Outlook for 2011-12

• The president, Abdoulaye Wade, remains committed to running for a third term in 2012 as the candidate of the ruling Parti démocratique sénégalais (PDS), but internal support appears to be fraying.
• With the rebels gaining access to increasingly sophisticated weaponry, violence is intensifying in the breakaway Casamance region, undoing tentative progress a year ago towards resolution of the 30-year insurgency.
• The Economist Intelligence Unit forecasts that the fiscal deficit will widen to 6% of GDP in 2011, because of aggressive investment plans, before narrowing to 4.9% of GDP in 2012 as economic growth improves.
• As foreign direct investment inflows, industrial and agricultural output and public works accelerate, we forecast real GDP growth of 4.3% and 4.5% in 2011 and 2012, respectively. Unreliable power supply will remain a key risk.
• In view of recent inflation data and the expectation of higher global commodity prices, we forecast that inflation will rise from an average of 1.2% in 2010 to 3.4% in 2011, before easing slightly to 3% in 2012.
• The current-account deficit is forecast to widen to 11.2% of GDP in 2011, mainly on higher global commodity prices, before falling back to 9.7% in 2012.

Monthly review

• Dakar, and a number of other towns, witnessed several parallel pro- and anti-government demonstrations marking the 11th anniversary of the "alternance" on March 19th.
• A supposed coup attempt was revealed by the minister of justice the day before, but those arrested were relased days later without charge.
• Mr Wade is losing support within the PDS with the public distancing from his goal of a third term of Aminata Tall, a PDS heavyweight. Mrs Tall's party future is in doubt.
• At a donor conference, the government raised CFAfr1.6trn (US$3.3bn) over five years for its infrastructure programme, double the sum originally sought.
• The cost of the chronic power shortages in 2010 has been put at a loss of 1.4% of potential economic growth according to the research division of the Ministry of Finance. Real GDP still managed to grow by an estimated 4.2%.
• Notwithstanding doubts as to the accuracy of government data, 2010 has seen another record year for agricultural output
• Construction of a new cement factory that will allow Senegal to meet all its domestic cement needs is nearing completion.