## IMF Staff Concludes Visit to Burundi _IMF News, October 5, 2023_ ## Source details **Canonical URL:** [IMF Staff Concludes Visit to Burundi](https://www.imf.org/en/news/articles/2023/10/04/pr23337-burundi-imf-staff-concludes-visit) ## Other formats - [Markdown version](/en/news/articles/2023/10/04/pr23337-burundi-imf-staff-concludes-visit/index.md) - [Structured JSON version](/en/news/articles/2023/10/04/pr23337-burundi-imf-staff-concludes-visit/index.json) - [Bundle manifest](/en/news/articles/2023/10/04/pr23337-burundi-imf-staff-concludes-visit/bundle-manifest.json) ## Bibliographic details - Published: October 5, 2023 --- ### Mission and context - IMF team led by Ms. Mame Astou Diouf, Mission Chief for Burundi, visited Bujumbura during September 25−29, 2023 and held follow-up discussions during October 2−4, 2023. - On July 17, 2023, the Executive Board approved a 38-month arrangement under the Extended Credit Facility (ECF) with access of SDR 200.2 million (or about US$ 261.7 million, representing 130 percent of quota). - End-of-Mission press release conveys preliminary findings of IMF staff and does not necessarily represent the views of the IMF’s Executive Board. ### Recent developments and macroeconomic outlook - Economic growth - Economic growth is expected to slightly accelerate in 2023 (from 1.8 percent in 2022), driven by the secondary and tertiary sectors. - Agriculture, supply, and fuel - Rain delays and structural challenges at the end of 2022 impacted the first agricultural season of 2023. - Commerce and in-country distribution of agricultural products were disrupted by domestic fuel shortages, compounded by limited foreign exchange availability, high fuel import prices, and supply chain issues. - Increases of pump prices in July and September and higher fuel import volume helped reach cost-recovery pricing and tame shortages. - Inflation - Average inflation stood at around 29 percent during January−August 2023, driven mainly by food prices, despite easing somewhat during March−July. - Beneficial effects of the new agricultural harvest on food prices were outweighed by high import prices owing to the war in Ukraine and domestic factors. - External sector and reserves - External sustainability remains a pressing challenge. - The current account deficit is projected to remain large (15.6 percent of GDP in 2022). - Foreign currency reserves declined to US$ 59.7 million (about 0.5 month of imports) in mid-September (from 1.3 months of imports at end-March 2023), driven by the import bill and delayed gold sales. - Strong remittance inflows and the IMF’s first ECF disbursement provided a cushion. - Exchange rate developments - The central bank operated a 38-percent nominal ER depreciation on May 4, 2023, which temporarily reduced the parallel ER market premium. - The parallel ER market premium widened from about 42 percent on May 4 to about 57.4 percent in end-September. - Financial sector - The financial sector shows resilience. ### Reform program objectives and policy directions - Program aims - Support economic recovery from shocks. - Restore external sustainability. - Strengthen debt sustainability. - Create fiscal space for accelerated and inclusive growth. - Fiscal policy - Resuming pro-growth fiscal consolidation to support debt sustainability while protecting the vulnerable population. - The fiscal deficit is estimated to have widened substantially in FY2022/23 (June−July) compared to FY2021/22 (7 percent of GDP), driven mainly by salaries, subsidies, and accelerated investment scaling up. - A return to fiscal consolidation is planned under the program starting in FY2023/24, building on strengthened revenue collection efforts and current spending restraint while preserving social spending and efficient public investment. - Public debt is expected to decline over the medium term. - Monetary and external policy recalibration - The Bank of the Republic of Burundi (BRB) is committed to recalibrating monetary and external policies to rebuild FX reserve buffers and improve ER market efficiency. - Essential components include FX market liberalization, tightened monetary policy, and limited financing to the budget. - These measures aim to curb inflation pressures. - Governance and structural reforms - Governance and structural reforms are intended to ensure a business environment conducive to private sector-led, job-rich, and inclusive growth. - Financial sector vulnerability consideration - Growth- and governance-enhancing reforms should be undertaken while being attuned to financial sector vulnerabilities. ### Engagement and next steps - The IMF remains committed to supporting Burundian authorities to reduce external imbalances, rein in inflation, preserve debt sustainability, and foster governance and sustainable and inclusive growth. - Mission meetings included H.E. Prime Minister Gervais Ndirakobuca; H.E. Audace Niyonzima, Minister of Finance, Budget and Economic Planning (MFBPE); Mr. Dieudonné Murengerantwari, Governor of the Bank of the Republic of Burundi (BRB); Ms. Francine Inarukundo, Permanent Secretary of the MFBPE; other government and BRB officials; commercial banks; private sector; civil society; and donors. - The mission expressed thanks to the Burundian authorities for hospitality, cooperation, and open and productive discussions. *IMF Press Release No. 23/337 — IMF Communications Department* --- ## References - [Burundi and the IMF](http://www.imf.org/external/country/BDI/index.htm) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [Extended Credit Facility (ECF)](https://www.imf.org/en/About/Factsheets/Sheets/2016/08/02/21/04/Extended-Credit-Facility) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2023/10/04/pr23337-burundi-imf-staff-concludes-visit_