Loading component...
IMF Executive Board Concludes 2025 Article IV Consultation with Djibouti
September 11, 2025
Loading component...
IMF Communications Department
MEDIA RELATIONS
PRESS OFFICER: Wafa Amr
Phone: +1 202 623-7100Email: MEDIA@IMF.org
Washington, DC – September 11, 2025: The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation[1] with Djibouti and considered and endorsed the staff appraisal without a meeting on a lapse-of-time basis.
Djibouti’s recent and foreseeable growth remains steady with moderate inflation, supported by Ethiopia’s expansive market and strong transshipment amid Red Sea tensions. The fiscal and reserves positions improved in 2024 after a brief period of fiscal overruns. In a challenging global climate, the authorities’ focus on macroeconomic stability, debt sustainability, and economic diversification to support job creation is commendable.
Djibouti’s priorities are to reduce debt and continue rebuilding reserves, through ongoing debt negotiations and prudent fiscal management. While government revenues are limited compared to spending needs for development and debt service, segments of the state-owned enterprises (SOE) exhibit robust profitability. Mobilizing their dividends for debt service and reserve accumulation, implementing efficiency-enhancing SOE reforms, standardizing tax regimes to broaden the tax base, limiting non-essential expenditures, and applying a medium-term debt strategy remain key priorities.
Private sector development is key to boosting formal jobs. Enhancing investment in health and education to strengthen human capital, substantially narrowing tax exemptions, and implementing energy sector reforms, are essential elements in building a more inclusive growth model.
Executive Board Assessment
Djibouti is positioned to leverage its economic resilience to tackle fiscal and development challenges. Djibouti has handled recent shocks well, maintaining solid growth despite Red Sea tensions, with moderate inflation and rising reserves. Logistics investments over the past decade have boosted growth and economic transformation but increased external debt, leaving limited fiscal space considering development needs. In a challenging global climate, the authorities’ focus on macroeconomic stability, debt sustainability, and economic diversification to support job creation is commendable.
Growth stays robust amid regional conflicts. Economic growth is expected to have surpassed 6½ percent of GDP in 2024, driven by higher transshipment activity alongside robust expansion in the construction, commerce, telecommunications and tourism sectors. Moderation in international food and energy prices has contributed to keeping inflation contained. In 2024, substantial fiscal consolidation was realized, which aided in rebuilding reserves and partially offset the decline seen since late 2023; however, reserve levels remain below the monetary base. The authorities’ plan to maintain strong fiscal consolidation, aiming for a government surplus this year and a balanced budget in the medium term, is welcome.
The outlook is positive but faces risks amid global uncertainty. Growth is projected to remain strong at about 6 percent in 2025, then to stabilize near 5½ percent in the medium term, largely driven by Ethiopia’s strong demand for port services. Inflation is projected to remain subdued in line with global energy and food prices. External risks include heightened instability in the Horn of Africa with increased migration potentially straining social conditions amid constrained fiscal space, reduced development aid, new competition from nearby ports, and global policy shifts possibly weakening the dollar and Djibouti franc, spurring service exports but raising inflation.
Djibouti needs to restore debt sustainability and rebuild reserves through a mix of fiscal consolidation, SOE reform, and debt negotiations. Clearing all arrears and finalizing debt negotiations is key to restore debt sustainability, alongside the containment of public and publicly guaranteed debt through quantified and enforced ceilings on both SOE and central government debt. This should be complemented by durable fiscal consolidation. To sustain progress, it is imperative to ensure the effective implementation of the revenue and expenditure measures outlined in the authorities’ 2024–27 Action Plan for fiscal reforms as well as rationalize tax expenditures associated with the derogatory regimes.
Staff welcomes the authorities’ commitment to accelerate SOE governance reform. Swiftly implementing the Code of Good SOE Governance, including by collecting financial statements from all SOEs to allow performance monitoring, together with enforcing a transparent dividend policy,
and gradually deleveraging those highly indebted, will contribute to achieving debt sustainability. In addition, staff encourages the authorities to review the SOE portfolio to determine whether to retain, restructure, or divest each entity to improve the efficiency of the sector. The authorities should also apply a market-based approach to financial settlement practices between SOEs and the state.
