Senegal’s economic growth is forecast to slow to 2.5% this year from 6.7% in 2025 due to declining hydrocarbon production, the country’s Economy Ministry said this Wednesday.
The West African nation has faced economic challenges since the discovery of $13 billion in hidden debt attributed to the previous administration.
It has relied heavily on the regional debt market to meet its funding needs since last year due to the misreporting case that has closed off funding from the International Monetary Fund and other financiers.
An economic outlook document released by the economy ministry said that while the public debt-to-gross domestic product (GDP) ratio is expected to decline from 121.3% in 2024 to 116.2% in 2025, the overall risk of sovereign debt stress remains high in the medium term.
It said the budget deficit declined to 6.2% of gross domestic product in 2025 from 13.7% the previous year, driven mainly by deep cuts in public spending.
The deficit is expected to narrow further to about 5.4% of GDP in 2026, as new tax measures under a government recovery programme and rising hydrocarbon revenues help offset a planned rebound in public investment.
The deficit is expected to return to the West African regional ceiling of 3% of GDP in 2027.
–Reuters–
