{ "title": "IMF Executive Board Concludes 2024 Article IV Consultation with Djibouti", "publication": "IMF News, June 4, 2024", "sourceUrl": "https://www.imf.org/en/news/articles/2024/06/04/pr24204-djibouti-imf-exec-board-concludes-2024-art-iv-consult", "canonical": "https://www.imf.org/en/news/articles/2024/06/04/pr24204-djibouti-imf-exec-board-concludes-2024-art-iv-consult", "overlayPath": "/en/news/articles/2024/06/04/pr24204-djibouti-imf-exec-board-concludes-2024-art-iv-consult/index.md", "summary": "Washington, DC – June 4, 2024: The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Djibouti on March 22, 2024.", "publishDate": "2024-06-04", "sections": [ { "heading": "Overview and recent developments", "content": "- The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Djibouti on March 22, 2024.\n- After the negative shock of the pandemic and a weak recovery in 2021, the November 2022 peace agreement in Ethiopia bolstered the Djiboutian economy.\n- Growth is expected to have reached about 7 percent in 2023, supported by the rebound in port activity and construction.\n- Inflation is expected to have averaged around 1.8 percent in 2023 and projected to remain subdued.\n- The economic outlook is cautiously optimistic for 2024 and the medium-term but subject to considerable uncertainty from regional risks, including potential trade disruptions.\n- Stronger-than-expected trade from Ethiopia could support growth; fully addressing the debt burden could improve debt sustainability and create fiscal space." }, { "heading": "Executive Board assessment and priorities", "content": "- Directors agreed with the thrust of the staff appraisal and welcomed the 2023 recovery driven by expansion in port activities, train traffic, construction, and energy production.\n- Directors noted considerable external risks, including:\n - Ethiopia's economic trajectory,\n - possible increases in regional migration and refugees,\n - potentially increased disruptions in the Red Sea.\n- Directors emphasized the need for concerted efforts to:\n - address fiscal vulnerabilities,\n - enhance governance,\n - boost job creation,\n - implement structural reforms.\n- It is expected the next Article IV consultation with Djibouti will be held on the standard 12-month consultation cycle." }, { "heading": "Fiscal policy, debt, and tax policy recommendations", "content": "- Directors highlighted the need for a comprehensive long-term strategy to address fiscal vulnerabilities.\n- The debt service moratorium with China provides a window of opportunity for Djibouti to engage with creditors transparently on a strategy to fully address the unsustainable debt burden.\n- Directors supported increasing the capacity of fiscal institutions to:\n - enhance tax collection,\n - improve policy coherence.\n- Recommended fiscal measures include:\n - careful review and rationalization of tax incentives and VAT exemptions,\n - ensuring that revenues from military base leases reflect their real value,\n - better targeting fuel subsidies to free up resources for key social spending." }, { "heading": "State-Owned Enterprises (SOEs) and governance", "content": "- Directors welcomed authorities' efforts toward reforming State-Owned Enterprises.\n- Emphasized the need for better financial oversight and governance of SOEs.\n- Noted that the authorities’ upcoming review and restructuring of the administrative SOEs would be an important first step.\n- Stressed the importance of building strong and broad-based support and providing adequate resources for successful implementation." }, { "heading": "Financial sector and monetary policy", "content": "- Directors encouraged improvements in banking regulation and oversight to strengthen the financial sector, especially given the ongoing MENAFATF evaluation.\n- Agreed that the careful design and introduction of a reserve requirement by the Central Bank of Djibouti (CBD) would be a positive first step to further strengthen the central bank’s liquidity management toolkit." }, { "heading": "Structural reforms and resilience", "content": "- Directors urged the authorities to implement a robust set of structural reforms to:\n - enhance private sector job creation,\n - tackle informality,\n - improve education and training,\n - lower telecom and energy costs.