{"id":480275,"date":"2024-11-03T22:09:52","date_gmt":"2024-11-03T22:09:52","guid":{"rendered":"https:\/\/www.kapitalafrik.com\/?p=480275"},"modified":"2024-11-03T23:26:03","modified_gmt":"2024-11-03T23:26:03","slug":"the-imfs-impossible-projections-for-in%ef%ac%82ation-in-senegal","status":"publish","type":"post","link":"https:\/\/www.financialafrik.com\/en\/2024\/11\/03\/the-imfs-impossible-projections-for-in%ef%ac%82ation-in-senegal\/","title":{"rendered":"[Tribune] The IMF\u2019s impossible projections for in\ufb02ation in Senegal"},"content":{"rendered":"<div class=\"pdfprnt-buttons pdfprnt-buttons-post pdfprnt-top-bottom-left\"><\/div>\n<p class=\"wp-block-paragraph\">By *<strong>Ndongo Samba Sylla<\/strong> and *<strong>Peter Doyle<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The International Monetary Fund (IMF) recently launched its <em>World Economic Outlook <\/em>(WEO) in Washington with great fanfare. Owing to this institution\u2019s major in\ufb02uence over the formulation of public policy in most countries worldwide, it is important to exercise vigilance regarding the quality of its analysis.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For, as we all know, the lives of billions of people are a\ufb00ected by the IMF programs and the policy conditionalities and prescriptions attached to them. IMF analytical errors can therefore have devastating consequences.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In Senegal, the IMF is back in the spotlight thanks to current debates on the country&#8217;s public \ufb01nances. A new program is currently being negotiated with the Senegalese authorities.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In this short piece, we would like to draw attention to gross errors in the IMF&#8217;s projections for Senegal, notably those relating to in\ufb02ation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As can be seen from the WEO database, the IMF projects an<em> average <\/em>in\ufb02ation rate of around 2 % each year between 2025 and 2029. These estimates are broadly in line with the April 2024 vintage of the WEO (See Figure 1), though they may be optimistic for the 2024-2026 period, given the expected reduction in energy subsidies. So far, so good.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, the latest IMF projections for end-of-period in\ufb02ation are simply not possible. The October 2024 WEO projects end-of period (or 12-month consumer price in\ufb02ation) of -13.4 % in 2025 and 41.9 % in 2026 (See Figure 2).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There is simply no logical or factual basis for such projections. They even contradict the IMF\u2019s own projections for average annual in\ufb02ation for the years 2025 and 2026. The only time the end-of-period in\ufb02ation reached more than 20 % was in 1994, the year when the CFA franc was devalued by 50 % vis-a-vis the French Franc. End-of-period in\ufb02ation stood at 37.5 % in that extraordinary year (See Figure 3). And even then, the prior end-of period in\ufb02ation rate, for 1993, was certainly not a negative number above 10 percent.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Such blatant errors on the part of the IMF for Senegal, in its most recent and high pro\ufb01le analysis, are a matter of major concern if, as is often the case, they are the tip of the iceberg in terms of errors elsewhere in the IMF projections in which those numbers are embedded.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In that case, there is evident risk of inappropriate conditionality being forced on Senegal.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And this is no theoretical risk. Errors in conditionality consequent on numerical miscalculations by the IMF have been seen recently elsewhere in IMF programs in Africa, including in the latest IMF program review for Kenya. There, not only are the IMF end-of period in\ufb02ation projections for 2024 also simply not possible, but in addition, their projections for public debt fail to reconcile the \ufb01scal \ufb02ows (borrowing) with the \ufb01scal stocks (debt) data.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is essential, as a matter of respect for sovereign nations if nothing else, that the IMF ensures that its projections meet the highest professional standards. In the case of those for in\ufb02ation in Senegal, right now, this requirement is simply\u2014and obviously\u2014not being met.