MPO 04/2025 Sub-Saharan Africa MACRO POVERTY OUTLOOK Country-by-country Analysis and Projections for the Developing World © 2025 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclu- sions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. All queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. Angola Ethiopia Niger Benin Gabon Nigeria Botswana Gambia, The Rwanda Burkina Faso Ghana São Tomé and Príncipe Burundi Guinea Senegal Cabo Verde Guinea-Bissau Seychelles Cameroon Kenya Sierra Leone Central African Republic Lesotho Somalia Chad Liberia South Africa Comoros Madagascar South Sudan Congo, Democratic Rep. Malawi Sudan Congo, Republic Mali Tanzania Côte d’Ivoire Mauritania Togo Equatorial Guinea Mauritius Uganda Eritrea Mozambique Zambia Eswatini Namibia Zimbabwe Sub-Saharan Africa Macro Poverty Outlook / April 2025 1 This outlook reflects information available as of April 10, 2025. 1 2 ANGOLA Population Poverty million millions living on less than $2.15/day 37.9 9.7 3 4 Life expectancy at birth School enrollment Angola’s economy grew strongly in 2024, driven by non-oil years primary (% gross) activities. Lower oil prices are projected to weigh on short- term growth. Limited infrastructure and human capital 61.9 86.7 5 6 continue to constrain growth potential. With subdued GDP GDP per capita employment and income growth, the poverty rate is current US$, billion current US$ projected to reach 36 percent. High risks, notably on the fiscal side, result from oil dependency and increased 96.7 2551.3 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2018 (2017 PPPs). 3/ 2022. global uncertainty from recent trade policy shifts. 4/ 2022. 5/ 2024. 6/ 2024. The macro-institutional framework hinders private sector growth Key conditions and challenges and job creation due to weak rule of law. Fiscal expansion during the oil boom translated in rising debt, crowding out spending on From 2002 to 2014, Angola experienced strong oil-led infrastructure and human capital, and undermining productivity growth. With the lack of economic diversification, the drop growth. Poor public expenditure efficiency did not support the in oil prices from 2014 to 2016 led to a five-year re- economy and fiscal policy remained procyclical. Angola is also cession, worsened by the COVID-19 pandemic. Although vulnerable to climate shocks. the country has returned to growth since 2021, support- ed by sound policies and a favorable environment, Ango- Transforming the economy to create jobs is key to unleashing the la's economy remains undiversified, with oil accounting for country's potential, boosting productivity, reducing poverty, and about 30 percent of GDP. strengthening economic resilience. The development of the Lobito Corridor would accelerate economic diversification and promote The oil-based growth model failed to reduce poverty sustain- regional integration, provided it is supported by comprehensive ably. In 2018, about one-third of Angolans lived below the in- structural reforms. ternational poverty line ($2.15/day). Inequality is also high, with a Gini index of 0.51 and human capital is low, with an in- dex of 0.36. Job opportunities in the formal sector are scarce, Recent developments disproportionally affecting young people and women. National estimates indicate that the unemployment rate has remained Real GDP grew by 4.4 percent in 2024, the largest expansion since above 30 percent for several years, and about 80 percent of 2015. It was driven by commerce and transport services, diamonds jobs are informal. extraction, the oil industry, and fishing. The labor market remained FIGURE 1 / Contribution to potential GDP growth FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 12 90 70000 10 80 60000 8 70 50000 60 6 40000 50 4 30000 40 2 20000 30 0 20 10000 -2 10 0 -4 0 -10000 2000 2003 2006 2009 2012 2015 2018 2021 2024 2027 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 International poverty rate Lower middle-income pov. rate TFP Capital Labour Potential Upper middle-income pov. rate Real GDP pc Source: World Bank staff estimates. Source: World Bank. Notes: See footnotes in table on the next page. 2 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. stable, with national estimates showing a slight increase in the un- employment rate from 30 percent in Q3 2022 to 30.8 percent in Outlook Q3 2024, while the labor force participation rate saw a modest in- crease from 89.4 percent to 89.7 percent. Growth is projected to slow to 2.7 percent in 2025 as lower global oil prices than projected in the budget are expected to translate in Inflation surged to 27.5 percent in 2024, driven by a rise in food reduced fiscal spending. Medium-term growth is projected around costs and diesel price. The central bank responded by raising the 2.9 percent annually, driven by the non-oil sector. Given the grow- main interest rate to 19.5 percent (+1.5 percentage points). The ing working age population, the unemployment rate is expected to growth of the credit to the private sector stagnated at 0.3 percent remain high. in real terms. The central bank is expected to keep monetary policy tight. Infla- The current account surplus rose to 6.7 percent of GDP support- tion is projected to slow but will remain high, averaging 18.7 per- ed by lower fuel imports and slightly higher oil exports. The ser- cent over 2025-2027, driven by the fuel subsidy reform, including a vices and primary income account deficits improved due to low- 50 percent diesel price hike in March 2025. Subdued employment er oil-related services expenses and lower interest payment on and income growth are expected to hinder poverty reduction. The external debt. Gross international reserves increased to US$15.7 poverty rate is forecasted to reach about 36 percent by 2027, high- billion in 2024, covering