\n- Bolstering resilience to climate shocks and enhancing transparency of policy making, especially by improving data quality, were also emphasized." }, { "heading": "Key statistics (selected figures from Table 1)", "content": "- Real GDP growth:\n - 2020: 1.3\n - 2021: 4.5\n - 2022: 3.9\n - 2023 (Est.): 7.0\n - 2024 (Proj.): 6.5\n - 2025 (Proj.): 6.0\n - 2026 (Proj.): 5.5\n- Consumer prices (annual average):\n - 2020: 1.8\n - 2021: 1.2\n - 2022: 5.2\n - 2023 (Est.): 2.0\n - 2024 (Proj.): 2.1\n - 2025 (Proj.): 2.2\n- Fixed capital investment (percent of GDP):\n - 2020: 29.7\n - 2021: 30.4\n - 2022: 30.6\n - 2023 (Est.): 30.8\n - 2024 (Proj.): 31.1\n - 2025 (Proj.): 31.5\n - 2026 (Proj.): 32.0\n- Gross national savings (percent of GDP):\n - 2020: 41.2\n - 2021: 23.1\n - 2022: 48.0\n - 2023 (Est.): 54.2\n - 2024 (Proj.): 35.9\n - 2025 (Proj.): 35.1\n - 2026 (Proj.): 34.4\n- Revenues and grants (percent of GDP):\n - 2020: 22.9\n - 2021: 20.1\n - 2022: 18.6\n - 2023 (Est.): 17.5\n - 2024 (Proj.): 17.4\n - 2025 (Proj.): 17.3\n- Tax revenues (percent of GDP):\n - 2020: 11.7\n - 2021: 11.6\n - 2022: 11.2\n - 2023 (Est.): 10.8\n - 2024 (Proj.): 11.8\n - 2025 (Proj.): 12.0\n- Expenditure (percent of GDP):\n - 2020: 25.5\n - 2021: 23.2\n - 2022: 20.0\n - 2023 (Est.): 20.2\n - 2024 (Proj.): 20.5\n - 2025 (Proj.): 19.8\n- Overall balance (commitment basis, percent of GDP):\n - 2020: -2.5\n - 2021: -3.1\n - 2022: -1.4\n - 2023 (Est.): -2.6\n - 2024 (Proj.): -3.0\n - 2025 (Proj.): -2.2\n- Broad money (percent change):\n - 2020: -1.7\n - 2021: 3.2\n - 2022: 5.9\n- Net foreign assets (percent change):\n - 2020: -7.7\n - 2021: 0.8\n - 2022: 2.6\n - 2023 (Est.): 2.7\n- Credit to non-government (in percent of GDP):\n - 2020: 26.3\n - 2021: 28.6\n - 2022: 28.1\n - 2023 (Est.): 28.2\n - 2024 (Proj.): 28.4\n - 2025 (Proj.): 28.9\n - 2026 (Proj.): 29.3\n- Current account balance (in millions):\n - 2020: 366\n - 2021: -224\n - 2022: 656\n - 2023 (Est.): 946\n - 2024 (Proj.): 223\n - 2025 (Proj.): 187\n - 2026 (Proj.): 148\n - 2027 (Proj.): 334\n - 2028 (Proj.): 344\n - 2029 (Proj.): 328\n- External public and publicly guaranteed debt (in millions):\n - 2020: 2,356\n - 2021: 2,416\n - 2022: 2,453\n - 2023 (Est.): 2,527\n - 2024 (Proj.): 2,596\n - 2025 (Proj.): 2,636\n - 2026 (Proj.): 2,628\n - 2027 (Proj.): 2,621\n - 2028 (Proj.): 2,491\n - 2029 (Proj.): 2,332\n- External public debt (percent of GDP):\n - 2020: 74.0\n - 2021: 71.4\n - 2022: 65.8\n - 2023 (Est.): 62.8\n - 2024 (Proj.): 59.5\n - 2025 (Proj.): 55.9\n - 2026 (Proj.): 51.5\n - 2027 (Proj.): 47.7\n - 2028 (Proj.): 42.0\n - 2029 (Proj.): 36.9\n- Gross official reserves (in millions):\n - 2020: 677\n - 2021: 578\n - 2022: 581\n - 2023 (Est.): 573\n - 2024 (Proj.): 617\n - 2025 (Proj.): 664\n - 2026 (Proj.): 713\n - 2027 (Proj.): 769\n - 2028 (Proj.): 826\n - 2029 (Proj.): 890\n- Nominal GDP (in millions of Djibouti francs):\n - 2020: 566,068\n - 2021: 601,732\n - 2022: 662,164\n - 2023 (Est.): 714,919\n - 2024 (Proj.): 775,565\n - 2025 (Proj.): 837,952\n - 2026 (Proj.): 906,961\n - 2027 (Proj.): 977,082\n - 2028 (Proj.): 1,053,140\n - 2029 (Proj.): 1,123,567\n- Nominal GDP (in millions of US dollars):\n - 2020: 3,185\n - 2021: 3,386\n - 2022: 3,726\n - 2023 (Est.): 4,023\n - 2024 (Proj.): 4,364\n - 2025 (Proj.): 4,715\n - 2026 (Proj.): 5,103\n - 2027 (Proj.): 5,498\n - 2028 (Proj.): 5,926\n - 2029 (Proj.): 6,322\n- Population (million):\n - 2020: 0.988\n - 2021: 1.002\n - 2022: 1.016\n - 2023 (Est.): 1.030\n - 2024 (Proj.): 1.043\n - 2025 (Proj.): 1.056\n - 2026 (Proj.): 1.069\n - 2027 (Proj.): 1.081\n - 2028 (Proj.): 1.093\n - 2029 (Proj.): 1.106\n\nSource: IMF staff estimates and projections; Djibouti authorities.