## IMF Staff Concludes Visit to Djibouti

_IMF News, June 17, 2022_

## Source details

**Canonical URL:** [IMF Staff Concludes Visit to Djibouti](https://www.imf.org/en/news/articles/2022/06/17/pr22209-imf-staff-concludes-visit-to-djibouti)

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## Bibliographic details
- Published: June 17, 2022

---

### Overview
- Mission dates: June 12–16.
- Press Release No. 22209.
- Statement reflects preliminary findings of IMF staff and does not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board discussion.
- Principal conclusion: Following a series of external shocks, the economic recovery in Djibouti appears uneven and urgent fiscal actions are needed to protect vulnerable households and restore debt sustainability.

### Recent economic developments and outlook
- Growth rebounded from pandemic-related disruptions with growth of nearly 5 percent in 2021.
- Port activity remains weak due to the conflict in Ethiopia and trade disruptions in China.
- Reserves have fallen significantly over the past year.
- Rising global commodity prices have:
  - Added pressure on the balance of payments.
  - Put upward pressure on inflation and adversely affected purchasing power.
  - Increased pressure on the government budget.
- Growth in 2022:
  - Will depend on the resumption of port activity.
  - Is tentatively forecast at 3½ percent.

### Fiscal pressures, debt, and public finances
- Debt service is set to triple this year with the recent expiration of the G20 Debt Service Suspension Initiative (DSSI).
- Debt service is set to triple this year to almost 5 percent of GDP.
- Authorities have maintained fixed domestic fuel prices despite rising global prices.
  - As a result, fiscal revenues are set to contract sharply.
- Urgent need to create fiscal space for additional social spending, given rising prices and vulnerable households.

### Policy recommendations and reforms advised by the mission
- Create fiscal space to support vulnerable households by:
  - Targeting fuel subsidies.
  - Strengthening cash transfer programs.
- Urgently review additional measures to create fiscal space, including:
  - Domestic revenue mobilization.
  - Continued public financial management and governance reforms.
- Objective of measures: allow further social spending and restore debt sustainability.

### Mission closing remarks
- The mission team thanked the authorities for warm hospitality and productive discussions and looks forward to continuing close engagement.
- Media contact: PRESS OFFICER: Wafa Amr; Phone: +1 202 623-7100; Email: MEDIA@IMF.org; @IMFSpokesperson

*IMF Press Release No. 22209 — June 17, 2022.*

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## References

- [People's Republic of China and the IMF](http://www.imf.org/external/country/CHN/index.htm)
- [Djibouti and the IMF](http://www.imf.org/external/country/DJI/index.htm)
- [The Federal Democratic Republic of Ethiopia and the IMF](http://www.imf.org/external/country/ETH/index.htm)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2022/06/17/pr22209-imf-staff-concludes-visit-to-djibouti_