about 8.3 months of imports. The Kwan- lighting the need for strong social safety nets and increased invest- za depreciated by 10 percent against the US dollar in 2024 com- ment in human capital. pared to 65 percent in 2023. The real exchange rate appreciated by 16.7 percent. The current account surplus is expected to decline due to reduced oil exports. Gross international reserves are expected to remain Public finances deteriorated slightly compared to 2023. Total rev- comfortable. However, high debt service costs over the next two enue is estimated at 21.5 percent of GDP in 2024 from 21.1 years will continue to weigh on the foreign exchange market. percent, mainly due to higher oil revenue. Non-interest expendi- ture is estimated to have increased to 16.9 percent of GDP from The approaching political cycle presents risks for fiscal consolida- 13.7 percent, driven by higher payroll and goods and services tion. The fiscal deficit is projected to deteriorate to around 2.2 per- expenses, slightly offset by a reduction in subsidies and public cent of GDP in the medium term, with public debt projected at investment. The non-oil primary deficit increased to 7.8 percent around 72.4 percent of GDP. from 6.3 percent. The fiscal balance shifted from a surplus of 1.3 percent to a deficit of 1.5 percent of GDP. Public debt fell The outlook remains highly uncertain due to trade policy shifts. In to 70.9 percent of GDP, down from 89 percent in 2023 due to particular, the impact of commodity price decline may compound higher nominal GDP growth. the potential effects of trade uncertainty. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f 1 Real GDP growth, at constant market prices 3.0 1.0 4.4 2.7 2.6 3.2 Private consumption 4.0 3.1 6.2 7.3 4.4 4.0 Government consumption 8.4 -36.7 -1.9 2.8 3.1 3.9 Gross fixed capital investment 8.5 -5.3 7.2 3.7 3.8 3.9 Exports, goods and services 3.3 -6.2 5.0 -5.2 -2.8 0.2 Imports, goods and services 26.1 -6.8 -6.2 5.4 2.7 2.7 Real GDP growth, at constant factor prices 3.1 0.6 4.4 2.7 2.6 3.2 Agriculture 3.9 2.7 4.3 4.6 5.0 5.0 Industry 1.8 -1.0 4.5 1.1 0.2 2.0 Services 4.2 1.8 4.4 3.8 4.4 3.9 Employment rate (% of working-age population, 15 years+) 64.6 64.7 65.1 65.1 65.1 65.1 Inflation (consumer price index) 21.4 13.6 28.2 25.0 18.0 12.2 Current account balance (% of GDP) 10.4 4.6 6.7 1.0 2.0 2.4 Net foreign direct investment inflow (% of GDP) -5.9 -2.4 -1.8 -1.3 -0.9 -0.8 Fiscal balance (% of GDP) 6.5 1.3 -1.5 -2.1 -2.2 -2.2 Revenues (% of GDP) 27.7 21.1 21.5 22.3 21.7 21.7 Debt (% of GDP) 69.5 88.7 70.9 72.2 74.4 72.4 Primary balance (% of GDP) 10.6 7.2 4.4 3.0 2.7 2.6 2,3 International poverty rate ($2.15 in 2017 PPP) 35.4 35.9 35.6 35.7 35.8 35.7 2,3 Lower middle-income poverty rate ($3.65 in 2017 PPP) 57.7 58.3 57.9 58.0 58.1 58.0 2,3 Upper middle-income poverty rate ($6.85 in 2017 PPP) 81.4 81.6 81.4 81.5 81.6 81.5 GHG emissions growth (mtCO2e) -0.8 -0.4 -0.1 0.0 0.0 9.8 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ This macro-framework is using the national accounts in base year 2002. New national account statistics with 2015 as base year are under preparation. 2/ Calculations based on 2018-IDREA. Projection using neutral distribution (2018) with pass-through = 0.7 (Low (0.7)) based on GDP per capita in constant LCU. 3/ Actual data: 2018. Nowcast: 2019-2024. Forecasts are from 2025 to 2027. Macro Poverty Outlook / April 2025 3 This outlook reflects information available as of April 10, 2025. 1 2 BENIN Population Poverty million millions living on less than $3.65/day 14.5 6.0 3 4 Life expectancy at birth School enrollment In 2024, economic activity grew by 7.5 percent, boosted by years primary (% gross) strong performance across all sectors. Inflation fell to 1.2 percent and the lower middle-income poverty rate de- 60.0 113.0 5 6 creased by 2.8 percentage points to 38.5 percent. Benin GDP GDP per capita met the 3 percent WAEMU fiscal deficit target and debt current US$, billion current US$ declined to 53.4 percent of GDP in 2024. Key risks include worsening security in the north and climate shocks amid 21.6 1495.2 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2021 (2017 PPPs). 3/ 2022. rising global uncertainties. 4/ 2022. 5/ 2024. 6/ 2024. domestic debt is critical for debt sustainability, as external debt Key conditions and challenges breaches high-risk thresholds in stress tests. The Benin economy adapted well to shocks, growing on average by 5.9 percent per year during 2020–2023, 3.7 percentage points Recent developments above the Sub-Saharan Africa average. The resilience of Benin’s economy is derived from ongoing diversification of the agri- Despite persistent regional security challenges spreading across cultural sector, development of agro-industries, tourism, and the northern part of Benin and trade uncertainties, GDP growth strong macroeconomic management. Improved fiscal space dur- reached 7.5 percent in 2024 (4.9 percent per capita), up from 6.4 ing 2017-19 allowed the government to implement countercycli- percent in 2023. The services sector, the major growth driver, was cal fiscal policy supporting the 2021–2026 government action boosted by trade, tourism and other services. Port activities in- plan. While the informal sector has served as a shock absorber, creased by 119 percent in December 2024, year-on-year due to particularly during border closures, it also hinders productivity rising exports (three-fold increase in tonnage) and recovering im- growth and revenue mobilization. ports. Rising agro-industries along with strong agriculture output also supported growth. The construction sector remains dynamic Despite increased revenue mobilization, a tax revenue to with the development of the Glo-Djigbé Industrial Zone and PAG-2 GDP ratio of 12.9 percent (in 2023) remains low