3%. The forecast appears in a report by the IMF, released last Friday (7) following revisions to the financing agreements the financial institution maintains with Mauritania.

The head of the IMF mission that visited the country from October 28 to November 7, Felix Fischer, said that despite the continued solid performance, the slowdown is due to a contraction in both the extractive and non-extractive sectors. However, according to Fischer, the medium-term outlook remains positive, assuming further reforms are implemented to diversify the economy and boost non-extractive growth.

“Inflation in 2025 is expected to remain below 2 percent thanks to prudent macroeconomic policies and central bank's continued absorption of any excess liquidity,” he said. He also mentioned the country's lower-than-expected fiscal deficit by the end of September and the progress made in structural reforms.

However, the Fund emphasizes the need to institutionalize the fiscal rule in law, to continue the transition toward a flexible exchange rate regime to protect the economy from shocks, and to ensure an optimal design for new tax measures by assessing their impacts beforehand. It also suggests, among other actions, a plan to address the recommendations of the Court of Audits's audit report.

According to the IMF, Mauritanian authorities and the IMF team reached a staff-level agreement on the policies required for the completion of the fifth review of the economic program under the Extended Fund Facility (EFF) and the Extended Credit Facility (ECF), as well as the fourth review of the Resilience and Sustainability Facility (RSF). The IMF urges the country to accelerate reforms under this latter program in order to strengthen its resilience to climate change.

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Translated by Guilherme Miranda

©Antoine Lorgnier/Only World/Only France/AFP

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