Economic Outline

Economic Indicators

Mauritania's GDP growth is considerably exposed to fluctuations in global mineral commodity prices given the large share of extractive industries in the country's economy. After contracting by 0.9% in 2020 following the outbreak of the global COVID-19 pandemic, the economy rebounded by an estimated 2.4% in 2021. The estimated real GDP growth moderated to 3.4% in 2023, down from 6.4% in 2022. This decline can be attributed to a significant contraction in public investment and a slowdown in exports, driven by reduced industrial production. The medium-term outlook appears generally positive, although it remains vulnerable to potential risks. Growth is projected to average 4.9% over the period from 2024 to 2026. This growth will be underpinned by several factors, including the commencement of gas production in the latter half of 2024, sustained levels of private consumption and investment as prices rebound to pre-crisis levels, increased exports, and the execution of the government's public investment program (World Bank).

Concerning public finances, in 2023, the overall fiscal deficit improved to 2.4% of GDP, a notable improvement from 3.7% of GDP recorded in 2022, primarily attributed to a decrease in capital expenditure. However, the debt-to-GDP ratio saw a slight increase to 48.1% in 2023, marking a 0.8 percentage point rise, mainly due to the depreciation of the exchange rate towards the end of 2023. Despite this increase, a joint Debt Sustainability Assessment conducted by the IMF and World Bank indicates that external debt remains sustainable, with a moderate risk of debt distress. In 2023, the current account deficit showed improvement, decreasing to 10% of GDP from 16.6% of GDP in 2022. This improvement can be attributed to reduced imports of capital goods in the extractive industry, oil, and food products. Moving forward, fiscal pressures are expected to alleviate, resulting in an average budget deficit of 2% of GDP in 2024. This improvement will be supported by revenue from gas, reduced current transfers, and increased tax revenue mobilization. By 2026, the fiscal deficit is forecasted to narrow even further to 0.2% of GDP. Additionally, debt levels are anticipated to gradually decrease, reaching 47.7% of GDP by 2024 (World Bank). Average inflation has halved from its peak of 9.5% in 2022 to 5% in 2023. It is anticipated to continue decreasing to 2.5% in 2024, attributed to a reduction in external pressures.

Overall, the government will need to modernize the country and support education and industrial diversification to limit its dependence on raw materials price fluctuations (iron, copper, gold, quartz, cattle, and fish). To this extent, authorities have elaborated an inclusive growth strategy for the period 2017-30, planning structural reforms and significant investment in infrastructure. The three pillars of this investment strategy are inclusive economic growth, human capital development, and governance improvement. The country's unemployment rate was estimated at 10.8% in 2022 (from 11.3% one year earlier), with around 31.8% of the population living in poverty (World Bank, latest data available). Mauritania is considered a lower-middle-income country, with a GDP per capita (PPP) estimated at USD 6,295 in 2022 by the World Bank.

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