compared projects. On the demand side, rising exports and private invest- to peers. High structural inequalities limit the poor’s ability ment, bolstered growth. Private consumption also contributed, in to benefit from growth. Amidst rising fragility in the north, line with subsiding inflation. boosting growth's impact on poverty reduction is crucial. Pre- serving macroeconomic gains while enhancing productivity and Inflation averaged 1.2 percent in 2024, down from 2.8 percent in create more high-quality jobs is vital. Fiscal consolidation has re- 2023 due to moderating energy and transport prices. Food price duced debt accumulation, but rebalancing its composition towards inflation doubled to 0.8 percent in 2024 but remained below FIGURE 1 / Fiscal conditions FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent of GDP Percent of GDP Poverty rate (%) Real GDP per capita (constant LCU) 25 2 100 1000000 90 900000 20 80 800000 0 70 700000 15 60 600000 -2 50 500000 10 40 400000 30 300000 -4 20 200000 5 10 100000 0 0 0 -6 2011 2013 2015 2017 2019 2021 2023 2025 2027 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 International poverty rate Lower middle-income pov. rate Budget deficit (rhs) Revenues (lhs) Expenditures (lhs) Upper middle-income pov. rate Real GDP pc Source: World Bank. Source: World Bank. Notes: See footnotes in table on the next page. 4 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. headline inflation. The lower middle-income poverty rate ($3.65 in 2017 PPP) declined by 2.9 ppts to 38.4 percent in 2024, support- Outlook ed by dynamic economic activities and fall in inflation. The West African Economic and Monetary Union (WAEMU) inflation rate de- Economic growth is expected to average 7.1 percent during clined further in 2024 to 3.5 percent but remained above the 1–3 2025–2027. Secondary sector activity is projected to rise by 9.1 per- percent WAEMU target band. Regional foreign reserves increased cent, supported by the final PAG2 projects, notably construction from 3.5 months of imports in 2023 to 4.7 months in 2024, re- and agro-industries. Investments in transit services, and normaliz- flecting the resumption of international bond issuances, and IMF ing trade relations with neighbors, along with rising tourism and and World Bank disbursements. The Central Bank of West African telecom sectors, will boost services. Agriculture is expected to grow States kept its policy interest rates unchanged throughout 2024 by 6.2 percent, due to productivity enhancing reforms. Strong at 3.5 percent for liquidity calls and 5.5 percent for the marginal growth across sectors is anticipated to drive poverty reduction with lending facility. the lower middle-income poverty rate expected to decline to 30.3 percent by 2027. Inflation is projected to rise to 1.5 percent but The fiscal deficit declined to 3.0 percent of GDP in 2024, driven by remaining below the WAEMU target. The average regional infla- a 1.2 ppt of GDP decline in capital expenditures between 2023 and tion rate is expected to align with the WAEMU target band from 2024 and a 0.3 ppt of GDP increase in tax revenues to 13.2 percent 2025 onwards, while regional reserves are projected to rise to 5.4 of GDP. Debt declined to 53.4 percent of GDP in 2024, though ex- months of imports in 2025, supported by recovering exports, and ternal debt continues to rise, accounting for 72.6 percent of total lower Euro Area interest rates. debt. Although financing conditions in the WAEMU market remain tight, successful issuances of US-dollar denominated Eurobonds in The fiscal deficit is projected to remain below the 3 percent of February 2024 (US$ 750 million) and January 2025 (US$ 500 mil- GDP WAEMU criteria over 2025–27, reducing debt accumulation. lion), and a Euro 500 million commercial loan, supporting the Gov- With the completion of key investment projects, rising exports, ernment’s Liability Management Operations, are expected to im- and tourism, the CAD is expected to narrow to 4.3 percent by prove the debt profile. The proceeds also contributed to covering 2027. The CAD will be financed by foreign direct investment (FDI) the financing needs and the current account deficit (CAD), which and external public debt (Eurobond and project loans). The out- narrowed to 7.0 percent of GDP due to rising exports of cotton, and look is tilted to the downside due to security challenges, and agro-processed products. Credit to the non-financial private sector climate issues. Additionally, uncertainty in trade policy could im- and to the public sector moderated. Net non-performing loans in- pact investment and growth, slowing down the development of creased from 1.2 percent at end-2023 to 1.9 percent at end-2024 the industrial zone and the commencement of production by with the provisioning rate falling by 20.6 ppts to 54.7 percent. new export firms. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 6.3 6.4 7.5 7.2 7.1 7.0 Private consumption 5.8 6.0 5.0 3.9 4.0 4.1 Government consumption 3.5 0.5 1.1 15.7 8.3 10.1 Gross fixed capital investment -8.0 15.8 10.6 10.1 9.9 9.6 Exports, goods and services 14.5 4.3 4.4 6.2 7.3 7.7 Imports, goods and services -4.6 10.4 -0.8 4.1 3.1 4.6 Real GDP growth, at constant factor prices 6.0 6.3 7.5 7.2 7.1 7.0 Agriculture 4.8 5.1 5.9 6.2 6.2 6.3 Industry 7.9 7.3 9.7 9.5 9.1 8.8 Services 6.0 6.6 7.5 7.0 6.8 6.8 Employment rate (% of working-age population, 15 years+) 61.5 61.8 61.8 61.8 61.8 61.8 Inflation (consumer price index) 1.4 2.8 1.2 1.5 1.5 1.5 Current account balance (% of GDP) -5.7 -8.2 -7.0 -6.1 -4.9 -4.3 Net foreign direct investment inflow (% of GDP) 1.9 2.2 2.0 1.9 1.8 1.9 Fiscal balance (% of GDP) -5.5 -4.1 -3.0 -2.9 -2.9 -2.9 Revenues (% of GDP) 14.3 15.0 15.0 15.3 15.5 15.9 Debt (% of GDP) 54.2 54.5 53.4 51.3 49.7 48.3 Primary balance (% of GDP) -3.9 -2.6 -1.2 -1.2 -1.2 -1.3 1,2 International poverty rate ($2.15 in 2017 PPP) 12.6 12.1 10.9 9.5 8.0 7.1 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 43.2 41.3 38.5 36.2 33.0 30.3 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 81.2 79.5 77.3 74.8 71.6 69.0 GHG emissions growth (mtCO2e) -4.0 -2.0 0.6 1.9 2.3 2.4 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2021-EHCVM. Actual data: 2021. Nowcast: 2022-2024. Forecasts are from 2025 to 2027. 