Burundi’s economy is showing signs of recovery but remains vulnerable to debt pressures, foreign exchange challenges and weak institutions, the International Monetary Fund said Wednesday after completing its 2026 review of the country.
The IMF Executive Board said growth improved in 2025, reaching 4.2 percent, boosted by stronger coffee and gold exports, while inflation fell sharply from 45 percent in April 2025 to 8.6 percent in April 2026.
The Fund, however, warned that Burundi’s external position remains fragile, with a large current account deficit, limited foreign reserves and an exchange rate that remains significantly overvalued.
“External vulnerabilities remain elevated,” the IMF said, noting that reserves currently cover only about 1.6 months of imports.
The government introduced a Macroeconomic Stabilization Plan in January 2026 aimed at tightening fiscal policy, controlling inflation, reforming the foreign exchange market and supporting structural reforms.
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The IMF said monetary policy has tightened, with central bank financing of the government halted, helping to slow money growth and reduce excess liquidity. But it added that private sector credit has weakened.
Fiscal consolidation efforts, including spending controls and improved tax collection, have also helped, though the Fund warned of risks from revenue shortfalls, weak investment implementation and high domestic financing needs.
Burundi’s public debt declined from 53 percent of gross domestic product in 2024 to 42 percent in 2025, but the IMF said the country remains at high risk of external and overall debt distress.
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Looking ahead, the Fund projected economic growth at 3.9 percent in 2026, with average growth of 4.3 percent between 2027 and 2031, supported by investment in electricity, agriculture, mining and broader economic reforms.
Inflation is expected to rise to 14.5 percent in 2026 before easing gradually, while stronger exports and foreign investment could help increase reserves to 2.8 months of imports by 2031.
IMF directors welcomed Burundi’s stabilization efforts but urged authorities to maintain fiscal discipline, continue tightening monetary policy and implement foreign exchange reforms carefully.
They also called for stronger governance, improved oversight of state-owned enterprises and reforms in agriculture, mining and the electricity sector to support inclusive growth.
The Fund warned that risks remain tilted to the downside, including possible fiscal pressures ahead of the 2027 elections, weaker export prices and higher fuel and fertilizer costs.
