FILE PHOTO: A drone view shows Kermel Market in downtown Dakar, Senegal, May 21, 2025. REUTERS/Zohra Bensemra/File Photo

DAKAR (Reuters) -Senegal's economy is 13.5% larger and its debt ratio slightly better after the government updated the base year used to calculate its economic output, the statistics office said.

The West African nation announced in July it had begun the recalculation after a series of downgrades by credit rating agencies due to concerns about the debt misreporting case that was uncovered last year and led to the suspension of its lending programme with the International Monetary Fund.

Updating the base year that a country uses to calculate its economic output is an internationally accepted practice that is meant to take into account new emerging industries and other developments.

UPDATING BASE YEAR CAN RAISE QUESTIONS

It can, however, raise questions among economists when it results in big debt-to-GDP ratio improvements. Senegal's GDP recalculation updates the base year from 2014 to 2021, the country's National Agency for Statistics and Demography said on Tuesday.

The new 2021 GDP figure is 17,316 billion CFA francs ($30.59 billion), up 13.5% from the previous estimate, and the new public debt figure for 2021 is 80%, down from 90.8% the agency said, without giving more recent figures.

"The nominal amount of debt that they owe has not changed. It's just the perception of what that is in relation to the GDP of the country," said Andrew Stanners, portfolio manager at Pictet Asset Management in London.

Senegal's international bonds were down marginally in Wednesday's trading session, bucking the trend among its African peers.

The new numbers imply that total debt was closer to 110% of GDP, not the 130% the IMF has used in the past, Oxford Economics said in a research note.

"This improves the optics but does not change the underlying fiscal position," said Leeuwner Esterhuysen senior economist at Oxford Economics. "Nominal debt, interest costs and near-term financing needs remain unchanged."

The adjustments reflect inclusion of emerging activities Like digital financial services, the oil and gas industry and cashew production, the statistics office said.

The International Monetary Fund froze a $1.8 billion programme with Senegal last year after the discovery of the hidden debt, which the government has blamed on the administration of former President Macky Sall.

The Fund welcomed the rebasing, saying it would improve the quality of economic data and support sound policy-making.

"While rebasing is not a prerequisite for IMF engagement on a potential new program, we are reviewing the updated indicators and will continue to engage closely with the authorities," an IMF spokesperson said.

($1 = 566.0000 CFA francs)

(Reporting by Diadie Ba in Dakar; Additional reporting by Karin Strohecker in London and Duncan Miriri in Nairobi; Writing by Robbie Corey-BouletEditing by Tomasz Janowski and Ed Osmond)