## IMF Staff Concludes Visit to Djibouti

_IMF News, June 15, 2023_

## Source details

**Canonical URL:** [IMF Staff Concludes Visit to Djibouti](https://www.imf.org/en/news/articles/2023/06/15/pr23215-djibouti-imf-staff-concludes-visit)

## Other formats

- [Markdown version](/en/news/articles/2023/06/15/pr23215-djibouti-imf-staff-concludes-visit/index.md)
- [Structured JSON version](/en/news/articles/2023/06/15/pr23215-djibouti-imf-staff-concludes-visit/index.json)
- [Bundle manifest](/en/news/articles/2023/06/15/pr23215-djibouti-imf-staff-concludes-visit/bundle-manifest.json)

## Bibliographic details
- Published: June 15, 2023

---

### Mission and context
- An International Monetary Fund (IMF) team, led by Joyce Wong, visited Djibouti on June 11-15.
- Press Release No. 23/215
- End-of-Mission press releases convey preliminary findings after a visit to a country; the views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board discussion.
- Statement date: June 15, 2023

### Economic developments and outlook
- Real GDP growth:
  - 4.8 percent in 2021
  - 3.7 percent in 2022 (authorities’ preliminary estimates)
- Fiscal outturn:
  - Fiscal deficit narrowed to 1.4 percent of GDP in 2022
  - The fiscal outturn reflects in part some arrears accumulation, both domestic and external, pending the outcome of debt restructuring with their main external creditor.
- Trade, transport, and prices:
  - Port activity started to rebound in 2023 on the back of the peace agreement in Ethiopia; a continued recovery is expected in 2023.
  - Inflation remains below regional trends, aided by exchange rate stability and unchanged domestic fuel prices.
- Outlook caveat:
  - A continued recovery is expected for 2023, but the outlook remains highly dependent on global and regional developments.

### Risks and constraints
- Ongoing external and domestic shocks affecting Djibouti:
  - Consequences of the war in Ukraine
  - The conflict in Ethiopia
  - Tightening of global financial conditions
  - Climate change
- Debt and financing:
  - Authorities are accelerating efforts on debt negotiations with their main creditor.
  - Some arrears accumulation has affected the fiscal picture.

### Policy recommendations and reform priorities
- Fiscal policy and revenue:
  - Improve revenue collection.
  - Enhance expenditure efficiency.
  - Overhaul fiscal policies to rebuild fiscal space.
  - Review exonerations and military base leases to entrench a more equitable and sustainable revenue base.
- Social protection and subsidies:
  - Shift from broad-based subsidies to better targeted social transfers, as inflation abates, to direct scarce public resources to human capital development.
- Governance and public financial management:
  - Strengthen governance.
  - Upcoming publication of the PEFA report will pave the way for future reforms.
  - The upcoming MENAFATF evaluation and ongoing inter-agency preparatory work highlight the importance of governance.
- State-owned enterprises (SOEs):
  - Accelerate the implementation of the Code of Good Governance for SOEs.
  - Further empower the Executive Secretariat of the State Portfolio to improve accountability and contain future risks from SOE borrowing.
- Engagement:
  - Mission and authorities agree on the need for an overhaul of fiscal policies and continued close engagement.

### Mission closing remark
- The mission team expressed deep appreciation to the Djiboutian authorities and other counterparts for their warm hospitality, excellent cooperation and candid discussions, and looks forward to continuing close engagement.

*Press Release No. 23/215 — IMF Staff Concludes Visit to Djibouti, June 15, 2023*

---


## References

- [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/2023/06/15/pr23215-djibouti-imf-staff-concludes-visit_