São Paulo – Mauritania’s economy should end 2014 with growth and inflation rate under control and fiscal performance within the estimated budget target. According to a press release disclosed by the International Monetary Fund (IMF) this Friday (31st), the country should also show growth in the next few years. Mauritania, however, could be in a better situation if iron ore prices were higher.
The IMF evaluation was disclosed after a team from the institution met with local authorities on Wednesday (29th) and Thursday (30th) in the country’s capital, Nouakchott. According to the Fund, Mauritania’s Gross Domestic Product (GDP) should grow by 6.4% this year and the inflation rate should end 2014 with a 3.5% hike. The current account deficit should decline and end the year at around 19% of the GDP.
The press release reads that Mauritania’s trade with other countries is at a “slow pace”, but acknowledges the outlook is positive. The document also reads that, over the medium term, the country’s economic growth should average at 7% per annum, hinging on strong investment linked to expanding mining capacity and infrastructure projects.
The IMF says risks to the economy stem from local instability and eventual iron ore price reductions. “Lower iron ore prices could also negatively impact investment plans in Mauritania,” the Fund warns.
This Friday, iron ore price stood at US$ 80.08, according to information from the CME Group. Estimated future price shows depreciation, with the commodity selling at US$ 76 for contracts maturing in October 2015. A year ago, the product was sold at US$ 130 per metric tonne.
In a communiqué released by the Fund’s technicians after the meetings, the head of the mission, Mercedes Vera Martin, said a favourable economic outlook will help the country support fiscal consolidation efforts and spending cuts, directing capital towards poverty reduction and building frameworks to help the nation withstand international crises.
*Translated by Rodrigo Mendonça