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img fetchpriority=\"high\" decoding=\"async\" width=\"600\" height=\"330\" src=\"https:\/\/www.kapitalafrik.com\/wp-content\/uploads\/2024\/11\/figure1-600x330.png\" alt=\"\" class=\"wp-image-480276\" srcset=\"https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/figure1-600x330.png 600w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/figure1-300x165.png 300w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/figure1-768x422.png 768w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/figure1-150x82.png 150w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/figure1-450x247.png 450w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/figure1-1200x659.png 1200w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/figure1-605x332.png 605w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/figure1.png 1274w\" sizes=\"(max-width: 600px) 100vw, 600px\" \/><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"600\" height=\"327\" src=\"https:\/\/www.kapitalafrik.com\/wp-content\/uploads\/2024\/11\/figure-2-600x327.png\" alt=\"\" class=\"wp-image-480277\" srcset=\"https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/figure-2-600x327.png 600w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/figure-2-300x164.png 300w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/figure-2-768x419.png 768w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/figure-2-150x82.png 150w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/figure-2-450x246.png 450w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/figure-2-1200x655.png 1200w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/figure-2-605x330.png 605w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/figure-2.png 1338w\" sizes=\"(max-width: 600px) 100vw, 600px\" \/><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"600\" height=\"313\" src=\"https:\/\/www.kapitalafrik.com\/wp-content\/uploads\/2024\/11\/Figure-3-600x313.png\" alt=\"\" class=\"wp-image-480278\" srcset=\"https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/Figure-3-600x313.png 600w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/Figure-3-300x157.png 300w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/Figure-3-768x401.png 768w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/Figure-3-150x78.png 150w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/Figure-3-450x235.png 450w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/Figure-3-1200x627.png 1200w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/Figure-3-605x316.png 605w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2024\/11\/Figure-3.png 1340w\" sizes=\"(max-width: 600px) 100vw, 600px\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-right wp-block-paragraph\">*<strong>Ndongo Samba Sylla,<\/strong><br> Senegalese Economist at the International Development Economics Associates (IDEAs)<\/p>\n\n\n\n<p class=\"has-text-align-right wp-block-paragraph\">*<strong>Peter Doyle, <\/strong><br>American Economist, former IMF and Bank of England.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n<div class=\"pdfprnt-buttons pdfprnt-buttons-post pdfprnt-top-bottom-left\"><\/div>","protected":false},"excerpt":{"rendered":"<p>By *Ndongo Samba Sylla and *Peter Doyle The International Monetary Fund (IMF) recently launched its World Economic Outlook (WEO) in Washington with great fanfare. Owing to this institution\u2019s major in\ufb02uence over the formulation of public policy in most countries worldwide, it is important to exercise vigilance regarding the quality of its analysis. For, as we<\/p>\n","protected":false},"author":536766,"featured_media":480279,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"aside","meta":{"pmpro_default_level":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"translated_post_url_fr":"","_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[16412,12591],"tags":[12100,16099,16465,21461],"class_list":["post-480275","post","type-post","status-publish","format-aside","has-post-thumbnail","category-contribution","category-feature","tag-imf-en","tag-international-monetary-fund","tag-ndongo-samba-sylla","tag-peter-doyle","post_format-post-format-aside","pmpro-has-access"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.5 (Yoast SEO v27.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>[Tribune] The IMF\u2019s impossible projections for in\ufb02ation in Senegal - Financial Afrik<\/title>\n<meta name=\"description\" content=\"Headed by Adama Wade and his team of 20 journalists, Kapital Afrik offers strategic and financial information to executives and managers. 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The aim of Kapital Afrik is to provide financial and political news, give priority to human entrepreneurial experiences, lend life to economic policies, givemeaning to statistics. Our \u201cexaggerated pretensions\u201d inspire us. We will strive, and gradually, to conceive, comfort and reach them. Three versions, three approaches and a global vision. The website is constantly on the news. The newsletter relays information every morning to executives, bankers, university financiers, students. The monthly edition analyzes the information and explains the setbacks. A single credo initiates our journalistic approach: information = actors, facts = a pluralistic vision. 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