Mali continued with economic reforms in 2008 that enabled it to soften the external shocks inflicted by the oil, food and financial crises. Economic growth, which had slowed in 2007 due to difficulties in the mining and cotton sectors, recorded a more pronounced decline in 2008, despite the cushioning effects of the Rice Initiative, a stepped-up privatisation process and budgetary support from technical and financial partners. Real GDP growth was estimated at 3.6 per cent in 2008. Growth is expected to pick up in 2009 and 2010, with GDP increasing by 4.2 and 5.1 per cent respectively.

The continuing pressure on public finances and on the country’s external position, despite the government’s adjustment efforts, reflects the extent of the impact of these crises, as well as the government’s difficulties in reviving and promoting cotton and mining production. The prices of Mali’s exports (cotton and gold) increased, but not as much as the price of oil. With the food crisis and with low domestic elasticity of supply, the rise in oil prices pushed domestic prices up sharply. Inflation reached 9.3 per cent at end-December 2008, cutting into domestic purchasing power. The government was obliged to grant reductions in valued added tax and customs duties, increase salaries and subsidies, and reinforce price monitoring, particularly the price of petrol at the pump.

The implementation of the Poverty Reduction and Growth Facility (PRGF) and the acceleration of measures under the Growth and Poverty Reduction Strategy Framework (GPRSF) helped to contain inflationary pressures and enabled the government to address its obligations in terms of the Millennium Development Goals (MDGs) and to pursue its policy of poverty reduction. The government announced its determination to continue the reforms, and the socio-economic situation should improve further over the 2009-11 period.