IMF Staff Country Reports

Eswatini’s economy expanded by 2.8 percent in 2024, driven by manufacturing
and services, while a severe drought kept agricultural output flat. The country faces
pressing needs to close critical gaps in infrastructure and address high unemployment
(34 percent; 58 percent among youth) and high income inequality. While health and
education spending exceed that of peers, outcomes are worse, indicating spending
inefficiencies. A significant skill mismatch also constrains growth. The fiscal deficit was
1.3 percent of GDP in FY24/25, while SACU revenue was 3.9 percent of GDP above the
historical average. Public debt is moderate at just under 40 percent of GDP; however, it
more than doubled during 2014–2020, contributing to ongoing fiscal pressures and
rising debt service costs. Looking ahead, SACU revenues are expected to decline
significantly relative to the past two years, which could further strain the fiscal outlook.
The authorities plan to consolidate over the medium-term to contain public debt to
about 40 percent of GDP over the medium term. Eswatini’s international reserves, at
about 87 percent of the IMF’s Assessing Reserve Adequacy (ARA) metric at
end-2024, are below the recommended level. Banks are well capitalized and liquid;
however, the non-performing loan (NPL) ratio remains elevated.