Country Report Senegal April 2011

Outlook for 2011-12: Inflation

In June 2010 the consumer price index basket was rebased to 2008 and reweighted. Food's weighting has shrunk from 40.3% to 32.9%, but remains the primary driver of price growth, fuelled by rising global food prices, also felt through an enlarged weighting of the restaurants sub-index. Higher domestic food production, government subsidies, new price caps on several essential goods and a strengthening CFA franc will help to anchor local food prices, but could be undermined if global commodity prices continue to rocket. The government's withdrawal of some groundnut sector subsidies will put pressure on industrial-but not consumer-prices. Average inflation is set to accelerate from 1.2% in 2010 to an estimated 3.4% in 2011, easing to 3% in 2012.

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