The International Monetary Fund said Wednesday it had reached a staff-level agreement with the Democratic Republic of Congo on key programme reviews, while warning that ongoing conflict and external shocks continue to weigh on the economy.
The agreement covers the third review of the country’s programme under the Extended Credit Facility and the second review under the Resilience and Sustainability Facility, alongside the completion of the 2026 Article IV consultation.
The deal, reached after IMF staff visited Kinshasa from April 23 to May 6, remains subject to approval by the Fund’s management and Executive Board, with a decision expected in June.
Growth resilient despite shocks
The IMF said economic activity in the DRC has remained robust, with real GDP growth projected above 5.5 percent in both 2025 and 2026.
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Growth has been driven by strong performance in construction, services and agriculture, offsetting a slowdown in the extractive sector, a key pillar of the country’s economy.
The central African nation has also benefited from relatively stable exchange rates and improved external balances, supported by strong mineral export prices.
International reserves rose to $8.8 billion at the end of March 2026, although still slightly below the benchmark of three months of import cover.
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Inflation has remained subdued, staying at or below 2.5 percent year-on-year since October 2025 — well under the central bank’s 7 percent target — though the IMF warned it could rise in the coming months.
Conflict and global pressures weigh
Despite the positive macroeconomic picture, the IMF highlighted significant risks, notably the ongoing conflict in eastern DRC and spillovers from tensions in the Middle East.
The capture of Uvira by AFC/M23 rebels in late 2025 has increased fiscal pressures, with higher spending on security and diplomatic efforts.
As a result, the country exceeded its fiscal deficit ceiling for end-2025 by 0.6 percentage points of GDP, despite strong revenue performance.
Rising global oil prices linked to Middle East tensions have also begun to feed into domestic fuel costs, adding to inflation risks.
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Call for prudent policy
The IMF urged the Central Bank of the Congo to remain cautious after cutting its policy rate twice in 2026, from 17.5 percent to 13.5 percent.
It also called for continued fiscal discipline, including efforts to boost domestic revenue and reduce non-priority spending.
Authorities are preparing a supplementary 2026 budget incorporating corrective measures and new investments financed by proceeds from the country’s first Eurobond issuance.
The IMF welcomed the Eurobond, describing it as a step toward diversifying financing sources, but stressed the importance of transparency and effective use of the funds.
Reforms key to long-term stability
The Fund emphasised that accelerating structural reforms will be critical to strengthening resilience and supporting inclusive growth.
Priority areas include improving public financial management, enhancing transparency in government spending and limiting the use of emergency procedures.
It also called for reforms to strengthen governance, tackle corruption and money laundering, and improve the business climate.
Efforts to modernise public finance systems — including the rollout of a treasury single account and decentralisation of spending controls — were highlighted as positive steps.
On climate-related reforms under the Resilience and Sustainability Facility, the IMF encouraged authorities to maintain momentum, including advancing revisions to the country’s forest code.
Balancing opportunity and risk
The IMF said the DRC faces a delicate balance between maintaining macroeconomic stability and addressing pressing social and security challenges.
It urged the government to increase both the level and quality of social spending while advancing labour market reforms.
While the country’s economic outlook remains broadly positive, the Fund stressed that sustained reform efforts, prudent policies and improved governance will be essential to secure long-term stability.
“The economy remains resilient,” the IMF said, “but continued efforts are needed to safeguard macroeconomic stability and lay the foundations for inclusive growth.”