2/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 5 This outlook reflects information available as of April 10, 2025. 1 2 BOTSWANA Population Poverty million millions living on less than $2.15/day 2.5 0.3 3 4 Life expectancy at birth School enrollment Botswana’s GDP contracted by 3.0 percent in 2024, primarily years primary (% gross) due to the weak global diamond market. The fiscal deficit is set to reach 9.2 percent of GDP amid eroded fiscal buffers. 65.9 96.9 5 6 GDP growth is projected at 0.6 percent in 2025, driven by a GDP GDP per capita gradual recovery in the diamond market and infrastructure current US$, billion current US$ investment. Risks are substantial on both the international and domestic fronts. Poverty is projected at 14 percent at 17.1 6789.1 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2015 (2017 PPPs). 3/ 2022. the $2.15 international poverty line. 4/ 2022. 5/ 2024. 6/ 2024. to enlarge markets, improve the business environment, attract in- Key conditions and challenges vestment, promote fiscal efficiency and stimulate innovation. Im- proving agricultural resilience and sustainability is also essential Botswana's historical economic success has been largely associat- as this sector employs about 9.6 percent of the labor force (or 18 ed with the discovery of diamonds in the 1960s, which transformed percent when subsistence farmers are included). Addressing high the nation, providing a solid foundation for growth and develop- poverty and income inequality through job creation is critical for ment. Effective, prudent, and transparent policies contributed to long-term stability. Strengthening regional integration and trade political stability, low levels of corruption, and strong fiscal disci- partnerships can open opportunities for Botswana's exports. pline. Significant investments led to the modernization of the coun- try’s infrastructure, while the allocation of public resources toward education and healthcare contributed to improvements in human Recent developments capital. Poverty declined from 29.1 percent in 2002/03 to 15.4 per- cent in 2015/16 based on the $2.15 per day international poverty Due to a sharp contraction in the global demand for diamonds, line (IPL), using 2017 purchasing power parity (PPP) prices. Despite the economy contracted by 3.0 percent in 2024, in contrast to 3.2 these achievements, Botswana’s limited economic diversification percent growth in 2023.Mining contracted by 24.1 percent whilst creates significant challenges that intensified in 2024. Weaknesses the value of diamond inventories reached about US$2 billion in De- in global diamond markets, have posed risks to the country’s fiscal cember 2024, the highest since the 2008 Global Financial Crisis. In and external positions, and more frequent climate shocks have im- February 2025, Botswana renewed its deal with De Beers covering pacted the agriculture sector, affecting rural livelihoods. the allocation of rough diamonds from Debswana for sale, and the establishment of the Diamonds for Development Fund to support As diamonds currently provide almost 90 percent of Botswana’s economic diversification. That is expected to provide some stabil- export revenues, economic diversification beyond diamonds ity and predictability to the diamond sector, although the recent would mitigate risks. Reforms are needed to enhance connectivity contraction in diamond markets is believed to be structural rather FIGURE 1 / The Fiscal position has deteriorated FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent of GDP Percent of GDP Poverty rate (%) Real GDP per capita (constant LCU) 50 8 70 90000 60 80000 40 4 70000 50 30 0 60000 40 50000 20 -4 30 40000 30000 10 -8 20 20000 10 10000 0 -12 0 0 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 International poverty rate Lower middle-income pov. rate Revenues (lhs) Expenditure (lhs) Fiscal balance (rhs) Upper middle-income pov. rate Real GDP pc Sources: Ministry of Finance and World Bank staff estimates. Source: World Bank. Notes: See footnotes in table on the next page. 6 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. than just cyclical. The unemployment rate increased to 27.6 per- The growth projection in 2025 is underpinned by the weak cent (2024Q1), and poverty is projected to increase to 13.7 percent prospects in the global diamond markets, an increase in cop- in 2024 under the $2.15 poverty line (2017 PPP). per production, and additional power generation from the new IPP contracts under the renewable energy drive. Poverty is pro- Headline inflation averaged 2.8 percent in 2024, below the 3-6 per- jected to remain high at 14 percent (around 358,000 people) cent objective range, and the policy rate, at 1.9 percent, remains in 2025 based on the $2.15 per day IPL (2017 PPP) given neg- significantly below the average among SACU countries. In December ative GDP per capita growth and the low labor intensity of the 2024, the Primary Reserve Requirement (PRR) was reduced from 2.5 sources of growth. percent to 0 percent to encourage credit expansion by banks. The fiscal deficit in FY25/26 is projected to narrow to 8.5 percent of Foreign exchange reserves decreased from US$4.8 million in No- GDP, and to decline gradually thereafter. Public debt ratio is pro- vember 2023 to US$3.9 million in November 2024, but remain ade- jected