In 2003-2004, real GDP grew at an estimated 6-7% per annum thanks to buoyant iron are exports, but the current account , but the current account deficit (excluding oil activity and FDI-related imports) remained close to 16% of the GDP for two consecutive years, reflecting the rise in imports and the evolution of international oil prices. In July 2004, a new economic team took action to tighten fiscal and monetary policies. The Central Bank curbed its financing of government operations, raised reserve requirements on bank deposits and stepped up its intervention on the foreign exchange market.

Economic development

The government finalized in 2002 a livestock sector development strategy to raise productivity. A series of measures seeking to increase farm productivity focus on training, introduction of animal traction, credit and input provision schemes. Rural infrastructure is also to be developed. In addition , efforts have been made to address the priorities identified by rural communities. Priority is on the constraints preventing further advance in agriculture, insufficient access to factors of production, isolation and environmental problems.
According to the last national household survey, in 2000 around 75% of all poor people were concentrated in rural area. The contribution of the agricultural, livestock and fisheries sectors to growth in 2002 has been negligible, mainly due to adverse climatic conditions. Achieving rapid agricultural growth, in the order of 4-5% per annum, will require increased efforts to develop and implement an integrated strategy for rural growth, embracing the various sub sectoral action plans and paying particular attention to the southern area, where poverty has increased in recent years

Actions are also needed to improve the living conditions in the urban areas. An Agency for Urban Development and a Coordination Unit has been set up to supervise the implementation of the ten year Urban Development Programme, which provides a stable policy environment for private sector investment. Concrete steps have been taken in the field of housing, micro-credit, community activities and training schemes.
Increasing efforts are also needed to expand access to primary health and to increase the quality of health services, notably in rural areas. Although health indicators in Mauritania compare favourably with neighbouring countries, more is to be done to achieve health targets such as reduced child mortality and to combat malaria and tuberculosis. In addition, there is a need to shift the share of public spending in favour of the poor and remote areas.
Another major project is to connect 60% of the Mauritanian population to a water source by 2015. provision of water and treatment of wastewater is an important priority of the government.

Future outlook

In 2003-2004, progress in structural reforms was slower than planned, except for the restructuring of the social security fund, and major weaknesses surfaced in fiscal, monetary and exchange rate management. Yet, the government intends to maintain a dynamic and flexible policy, capable of transforming the economy into an open market place, corresponding to the present mutations caused by globalisation. Efforts also tend to reduce foreign debt in close cooperation with foreign donors and the international financial community.
The major feature of the economic policies is to stimulate the emergence of the private sector as the main driving force for economic development. The role of the government in the economy is thus to be limited to regulating and controlling the economy. Economic diversification is also seen as a priority in order to reduce the country's dependence and to create new links with foreign partners and markets.
Mauritania is expected to become an oil producer in 2006 and has started to prepare for the challenges of managing potentially significant oil revenues. The authorities plan to budget all the forth-coming oil revenues and to use it in accordance with the priorities that will be set up in the 2006-10  Poverty Reduction programme, to be submitted to Parliament by the end of this year.
Mauritania is endowed with numerous natural resources, such as iron ore, gypsum, copper, phosphate, diamonds, gold and oil. The mining industry is its key economic sector and future projects are aimed at the exploitation of the phosphate reserves and the uranium mines in the northern part of the country.
The fishing sector is an important contributor to GDP and supplies some 25% of the budgetary revenues. The annual catch was gradually improved in the past decade and experts believe the potential catch could amount to 700,000 tonnes per year. The fishing sector longtime suffered from the lack of spare parts and maintenance. Finance for new investments and training heavily depends on foreign resources. Another major feature is to improve the local transformation of the catch and to limit the number of foreign operators.
A relatively new sector which is receiving increased attention is the tourist industry. Mauritania holds many trump cards to attract tourists, especially those seeking a bewildering natural environment. In the years ahead, tourism is to become a major economic activity.
The Mauritanian investment code was introduced as part of the efforts to create an export-led growth. The law grants tax incentives, with priority given to capital flows in agriculture, livestock and fishing.
Opportunities for increased international cooperation also come from the development of the infrastructures at the port of Nouadhibou with the aim of improving transit traffic to the land-locked countries of the African hinterland. The port of Nouadhibou has the capacity to handle some 500,000 tonnes of cargo a year, 40% in excess of the country's needs and an important opportunity for neighbouring countries such as Mali. In the future, a link between the country's railway system is planned to the Maghreb network as well. 

Several permits for oil exploration have been given to foreign companies (Spanish, Italia, Australian and American) in the past few years, especially to survey the coastal waters, regarded as  potentially rich in oil. A study of the geology and the petroleum potential indicates however that additional exploration efforts are needed.
Mauritania also possesses one of the largest reserves of iron ore in the world, estimated at 4,000 million tones. Other prospecting licenses for minerals have been issued to foreign companies searching for gold, diamonds, gypsum, salt and phosphates.

Basic Economic and Financial Indicators, 2001-2005

Sources.: Mauritanian authorities and the International Monetary Fund