Islamic Republic of Mauritania

Mauritania continues to face a challenging external environment with low and volatile metal prices. A steep decline in iron ore prices in 2014–15 took away half of exports, widened the fiscal deficit, put pressure on reserves, and exposed bank vulnerabilities. In response, the authorities adjusted the budget significantly in 2016 (by 3 percent of GDP), allowed the exchange rate to depreciate, and mobilized foreign grants and loans. These efforts were successful in reducing external imbalances and maintaining macroeconomic stability, but growth slowed considerably, external debt continued to rise (to 72 percent of GDP, with a high risk of debt distress), and financial stability risks heightened. In parallel, the authorities are preparing a national strategy for accelerated and inclusive growth covering 2016–30, including structural reforms and large foreign-financed infrastructure investments to support growth and diversification.