Building on the recent recovery in reserves, the authorities should pursue a comprehensive strategy to strengthen the currency board. Alongside amending the CBD law to enhance its autonomy and implementing reserve requirements incrementally, the CBD should consider retaining future CBD profits to further bolster reserves. Furthermore, sustaining fiscal consolidation and leveraging dividends from profitable SOEs, including ex-SWF entities, remain essential measures to minimize the recurrence of overdrafts.
Speeding up reforms to boost private investment, diversify the economy, and create jobs would further support the authorities’ commitment to inclusive growth. Leveling the playing field between companies operating under the general and special regimes, and lowering electricity costs by curbing government agencies' overuse and improving bill collection, will buttress Djibouti’s investment momentum. Enhancing SME financing and strengthening education and job training under the 2021–35 education master plan is essential for private sector growth and the effective implementation of the ‘Vision 2035’ national development strategy.
High quality data coverage will support policy making and strengthen surveillance. The authorities have taken important steps to improve the dissemination and quality of macroeconomic statistics and are determined to further improve the coverage and consistency of national, fiscal, and external accounts data in line with DAA requirements. Advancements in data compilation methods and the timely publication of statistics will further enhance economic analysis and policy making.
[1] Under the IMF’s Articles of Agreement, publication of documents that pertain to member countries is voluntary and requires the member consent. The authorities have requested additional time to decide on the publication of the staff report. A final decision is expected not later than 28 days from the Board consideration date.
|
|
|||||||||||
|
Table 1. Djibouti: Selected Economic and Financial Indicators, 2022–30 |
|||||||||||
|
|
|
|
|
|
|||||||
|
|
2021 |
2022 |
2023 |
2024 |
|
2025 |
2026 |
2027 |
2028 |
2029 |
2030 |
|
|
|
|
|
Est. |
|
Proj. |
|||||
|
|
|
||||||||||
|
National accounts |
(Annual percentage change) |
||||||||||
|
Real GDP |
4.4 |
5.2 |
7.4 |
6.5 |
|
6.0 |
6.0 |
6.0 |
5.5 |
5.5 |
5.5 |
|
Consumer prices (annual average) |
1.2 |
5.2 |
1.4 |
2.1 |
|
1.6 |
1.5 |
1.4 |
1.4 |
1.4 |
1.4 |
|
Consumer prices (end of period) |
2.5 |
3.6 |
3.7 |
-0.6 |
|
1.8 |
1.6 |
1.5 |
1.4 |
1.7 |
1.6 |
|
|
|
|
|
|
|
|
|
|
|
||
|
Saving and investment |
(In percent of GDP) |
||||||||||
|