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2024/06/04/pr24204-djibouti-imf-exec-board-concludes-2024-art-iv-consult" } ], "bullets": [ "[Markdown version](/en/news/articles/2024/06/04/pr24204-djibouti-imf-exec-board-concludes-2024-art-iv-consult/index.md)", "[Structured JSON version](/en/news/articles/2024/06/04/pr24204-djibouti-imf-exec-board-concludes-2024-art-iv-consult/index.json)", "[Bundle manifest](/en/news/articles/2024/06/04/pr24204-djibouti-imf-exec-board-concludes-2024-art-iv-consult/bundle-manifest.json)", "Published: June 4, 2024", "The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Djibouti on March 22, 2024.", "After the negative shock of the pandemic and a weak recovery in 2021, the November 2022 peace agreement in Ethiopia bolstered the Djiboutian economy.", "Growth is expected to have reached about 7 percent in 2023, supported by the rebound in port activity and construction.", "Inflation is expected to have averaged around 1.8 percent in 2023 and projected to remain subdued.", "The economic outlook is cautiously optimistic for 2024 and the medium-term but subject to considerable uncertainty from regional risks, including potential trade disruptions.", "Stronger-than-expected trade from Ethiopia could support growth; fully addressing the debt burden could improve debt sustainability and create fiscal space.", "Directors agreed with the thrust of the staff appraisal and welcomed the 2023 recovery driven by expansion in port activities, train traffic, construction, and energy production.", "Directors noted considerable external risks, including:", "Directors emphasized the need for concerted efforts to:", "It is expected the next Article IV consultation with Djibouti will be held on the standard 12-month consultation cycle.", "Directors highlighted the need for a comprehensive long-term strategy to address fiscal vulnerabilities.", "The debt service moratorium with China provides a window of opportunity for Djibouti to engage with creditors transparently on a strategy to fully address the unsustainable debt burden.", "Directors supported increasing the capacity of fiscal institutions to:", "Recommended fiscal measures include:", "Directors welcomed authorities' efforts toward reforming State-Owned Enterprises.", "Emphasized the need for better financial oversight and governance of SOEs.", "Noted that the authorities’ upcoming review and restructuring of the administrative SOEs would be an important first step.", "Stressed the importance of building strong and broad-based support and providing adequate resources for successful implementation.", "Directors encouraged improvements in banking regulation and oversight to strengthen the financial sector, especially given the ongoing MENAFATF evaluation.", "Agreed that the careful design and introduction of a reserve requirement by the Central Bank of Djibouti (CBD) would be a positive first step to further strengthen the central bank’s liquidity management toolkit.", "Directors urged the authorities to implement a robust set of structural reforms to:", "Bolstering resilience to climate shocks and enhancing transparency of policy making, especially by improving data quality, were also emphasized.", "Real GDP growth:", "Consumer prices (annual average):", "Fixed capital investment (percent of GDP):", "Gross national savings (percent of GDP):", "Revenues and grants (percent of GDP):", "Tax revenues (percent of GDP):", "Expenditure (percent of GDP):", "Overall balance (commitment basis, percent of GDP):", "Broad money (percent change):", "Net foreign assets (percent change):", "Credit to non-government (in percent of GDP):", "Current account balance (in millions):", "External public and publicly guaranteed debt (in millions):", "External public debt (percent of GDP):", "Gross official reserves (in millions):", "Nominal GDP (in millions of Djibouti francs):", "Nominal GDP (in millions of US dollars):", "Population (million):", "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)", "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)", "[PRESS CENTER](http://presscenter.imf.org/)", "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2024/06/04/pr24204-djibouti-imf-exec-board-concludes-2024-art-iv-consult/index.md", "json": 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