Senegal Achieves Record Economic Growth Driven by Oil Exports

Senegal’s economy surged 8.9% in Q3 due to oil exports, with an anticipated 9.3% growth in 2024. Growth may spike further with gas exports starting in early next year. Despite the robust growth outlook, the country faces a challenging budget deficit which it aims to reduce strategically by 2027.

Senegal has experienced remarkable economic growth, with a record 8.9% increase in its gross domestic product (GDP) during the third quarter of the year, following the commencement of oil exports. Year-on-year, the economy expanded by 11.5%, according to the National Agency of Statistics and Demography. The International Monetary Fund forecasts a 9.3% expansion for the country next year as it also prepares to initiate gas exports from the Greater Tortue Ahmeyim liquefied natural gas project, expected to begin early next year.

Analysts predict that the growth may receive an additional boost when gas exports begin, but they caution that economic growth may normalize to a lower rate subsequently. Mark Bohlund, a senior credit research analyst at REDD Intelligence, noted that one can expect “another growth spurt in the first quarter of 2025” from the gas project. However, he also suggests that growth rates might moderate afterward.

Senegal’s economic outlook appears robust, driven by new oil exports and forthcoming gas initiatives, with predictions of continuing growth in the coming years. However, significant budget deficits necessitate efforts to enhance public finances and reduce the deficit by 2027. The government’s focus on cutting expenditures and increasing tax revenues is critical for long-term economic stability.

Original Source: www.energyconnects.com