to rise to 39.7 percent of GDP in 2025, just below the 40 per- quate, at 7.2 months of import cover. The current account deficit is cent debt ceiling. Unless fiscal deficits are reduced, there is a risk estimated at 4.2 percent of GDP in 2024. that the debt limit may be breached. The government plans to im- prove fiscal efficiency including through targeted tax policy adjust- The fiscal deficit in FY24/25 is estimated at 9.2 percent of GDP, as ments, better screening, selection and management of projects, expenditure has surged by 7.5 percent of GDP over the last two and improvement of procurement processes. years, and diamond revenues have disappointed (down by 50.7 percent in 2024/25), albeit partially offset by higher SACU revenues. Inflation is projected to remain within the Central Bank’s objective The gross debt ratio peaked at about 35.3 percent of GDP, and do- range. But risks are tilted to the upside, exacerbated by geopolitical mestic debt increased from 8.7 percent in 2019 to 18 percent of tensions and potential hikes in energy prices. GDP in 2024. The level of public debt remains below the 40 percent limit, but the Government Investment Account, an important fiscal The outlook remains uncertain and depends largely on the dia- buffer, has been nearly depleted. mond market's trajectory, which may be affected by a slowdown in major trade partners, volatile commodity prices, and changes in advanced economies’ trade policies. Other risks to the recov- Outlook ery include climate-related disruptions in agriculture, and wors- ening fiscal pressures. Inadequate structural reforms may under- Real GDP growth is projected to rebound to 0.6 percent in mine Botswana’s capacity to reduce poverty and inequality and 2025, and converge to around 4.0 percent in the medium term. withstand future shocks. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f 1 Real GDP growth, at constant market prices 5.6 3.2 -3.0 0.6 4.2 3.8 Private consumption 3.0 5.6 1.9 2.9 3.2 3.0 Government consumption 2.5 4.8 7.3 2.3 1.2 1.4 Gross fixed capital investment 0.3 4.2 16.4 -10.8 1.2 1.2 Exports, goods and services -5.4 -12.4 -10.4 -26.6 16.6 9.9 Imports, goods and services -11.7 -7.1 12.3 -25.0 6.5 3.1 Real GDP growth, at constant factor prices 5.9 2.8 -3.0 0.6 4.2 3.8 Agriculture 1.2 1.8 -0.3 3.1 1.4 1.4 Industry 7.7 2.3 -13.5 20.9 2.8 2.9 Services 5.0 3.2 3.6 -10.3 5.3 4.5 Inflation (consumer price index) 12.2 5.1 2.8 4.0 5.0 5.0 Current account balance (% of GDP) -1.2 -0.6 -4.2 -3.9 -3.0 -2.4 Net foreign direct investment inflow (% of GDP) 2.9 3.4 0.7 0.6 0.6 0.5 2 Fiscal balance (% of GDP) -1.9 -4.2 -9.2 -8.5 -7.8 -7.2 Revenues (% of GDP) 28.5 28.1 25.5 24.9 24.8 24.6 3 Debt (% of GDP) 20.4 22.5 35.3 39.7 38.9 37.8 2 Primary balance (% of GDP) -1.2 -3.2 -8.2 -7.0 -6.0 -5.1 4,5 International poverty rate ($2.15 in 2017 PPP) 13.2 12.7 13.7 14.0 13.5 13.0 4,5 Lower middle-income poverty rate ($3.65 in 2017 PPP) 34.5 33.9 35.4 35.8 35.0 34.2 4,5 Upper middle-income poverty rate ($6.85 in 2017 PPP) 60.9 60.4 61.5 61.9 61.1 60.8 GHG emissions growth (mtCO2e) 0.2 -1.1 -4.1 0.3 1.5 2.0 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ The projections presented in this report reflect revised diamond production volumes. The updated figures are based on the most recent production data and industry assessments available at the time of publication. 2/ Fiscal balances are reported in fiscal years (April 1st -March 31st). 3/ Refers to Public and Publicly Guaranteed debt. 4/ Calculations based on 2015-BMTHS. Actual data: 2015/16. Nowcast: 2017-2024. Forecasts are from 2025 to 2027. 5/ Projection using neutral distribution (2015) with pass-through = 0.7 (Low (0.7)) based on GDP per capita in constant LCU. Macro Poverty Outlook / April 2025 7 This outlook reflects information available as of April 10, 2025. 1 2 BURKINA FASO Population Poverty million millions living on less than $2.15/day 23.5 5.6 3 4 Life expectancy at birth School enrollment In 2024, GDP growth is estimated at 4.9 percent (2.5 percent years primary (% gross) per capita), driven by services and agriculture. This led to a lower extreme poverty rate at 23.2 percent, despite inflation 59.8 72.3 5 6 at 4.2 percent. Growth is projected to be lower in 2025 and GDP GDP per capita gradually strengthen to 5.0 percent by 2027 assuming con- current US$, billion current US$ tinued improvement in security conditions. This outlook is subject to downside risks from security threats, climate 24.2 1027.1 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2021 (2017 PPPs). 3/ 2022. shocks, debt roll-over, and financial sector challenges. 4/ 2023. 5/ 2024. 6/ 2024. On January 29, 2025, Burkina Faso formally exited Economic Key conditions and challenges Community of West African States (ECOWAS) along with Mali and Niger, following a joint withdrawal announcement in January 2024 Burkina Faso’s economy remains undiversified and vulnerable to and unsuccessful mediation efforts. The three countries, forming insecurity, climate, and commodity shocks. The economic land- the Confederation of Sahel States (AES), have replaced the ECOW- scape is dominated by low-productivity services; rain-fed agricul- AS passport with their own unified passport. However, Burkinabe ture, which is highly sensitive to weather conditions; and gold citizens and businesses retain access to key ECOWAS member- mining, which represents 80 percent of exports and attracts most ship benefits, including the free movement of people and goods, of inward FDI. Export diversification is constrained by weak pro- pending further decisions. The authorities have reiterated Burki- ductivity, and low human capital, leaving the country vulnerable na Faso’s intention to remain in the West African Economic and to shifts in international trade policy. Monetary Union (WAEMU). The security crisis continues to hinder economic growth, im- pacting particularly rural areas and the mining sector, de- Recent developments spite some improvement in 2024. Fatalities, as recorded by the Armed Conflict Location and Event Data (ACLED) de- GDP growth increased to 4.9 percent in 2024 (2.5 percent creased by 12 percent, and incidents dropped by 26 percent, per capita). On the supply side, services remained the key compared to 2023, which saw a peak in violence. This led growth driver, contributing 3.1 percentage points (pp) to to improved access to agricultural lands and enabled the overall GDP growth. This was partly due to strong growth reopening of some mines after two years of suspension. in public administration services, which account for 22 Nevertheless, industrial gold output has further declined. percent of the economy. Services growth was also sup- Additionally, donor support is expected to remain low in ported by improved security, which spurred retail, trade, the medium term. and repair services. FIGURE 1 / Real GDP growth and supply-side contributions to real FIGURE 2 / Actual and projected poverty rates and real GDP per GDP growth capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 6 100 600000 5 90 500000 4 80 3 70 400000 2 60 1 50 300000 0 40 200000 -1 30 -2 20 100000 -3 10 2022 2023 2024e 2025f 2026f 2027f 0 0 Agriculture Industry 2022 2023 2024 2025 2026 2027 Services Net taxes on production International poverty rate Lower middle-income pov. rate Real GDP growth Upper middle-income pov. rate Real GDP pc Sources: National Bureau of Statistics and World Bank staff estimates. Source: World Bank. Notes: See footnotes in table on the next page. 8 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. Agriculture contributed 1.9 pp to GDP growth in 2024, supported by favorable weather, expanded cultivated areas, rapid lowland de- Outlook velopment boosting rice production, improved land access in some conflict-affected areas, and more effective government support, Following a year of above average agricultural output growth, including timely provision of improved seeds, fertilizers, and free GDP growth is projected to be lower in 2025 at 4.3 percent and plowing services. In contrast, the secondary sector subtracted from gradually rise to 5.0 percent by 2027, assuming sustained se- growth, due to a drop in gold production caused by insecurity (e.g., curity improvements, average climate conditions, and a stable closure of the Boungou mine). policy environment. Gold production is projected at 56 tons in 2025, 64 tons in 2026, and 65 tons in 2027, boosting exports The current account deficit (CAD) narrowed to 6.4 percent of and reducing the CAD. The exit from ECOWAS is expected to GDP, due to a sharp rise in gold prices that outpaced the pro- have limited economic impact. Shifts in international trade policy duction drop. Inflation rose to 4.2 percent, driven by insecuri- impact Burkina Faso mainly indirectly through changes in gold ty and logistical constraints, coupled with price speculation due and oil prices. to a late start of the rainy season. Despite the higher inflation, strong growth in agriculture and services led the projected ex- The government remains committed to fiscal consolidation, but treme poverty rate to fall by 3 pp to 23.2 percent. Poverty reduc- expenditure needs will remain high. Public debt as a share of tion was broad-based but stronger in rural areas as food price GDP is anticipated to slowly trend downward. The regional infla- inflation matters less for farmers. tion rate is expected to align with the WAEMU target band from 2025 onwards (including for Burkina Faso), while re- WAEMU inflation fell to 3.5 percent in 2024 but remained above gional reserves are projected to rise to 5.4 months of im- the target band of 1–3 percent. Regional foreign reserves increased ports in 2025, supported by recovering exports and lower from 3.5 months of imports in 2023 to 4.7 months in 2024, reflect- Euro Area interest rates. ing the resumption of international bond issuances, IMF, and World Bank disbursements. The Central Bank of West African States Moderate growth projections and expected lower inflation should maintained its policy rates at 3.5 percent for liquidity calls and 5.5 contribute to continuing poverty reductions of about 1 percentage percent for the marginal lending facility. point per year. With high population growth, the decrease in the number of poor is very limited, with more than 5.5 million Burkin- The fiscal deficit improved to 5.6 percent of GDP, driven by lower abes expected to remain poor. expenditure on public wages (-0.4 pp) and subsidies (-0.3 pp) amid robust revenue mobilization. The deficit was predominantly fi- Downside risks to the outlook include a reversal of security gains, nanced by domestic borrowing from the regional market, where climate shocks, debt roll-over, financial sector challenges, and ad- Burkina faced a significant surge in interest rates exceeding 9 per- verse international dynamics. On the upside, reforms to improve cent for 12-month bills. While debt roll-over is high, the risk of debt the investment climate for private sector companies, especially in distress remains moderate. energy, could lift the growth potential. