The occupation of northern Mali by militants has hammered the economy in Bamako, the southern capital, where foreigners are pulling out and unemployment and prices are climbing higher. \"The Malian economy is going through a tough time. Struggling because of a poor harvest in 2011-2012, it has also suffered considerably because of the March 2012 coup and its fallout,\" the International Monetary Fund (IMF) noted after a mission to the North African country last month. Militants have in control most of Mali\'s northern desert regions since the overthrow of former president Amadou Toumani Toure on March 22, and plans are afoot for an international force to intervene there sometime next year. \"The occupation of the North seriously disrupted agricultural production and trade relations. The deteriorating security situation prompted a sharp reduction of travel to Mali,\" the IMF noted. \"This hit hard the commerce, hotel and restaurant sectors,\" it added. The Fund expects Mali\'s economy to contract by 1.5 percent this year, and US President Barack Obama has stripped the country of trade priviledges conferred by the Africa Growth and Opportunity Act (AGOA) programme, citing backtracking from democratic reforms. In Bamako, unemployment has shot up to 17.3 percent of the workforce, according to data from the national statistics institute Instat. The service sector has contracted by 8.8 percent this year, Instat data shows, making it the hardest hit part of the economy, with waves of layoffs in hotels a stark sign of slumping business and tourist activity. \"Employers have run out of ways to maintain jobs such as having staff take time off and resorting to technical or temporary unemployment,\" said Salif Bagayoko, head of the local labour inspection office. Women looking for domestic work swarm the Apaf association for family aid, and have lowered their salary targets even as the rising cost of living hits low-income households. The cost of fuels, cooking gas and other essential products have doubled in certain cases. Some domestic workers used to be employed by foreign aid staff for the modest sum of 80,000 CFA, or 122 euros ($ 160) per month. Now, \"even 35,000 CFA would be acceptable,\" acknowledged Aissa Camara, a 42-year-old widow who lost her job in February. Mali\'s national carrier Air Mali has suspended its activities for nine months owing to the crisis. The airline has asked the government for more funds, \"but the state has problems too,\" Air Mali finance director Souleymane Sylla said on Monday. \"Shareholders were not ready to inject fresh funds and want to give themselves some time to have better outlook regarding to the country\'s future.\" Sylla said that Air Mali \"had forecast a balanced result for 2013, but the coup d\'etat changed everything,\" and added that 66 employees had lost their jobs. On the industrial front, 20 percent of factories in Bamako have closed while 60 percent have resorted to technical unemployment measures. \"Since March, we have been operating at a loss,\" said Alioune Badara Diawara, deputy managing director of Batex-ci, a textile plant. \"We have orders, thanks to neighbouring countries. But cotton, our raw material, has not been delivered for two months, the company that makes it is at the end of its rope,\" he added. Cotton is one of the main industries in mainly agricultural Mali, which also has some gold mines. Before the crisis, tourism was also one of the main drivers. \"We are the real victims,\" says Gaoussou Kantako, an artisan jeweller since 1993 at the N\'Golonina market in Bamako. \"One can spend three, four days without seeing a customer.\" According to him, some 120 of his artisan colleagues, or about half, have left the market over the past few months. \"Some artisans are discouraged, they either stay home or they\'ve left to go work in the gold mines.\"