Mali is a fragile state, struggling with insurgency and terrorism. Implementation of the June 2015 peace agreement is difficult and attacks by terrorist groups not part of the peace agreement are causing numerous casualties. The economy performed well in 2016, with strong economic growth and low inflation. However, poverty remains high and social discontent is growing. Security efforts and the decentralization process associated with the peace agreement pose fiscal challenges. The near-term outlook for continuing strong growth is subject to downside risks from the volatile security conditions.