(Updates with comment from ministry official in second paragraph.)
Sept. 13 (Bloomberg) -- Senegal’s economy will expand 4 percent this year and 4.4 percent in 2012 as electricity production improves and investments are made in infrastructure, according to the country’s Finance Ministry.
Growth “remains solid” even as the projections are “exposed to major risks,” Pierre Ndiaye, director of the ministry’s division for projections and economic studies, told reporters in Dakar, the capital, today. He cited concern that a debt crisis in Europe could weaken demand for Senegalese exports and cut remittances from emigrants.
Senegal, which saw violent protests against frequent power cuts in June, plans to raise 650 billion CFA francs ($1.35 billion) to end the crisis by 2014, le Soleil newspaper reported in April, citing Karim Wade, the minister of energy. Power plants with the capacity to produce as much as 1,288 megawatts are being planned, the newspaper reported Aug. 23.
A $460 million airport may open next year in Dakar and funds from the $540 million Millennium Challenge Corp., a U.S. government aid program, will be spent on roads and farmland, said Djibril Dione, head of macroeconomic projections at the ministry.
The country needs faster growth, around 6 percent or 7 percent annually, said Valeria Fichera, the International Monetary Fund’s resident representative. “Growth on the level of 4 percent is not what Senegal needs right now,” she told reporters today, declining to give details.
Inflation for this year is forecast at 3.3 percent before slowing to 2.7 percent in 2012, the ministry said in a statement today. The country’s budget deficit will reach 6.9 percent of gross domestic product this year before narrowing to 5.6 percent in 2012, according to the statement.
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