Macroeconomic Performance
Table 1: Overview of some macroeconomic indicators
Mali’s economy accelerated to a growth of 4.5 per cent in 2023 from 3.5 per cent in 2022, driven mostly by private consumption as inflationary pressures eased. It is worth noting that growth was constrained by the power supply shortages that occurred during the third quarter of the year. Average inflation declined markedly to 2.1 per cent in 2023 from 9.7 per cent in 2022, bolstered by declining food and energy prices. Fiscal balance eased marginally to -4.8 per cent of GDP in 2023 from -4.9 per cent of GDP in 2022, while public debt inched up marginally to 53.0 per cent of GDP from 52.9 per cent in 2022. The current account balance worsened to -9.0 per cent of GDP in 2023 from -8.0 per cent in 2022.
Outlook
Economic activity in the country is projected to slow to a growth of 4.1 per cent in 2024, given the persistence of the electricity supply challenges. Growth is projected to increase slightly to 4.6 per cent in 2025 under the assumption that the country reneges on its decision to exit ECOWAS. Inflation will continue to decline in 2024 (1.7%) before rising to 2.0 per cent in 2025. The debt-to-GDP ratio will increase consistently to 55.1 per cent of GDP in 2024 and further to 55.7 per cent in 2025. The slow growth in the debt-to-GDP ratio is partly a result of a projected narrowing of the fiscal balance from -4.2 per cent of GDP in 2024 to -3.6 per cent in 2025. The current account balance is projected to improve to -5.8 per cent of GDP in 2024 and further to -4.7 per cent in 2025.
Probable Headwinds
Climate change poses a significant downside risk to the growth in agriculture just as much as the insecurity in the country, given that insurgents still control large swathes of land in the country. Political risks remain, given the ruling military junta’s decision to ban all political party activities in a move which is seen as the leadership perpetuating their stay in power. Electricity supply challenges remain a significant threat to industrial and services sector activities, while the decision to leave ECOWAS, if actioned, will have devastating impacts on the growth in economic activity and poverty eradication.