IMF Staff Concludes 2026 Article IV Consultation Mission to Somalia

IMF News, October 5, 2026

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IMF staff projects Real GDP growth of 2.3 percent in 2026, gradually recovering to 2.7 percent in 2027, and to 4 percent over the medium term. (IMF staff statement)
Inflation is projected to reach 6.5 percent in 2026. (IMF staff statement)
Remittance inflows remain resilient and provide an important source of household income and foreign exchange, but the external position remains vulnerable. (IMF staff statement)
Near-term risks identified as high include more severe climate shocks, renewed regional conflict, further aid retrenchment, and domestic challenges. Sustained donor support is emphasized as critical if downside risks materialize. (IMF staff statement)

IMF staff projects an overall fiscal deficit of 0.9 percent of GDP for 2026. (IMF staff projection)
With conservative assumptions of budget support grants, IMF staff projects an overall fiscal deficit of 0.5 percent of GDP for 2027. (IMF staff projection)
Fiscal performance notes:
- Sustained spending discipline has helped contain the fiscal deficit.
- Domestically financed social spending has been implemented in line with expectation. (IMF staff statement)

Near-term policies should focus on preserving macroeconomic stability. (IMF staff recommendation)
Key near-term revenue measures recommended:
- Enhancing customs and income tax enforcement.
- Harmonizing sales tax across the federal government and member states.
- Raising non-tax revenues. (IMF staff recommendation)
Authorities are encouraged to accelerate revenue reforms to achieve the objective of fully covering operational expenditure by domestic revenues in the near term. (IMF staff recommendation)
Public financial management progress:
- A comprehensive action plan for 2026-30 is being finalized.
- Authorities should further prioritize reform measures to align with implementation capacity.
- Near-term priorities include strengthening expenditure controls, managing fiscal risks associated with public-private partnership projects, and implementing multi-annual commitment controls. (IMF staff recommendation)
Efforts to further improve debt management and transparency are underway. (IMF staff statement)
Preparation work to launch a competitive licensing round for the petroleum sector is advancing. (IMF staff statement)

The Central Bank of Somalia (CBS) is making steady progress in strengthening financial supervision and inclusion. (IMF staff statement)
Continued efforts needed to:
- Safeguard financial stability.
- Enhance payment-system oversight.
- Improve financial infrastructure to facilitate access to finance. (IMF staff recommendation)
Strengthening the framework for anti-money laundering and combating the financing of terrorism is described as critical to safeguard financial integrity and facilitate new correspondent banking relationships. (IMF staff recommendation)
The currency reform remains a national priority and should proceed carefully once key prerequisites are in place. (IMF staff recommendation)

Guided by the 2025-29 National Transformation Plan, recommended reform priorities include:
- Implementing high-impact governance reforms.
- Improving the business environment and access to finance.
- Strengthening trade integration and supporting greater domestic value addition and export diversification.
- Ensuring sound governance and operation of the Somali Development and Reconstruction Bank to facilitate financial access by underserved productive sectors. (IMF staff recommendation)
Sustained investment priorities:
- Investment in education.
- Investment in climate resilience. (IMF staff recommendation)
Continued improvements in the quality, coverage, and timeliness of economic and financial statistics are highlighted as important. (IMF staff recommendation)