Outlook for 2011-12

The government is expected to remain in power over the forecast period, and the president, Mohamed Ould Abdel Aziz, will continue to strengthen his hold on power. Moreover, political stability will improve as the president and opposition political parties engage in dialogue. The ruling Union pour la République (UPR) is expected to win a majority of seats in the municipal and legislative elections scheduled to take place in 2011 and 2012 respectively, consolidating Mr Abdel Aziz's control over legislation. Improved donor relations will pave the way for renewed aid flows and substantial foreign direct investment. Mineral exploration and mining, private investment and greater emphasis on capital spending in the national budget will boost economic growth, which is forecast to pick up further, to an average of 6.2% a year in 2011-12. The current-account deficit will narrow slightly in 2011, to 8.2%, before returning to 9% of GDP in 2012 on the back of continued increases in public and private investment.

The political scene

In late November Mr Abdel Aziz called on all of the country's political groups to engage in dialogue. This announcement is potentially significant, as it represents a softening of the president's stance towards opposition parties allied together in the Coordination de l'opposition démocratique (COD) that have so far refused to accept the legitimacy of the president and have remained on the sidelines of the political process. At the same time, the COD has been weakened by the announcement that another of its member parties is to split from the coalition and support the government in its reform programme.

Economic policy

In early December the IMF published its first review of the extended credit facility (ECF) with Mauritania for 2010-12. The IMF gave a positive assessment of the authorities' performance, and noted that all but one of the quantitative performance criteria had been met. During the review the Fund noted that budgetary outturn in 2010 had been better than expected and adjusted its estimate for the budget deficit to 4% of GDP (previously 5%).

The domestic economy

The government hosted an international mining conference in the capital, Nouakchott, in mid-November, and it highlighted current investor interest in the country's vast uranium deposits.

Foreign trade and payments

The strong recovery in international demand for Mauritania's key exports-iron, gold and oil-in 2010 led to a higher trade surplus than expected.