Country Report Mauritania April 2011

Outlook for 2011-12: Inflation

Historically, consumer prices have broadly tracked movements in prices for international commodities, particularly food and fuel, given that they account for such a large proportion of household spending and that reliance on imports of these commodities is high. In this respect the expected mild appreciation of the ouguiya will help to contain inflation. However, global food, feedstuffs and beverage prices are expected to increase by 28.9% in 2011. On balance, we expect that annual average consumer price inflation will pick up slightly, to 6.5% in 2011, before falling back to 6% in 2012. However, there are significant risks to this forecast, and inflation will be much higher if the ouguiya appreciates less than currently expected (or not at all) or if unfavourable weather conditions lead to higher international food prices, which made up 22.3% of the import bill in 2009, according to the IMF.

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