Mali is classified as a heavily indebted poor country (HIPC) and, as such, it benefited from debt cancellation under the IMF's HIPC Initiative. The main challenges faced by the country are the fragile security situation, political instability, inadequate infrastructure, financial and governmental capacity constraints, commodity price volatility, and unfavourable weather conditions (drought). However, political instability could compromise access to financing. Over the next years, Mali is expected to implement a structural reform program aiming at improving public finances and debt management, while promoting economic diversification, energy infrastructure enhancement (electricity), and human capital improvement. Inflation reached an average of 8% over 2022 but is expected to ease in line with international prices and the tightening of monetary conditions by the Central Bank of West African States (3% and 2.5% in 20, respectively). The public debt is mostly external and concessional, and relies on international lenders (Coface). The debt-to-GDP ratio continued to increase, from an estimated 51.9% in 2021 to 55.9% in 2022, and is forecast to decrease only marginally to 55.8% this year and 55.3% in 2024 (IMF). As a result, the need to reduce the fiscal deficit and move closer to the 3% fiscal deficit limit set by the West African Economic and Monetary Union (WAEMU) has become increasingly pressing. In late 2022 and early 2023, Mali's government regional debt issuances experienced low subscription rates, possibly due to a tightening of the Central Bank of West African States (BCEAO) bank refinancing conditions. Furthermore, the absence of external financial aid, alongside stricter financing conditions resulting from global monetary policy changes, has led to a rise in funding costs while the available sources of funding have decreased. In 2022, the government fiscal deficit stood at approximately 5% of GDP, as a consequence of the swift growth in security spending, public wages, and interest expenses (these three factors account for almost 80% of fiscal revenues). According to the IMF, real GDP growth is projected to rebound to over 5% in 20 thanks to strong agricultural and gold output. ![]() ![]() Specifically, the economy faced a trade embargo with other ECOWAS nations, restricting all products except for essential primary goods. ![]() After contracting by 1.6% in 2020 as a consequence of the global economic slowdown caused by the Covid-19 pandemic, the GDP resumed its growth path in 2021 (+3.1%) but experienced a deceleration in its expansion in 2022 (at around +2.5%), due to sanctions imposed by both ECOWAS and WAEMU from January 9th to July 3rd. ĭespite major security concerns, Mali’s economy has enjoyed steady growth rates during these last years, supported by strong agricultural production (especially for cotton) and high gold prices. For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
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