São Paulo – Mauritania’s economy is expected to continue to be strong and growth is projected to accelerate 6.7% in 2019, almost two times more than the 3.6% in 2018, according to numbers made public this Tuesday (21) by the International Monetary Fund (IMF). These data come from a report based on the third review of the arrangement the body has with the Arab country, which includes a loan of USD 159.8 million in exchange of reforms.
The program aims at entrenching Mauritania’s economic stability, supporting inclusive and job-creating growth, and building international reserve buffers. According to IMF, the Arab country’s authorities plan to use the prospective fiscal space for priority social spending–education, health, and social protection–and public infrastructure.
“Macroeconomic stability has been maintained, external debt-to-GDP declined, official reserves increased, and some fiscal space has been created,” said IMF deputy managing director and acting chair Mitsuhiro Furusawa. According to him, structural reform progressed as planned in Mauritania.
Projected growth for this year will be supported by continued broad-based non-extractive growth reflecting strong domestic demand and nascent diversification. The country is also developing a large offshore gas field. “Nevertheless, downside risks related to global economic developments, commodity price volatility, adverse weather, and regional security concerns remain elevated,” said Furusawa.
IMF wants the country to entrench its macroeconomic stability due to an uncertain global environment. It recommends continued policy discipline accompanied by broad-based structural reforms, including strengthening tax policy and administration to ensure tax compliance and reforming budget processes to improve the effectiveness of public spending. IMF also suggests modernizing the foreign exchange policy framework and increasing exchange rate flexibility to help address external shocks.
The three-year IMF arrangement with Mauritania was approved on December 2017. Completed on Monday (20), its third review allows the country to draw mor USD 22.8 million, bringing total disbursements to USD 91.3 million.
Translated by Guilherme Miranda
