Abstract
In 2011, the economy of Mali is expected to stay on a robust growth trajectory with low inflation. Fiscal performance has been consistent with program targets during the first half of 2011. Money supply increased more than GDP during the first nine months of 2011. The authorities intend to continue the ongoing economic and financial reforms in cooperation with the IMF. Initiation of the new Extended Credit Facility program will coincide with the launch of the third growth and poverty reduction strategy (G-PRSP III) for 2012–17.
1. This statement provides information that has become available since the issuance of the staff report on November 28, 2011. The new information does not alter the thrust of the staff appraisal.
2. Inflation increased by 4.1 percent year-on-year in November owing to food prices, and by 2.7 percent on average for the 12-month period ending in November 2011.
3. Preliminary estimates indicate that all the indicative targets were met at end-September with one exception. The indicative floor on priority spending was missed by 0.4 percent of GDP due to the overall under-execution of public spending.
4. Seasonal rainfall has been much less favorable than expected in some parts of the country and harvests are likely to be significantly lower than usual. As a consequence, food security issues are emerging, potentially affecting about 3 million people. The authorities are taking emergency measures to provide food to regions at risk, in close cooperation with donors. The estimated budgetary cost of the measures that were not included in the 2011 budget is about CFA 5 billion ($11 million or 0.1 percent of GDP) and will be financed by reallocating resources from under-executed non-priority spending. For 2012, the authorities are currently estimating the full cost of emergency measures needed to ensure food security for people at risk. They plan to request donors’ financial support. This weather shock is likely to have a sizeable impact on growth and inflation in 2012; a full assessment and any revision of the program will be addressed on the occasion of the first review of the arrangement.