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 1.5 3.0 4.9 4.3 4.7 5.0 Private consumption 4.4 5.0 5.8 4.4 6.1 6.3 Government consumption 5.2 4.5 11.6 5.3 2.4 3.6 Gross fixed capital investment 4.2 8.9 8.7 4.8 2.8 2.3 Exports, goods and services -2.8 -2.2 -3.1 2.0 2.6 2.7 Imports, goods and services 8.2 9.0 7.5 4.2 3.5 3.3 Real GDP growth, at constant factor prices 0.7 3.3 4.9 4.3 4.7 5.0 Agriculture 5.5 1.1 11.0 2.9 3.9 4.4 Industry -8.0 2.2 -2.8 3.0 2.4 2.3 Services 4.2 4.6 6.6 5.5 6.0 6.5 Inflation (consumer price index) 14.1 0.7 4.2 3.0 2.5 2.0 Current account balance (% of GDP) -7.2 -8.0 -6.4 -5.8 -5.3 -4.9 Net foreign direct investment inflow (% of GDP) 3.4 1.9 1.2 1.1 1.0 0.9 Fiscal balance (% of GDP) -10.3 -6.5 -5.6 -4.7 -3.8 -3.6 Revenues (% of GDP) 20.9 21.4 21.4 21.3 21.4 21.3 Debt (% of GDP) 56.4 54.0 54.9 54.4 53.7 52.7 Primary balance (% of GDP) -8.3 -4.2 -3.6 -2.7 -1.6 -1.2 1,2 International poverty rate ($2.15 in 2017 PPP) 26.4 26.2 23.2 21.4 19.8 19.1 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 62.5 61.3 58.0 55.7 54.3 52.8 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 88.9 88.2 86.5 85.0 84.0 83.1 GHG emissions growth (mtCO2e) 3.5 3.9 4.1 4.1 4.1 4.1 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2021-EHCVM. Actual data: 2021. Nowcast: 2022-2024. Forecasts are from 2025 to 2027. 2/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 9 This outlook reflects information available as of April 10, 2025. 1 2 BURUNDI Population Poverty million millions living on less than $2.15/day 14.0 7.8 3 4 Life expectancy at birth School enrollment Real GDP growth reached 3.5 percent in 2024, up from 2.7 years primary (% gross) percent in 2023, supported by agriculture and government spending but weighed down by severe fuel shortages. 62.0 105.2 5 6 Poverty incidence remains among the highest globally, at GDP GDP per capita nearly 63 percent in 2024, while double-digit inflation, current US$, billion current US$ triple-digit forex premium, regional tensions, and global economic slowdown weigh on growth. 3.6 254.5 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2020 (2017 PPPs). 3/ 2022. 4/ 2020. 5/ 2024. 6/ 2024. over monetary policy. Rising domestic debt and low invest- Key conditions and challenges ment in infrastructure and human capital have exacerbated social vulnerabilities. Burundi’s economy remains fragile, constrained by weak funda- mentals, rapid population growth, soil erosion, and weak gov- Poverty remains widespread, with 63 percent of the population ernance. Over 85 percent of the labor force is engaged in agri- living on less than $2.15 per day (2017 PPP) in 2024. Education culture, primarily in low-productivity subsistence farming. Key and healthcare outcomes remain weak; fewer than half of chil- traditional exports, such as coffee and tea, face declining vol- dren complete primary school, gross secondary enrolment is just umes. Although Burundi has significant deposits of energy tran- 46 percent, and chronic malnutrition affects 56 percent of chil- sition minerals, the mining sector remains underdeveloped due dren under five. mainly to inadequate infrastructure, limiting its contribution to 0.5 percent of GDP. Strengthening governance and infrastructure, including trans- portation and digital technologies is critical to boosting private sec- Structural Balance of Payments (BOP) deficits compound these tor, attracting FDI, and unlocking growth and export-driving sectors challenges. Foreign direct investment (FDI) remains negligible, and such as mining and agro-industry. Equally, critical are measures to grants, which averaged 20–25 percent of GDP before the 2015 po- restore macroeconomic stability, including unifying exchange rates litical crisis, has since dropped to 4.1 percent. In 2024, export earn- and consolidating public finances. ings covered only 25 percent of imports, far below the Sub-Saharan Africa average. Recent developments Since the crisis, macroeconomic imbalances have persisted, in- cluding large fiscal and external deficits, an overvalued official ex- Official estimates indicate real GDP growth of 3.3 percent (y-o- change rate fueling a parallel forex market, and fiscal dominance y) in Q3 2024, following 5.8 percent in Q1 and 4.2 percent in FIGURE 1 / Public debt, fiscal and current account deficits FIGURE 2 / Actual and projected poverty rates and real private consumption per capita Percent of GDP Percent of GDP Poverty rate (%) Real private consumption per capita (constant LCU) 80 20 100 134000 70 90 133000 60 15 80 132000 70 50 131000 60 40 10 130000 50 129000 30 40 128000 20 5 30 20 127000 10 10 126000 0 0 0 125000 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Public domestic debt Public external debt International poverty rate Lower middle-income pov. rate Fiscal deficit (rhs) Current account deficit (rhs) Real priv. cons. pc Sources: Official statistics and World Bank staff estimation. Source: World Bank. Notes: See footnotes in table on the next page. 10 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. Q2. Annual growth is estimated at 3.5 percent, up from 2.7 percent in 2023. On the supply side, growth was dri- Outlook ven by services (4.2 percent), notably public administra- tion—which accounts for 39 percent of GDP in 2023, and Despite persistent BOP strains and global uncertainty, growth is a rebound in agriculture (3.7 percent, up from 1.5 per- projected to stabilize at 3.5 percent in 2025. A rebound in coffee ex- cent in 2023), supported by favorable weather. Industrial ac- ports—driven by governance and pricing reforms—is expected to tivity expanded by just 1.0 percent (down from 3.4 percent support agricultural output, while manufacturing will benefit from in 2023), weighed down by fuel shortages and foreign ex- a new hydropower plant coming online by mid-2025. Medium-term change constraints, though a recovery began in Q2-Q3 with growth is projected to average 3.8 percent in 2026–27, supported the commissioning of three power plants. On the demand by agriculture, manufacturing, and public spending. side, growth was supported by public (+4.4 percent) and pri- vate (+2.2 percent) consumption. Inflationary pressures are expected to intensify, fueled by rising monetary financing, a widening exchange rate premium, and glob- Annual inflation averaged 20.2 percent in 