Fixed capital investment |
29.7 |
29.0 |
24.5 |
26.1 |
|
26.1 |
26.0 |
26.0 |
26.1 |
26.5 |
26.7 |
|
Non-government |
22.3 |
23.8 |
17.9 |
20.8 |
|
21.1 |
20.5 |
20.5 |
20.6 |
21.1 |
21.3 |
|
Central government |
7.3 |
5.2 |
6.6 |
5.3 |
|
5.0 |
5.5 |
5.5 |
5.5 |
5.4 |
5.4 |
|
Gross national savings |
23.1 |
47.9 |
42.6 |
40.2 |
|
34.2 |
33.6 |
33.9 |
34.2 |
34.8 |
35.0 |
|
Savings/investment balance |
-6.6 |
19.0 |
18.1 |
14.1 |
|
8.1 |
7.6 |
7.9 |
8.1 |
8.3 |
8.3 |
|
|
|
|
|
|
|
|
|
|
|
||
|
Central government |
(In percent of GDP) |
||||||||||
|
Revenues and grants |
20.1 |
19.5 |
18.1 |
18.0 |
|
19.0 |
18.8 |
18.6 |
18.5 |
18.4 |
18.2 |
|
Tax revenues |
11.6 |
11.7 |
11.1 |
11.0 |
|
11.2 |
11.3 |
11.4 |
11.4 |
11.5 |
11.6 |
|
Nontax revenue |
6.7 |
6.8 |
5.2 |
5.9 |
|
6.7 |
6.4 |
6.1 |
5.9 |
5.7 |
5.5 |
|
Grants |
1.8 |
1.1 |
1.7 |
1.1 |
|
1.1 |
1.1 |
1.1 |
1.1 |
1.1 |
1.1 |
|
Expenditure |
23.1 |
21.0 |
21.5 |
20.6 |
|
20.1 |
19.6 |
19.2 |
18.8 |
18.5 |
18.1 |
|
Current expenditure |
15.8 |
15.7 |
14.9 |
15.3 |
|
15.0 |
14.1 |
13.7 |
13.3 |
13.0 |
12.7 |
|
Capital expenditure |
7.3 |
5.2 |
6.6 |
5.3 |
|
5.0 |
5.5 |
5.5 |
5.5 |
5.4 |
5.4 |
|
Domestically financed |
4.7 |
3.2 |
3.9 |
3.6 |
|
3.1 |
3.8 |
4.6 |
4.9 |
5.4 |
5.4 |
|
Foreign-financed |
2.9 |
2.0 |
2.6 |
1.7 |
|
2.0 |
1.7 |
0.8 |
0.6 |
0.1 |
0.0 |
|
Covid-19/emergency expenditures |
0.7 |
0.0 |
0.0 |
0.0 |
|
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Overall balance (commitment basis) |
-3.1 |
-1.5 |
-3.5 |
-2.6 |
|
-1.0 |
-0.8 |
-0.6 |
-0.3 |
-0.1 |
0.1 |
|
Change in arrears |
0.4 |
1.2 |
-0.2 |
-0.5 |
|
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Overall balance (cash basis) |
-2.7 |
-0.3 |
-3.7 |
-3.1 |
|
-1.0 |
-0.8 |
-0.6 |
-0.3 |
-0.1 |
0.1 |
|
Overall Central Government and Publicly Guaranteed Debt |
71.5 |
69.0 |
69.9 |
68.9 |
|
67.2 |
62.3 |
56.9 |
50.1 |
44.0 |
38.5 |
|
|
|
|
|
|
|
|
|
|
|
||
|
Monetary sector |
(Annual change in percent of broad money) |
||||||||||
|
Broad money |
5.3 |
-1.7 |
7.8 |
3.4 |
|
4.7 |
5.0 |
5.1 |
5.7 |
5.5 |
5.9 |
|
Net foreign assets |
-2.4 |
-7.7 |
-0.4 |
-6.5 |
|
2.9 |
2.7 |
2.0 |
2.4 |
-3.2 |
1.1 |
|
Net domestic assets |
7.7 |
6.0 |
8.3 |
9.9 |
|
1.9 |
2.3 |
3.1 |
3.4 |
8.7 |
4.8 |
|
Of which: Claims on government (net) |
2.3 |
-0.6 |
3.6 |
4.3 |
|
-0.2 |
-0.3 |
-0.3 |
-0.2 |
-0.2 |
-0.1 |
|
Of which: Claims on non-government sector |
2.8 |
5.8 |
5.4 |
5.7 |
|
4.1 |
4.3 |
4.5 |
4.7 |
4.9 |
5.1 |
|
Credit to non-government (in percent of GDP) |
26.8 |
29.9 |
30.9 |
32.0 |
|
32.4 |
32.5 |
32.8 |
33.5 |
34.5 |
35.2 |
|
|
|||||||||||
|
External sector |
(In millions of US dollars) |
||||||||||
|
Current account balance |
-224 |
675 |
708 |
604 |
|
373 |
381 |
427 |
469 |
509 |
545 |
|
(In percent of GDP) |
-6.6 |
19.0 |
18.1 |
14.1 |
|
8.1 |
7.6 |
7.9 |
8.1 |
8.3 |
8.3 |
|
Underlying current account balance 1/ |
-224 |
192 |
298 |
-15 |
|
73 |
69 |
110 |
152 |
194 |
238 |
|
(In percent of GDP) |
-6.6 |
5.4 |
7.6 |
-0.4 |
|
1.6 |
1.4 |
2.0 |
2.6 |
3.2 |
3.6 |
|
External public and publicly guaranteed debt |
2,423 |
2,455 |
2,738 |
2,985 |
|
2,951 |
2,823 |
2,691 |
2,549 |
2,394 |
2,260 |
|
(In percent of GDP) |
71.4 |
68.9 |
69.9 |
69.6 |
|
64.0 |
56.4 |
49.8 |
44.1 |
39.0 |
34.5 |
|
Foreign direct investment |
167 |
187 |
137 |
68 |
|
102 |
120 |
128 |
133 |
135 |
136 |
|
(In percent of GDP) |
4.9 |
5.2 |
3.5 |
1.6 |
|
2.2 |
2.4 |
2.4 |
2.3 |
2.2 |
2.1 |
|
Exports of goods and services (percent change) |
39.7 |
10.0 |
3.6 |
-10.7 |
|
26.7 |
6.8 |
7.8 |
8.3 |
8.3 |
8.3 |
|
Imports of goods and services (percent change) |
60.1 |
-7.1 |
3.4 |
-9.5 |
|
33.8 |
7.1 |
7.6 |
8.1 |
8.2 |
8.3 |
|
Gross official reserves |
578 |
581 |
494 |
338 |
|
393 |
444 |
483 |
527 |
569 |
609 |
|
(In months of next year's imports of goods and services, exc. re-exports) |
5.5 |
5.6 |
3.7 |
2.4 |
|
2.6 |
2.9 |
3.0 |
3.1 |
3.2 |
3.3 |
|
Gross foreign assets of commercial banks |
2,026 |
1,751 |
1,761 |
1,758 |
|
1,809 |
1,826 |
1,855 |
1,690 |
1,688 |
1,675 |
|
(In months of next year's imports of goods and services, exc. re-exports) |
19.3 |
16.8 |
13.1 |
12.6 |
|
12.1 |
11.8 |
11.5 |
10.0 |
9.5 |
9.1 |
|
Exchange rate (DF/US$, end of period) |
177.7 |
177.7 |
177.7 |
177.7 |
|
177.7 |
177.7 |
177.7 |
177.7 |
177.7 |
177.7 |
|
Real effective exchange rate (yearly average, 2010=100) |
96.1 |
… |
… |
… |
|
… |
… |
… |
… |
… |
… |
|
(Change in percent; depreciation -) |
-4.4 |
… |
… |
… |
|
… |
… |
… |
… |
… |
… |
|
|
|
||||||||||
|
Memorandum items |
|
||||||||||
|
Nominal GDP (in millions of Djibouti francs) |
602,971 |
633,187 |
696,160 |
762,621 |
|
819,904 |
889,110 |
960,745 |
1,027,130 |
1,089,802 |
1,165,581 |
|
Nominal GDP (in millions of US dollars) |
3,393 |
3,563 |
3,917 |
4,291 |
|
4,613 |
5,003 |
5,406 |
5,779 |
6,132 |
6,558 |
|
Nominal GDP per capita (US dollars) |
3,385 |
3,506 |
3,804 |
4,114 |
|
4,369 |
4,681 |
5,000 |
5,286 |
5,546 |
5,873 |
|
Population (million) |
1.002 |
1.016 |
1.030 |
1.043 |
|
1.056 |
1.069 |
1.081 |
1.093 |
1.106 |
1.117 |
|
Sources: Djibouti authorities and IMF staff estimates and projections. |
|
||||||||||
|
1/ Current account balance excluding imports and exports associated with re-export activities. |
|
|
|
|
|
|
|
|
|
||