2024, down from al uncertainties. Average inflation is projected to nearly double 27.1 percent in 2023, but disinflation stalled mid-year, as to 39.1 percent in 2025, before moderating to 27.9 percent over deficit monetization intensified. Inflation fell to its low- 2026–27. High inflation will continue to weigh on household wel- est point in May 2024, at 12.1 percent (y-o-y), but rose fare, with per capita consumption growth averaging 0.8 percent in to 39.7 percent by February 2025, driven by rising food, 2026–27 and poverty remaining at 62 percent. transport, and utility costs amid fuel shortages and widen- ing forex parallel market premium. Rising food inflation dis- The fiscal deficit is expected to narrow to 5.6 percent of GDP in proportionately affects low-income households, threatening 2025 and to 4.4 percent by 2027, driven by improved revenue poverty reduction prospects. performance and spending-driven fiscal consolidation. Public debt, while high, is projected to decline gradually, reaching 64.6 percent The fiscal deficit narrowed to 6.9 percent of GDP in 2024 (from by 2027. The CAD is forecasted to remain elevated, averaging 10.7 9.3 percent in 2023), driven by improved revenue collection, but percent of GDP over 2025-27 as mining exports expand and forex was financed primarily through costly domestic borrowing, includ- constraints lessen. ing Central Bank advances. Public debt rose to 69.3 percent of GDP (up from 68.4 percent). Unlocking growth and improving living standards will require sus- tained structural reforms, particularly on exchange rate alignment The current account deficit (CAD) narrowed to 11.5 percent of and attracting FDI and concessional financing. While downside GDP as import growth slowed and exports edged up, though risks include fiscal slippages and a trade-driven global slowdown, trade credits remained the primary financing source. By February upside potential includes favorable commodity price shocks—es- 2025, international reserves covered only 1.6 months of imports, pecially gold amid global uncertainty—and near-term gains from while the forex premium was 156 percent (from 59 percent a the planned Musongati nickel railway, contingent on effective use year earlier). of local content. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 1.8 2.7 3.5 3.5 3.7 4.0 Private consumption 2.4 2.2 2.2 2.7 3.0 3.3 Government consumption 5.9 5.4 4.4 5.2 5.2 6.0 Gross fixed capital investment 4.0 4.0 3.7 4.6 4.4 5.7 Exports, goods and services 5.8 2.9 1.0 7.0 7.8 8.2 Imports, goods and services 7.0 4.2 1.4 4.5 4.8 5.7 Real GDP growth, at constant factor prices 1.8 2.7 3.5 3.5 3.7 4.0 Agriculture -0.8 1.5 3.7 3.7 3.8 4.2 Industry 3.2 3.4 1.0 2.5 3.2 3.5 Services 3.1 3.1 4.2 3.6 3.7 4.0 Inflation (consumer price index) 18.8 27.1 20.2 39.1 31.3 24.5 Current account balance (% of GDP) -15.9 -14.4 -11.5 -10.8 -10.7 -10.7 Net foreign direct investment inflow (% of GDP) 0.3 0.0 0.0 0.0 -0.1 -0.1 Fiscal balance (% of GDP) -10.7 -9.3 -6.9 -5.6 -5.3 -4.4 Revenues (% of GDP) 22.8 24.9 23.8 25.0 25.2 26.1 Debt (% of GDP) 70.2 68.4 69.3 68.2 66.1 64.6 Primary balance (% of GDP) -8.2 -6.9 -4.8 -3.2 -2.6 -1.6 1,2 International poverty rate ($2.15 in 2017 PPP) 62.1 62.4 62.7 62.5 62.1 61.7 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 86.2 86.2 86.4 86.2 86.2 86.0 GHG emissions growth (mtCO2e) 2.6 2.4 2.6 2.9 2.3 2.1 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2020-EICVMB. Actual data: 2020. Nowcast: 2021-2024. Forecasts are from 2025 to 2027. 2/ Projection using neutral distribution (2020) with pass-through = 0.87 (Med (0.87)) based on private consumption per capita in constant LCU. Macro Poverty Outlook / April 2025 11 This outlook reflects information available as of April 10, 2025. 1 2 CABO VERDE Population Poverty thousand thousands living on less than $3.65/ day 524.9 99.1 3 4 Growth remains tourism-driven and reached an estimated Life expectancy at birth School enrollment years primary (% gross) 7.3 percent in 2024. Strong growth in services, the recovery in agriculture, and low inflation are expected to have re- 74.7 96.4 duced poverty to 14.4 percent in 2024. However, the out- 5 6 look faces downside risks from the uncertainty around GDP GDP per capita current US$, billion current US$ global trade policy shifts—which could weaken tourism demand and disrupt global supply chains—and limited 2.8 5269.8 progress with SOE reforms. Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2015 (2017 PPPs). 3/ 2022. 4/ 2021. 5/ 2024. 6/ 2024. growth—ultimately unlocking Cabo Verde’s potential and ensuring Key conditions and challenges long-term economic stability. Cabo Verde has made significant progress since indepen- dence, but structural challenges remain—including poor con- Recent developments nectivity and infrastructure gaps, which contribute to high costs of essential services like electricity. The economy has Tourism remains the mainstay of the economy. Growth reached been heavily reliant on all-inclusive tourism offerings, which an estimated 7.3 percent in 2024, driven by strengthening in along with a strong state presence and limited linkages be- tourism activity and a gradual recovery in agricultural activity af- tween foreign direct investment (FDI) sectors and the broad- ter years of drought. Tourist arrivals neared 1.2 million (+16.5 er economy, has limited diversification efforts. Poverty is percent y/y) and, while still a small share, there has been an higher in rural areas, with significant heterogeneity in living increase in tourists outside the all-inclusive offering. Services ac- conditions across islands. Recent shocks, such as the pan- counted for nearly 70 percent of output (5.4pp of growth), with demic and soaring inflation in 2022 have further exposed hotels and transport representing a large share. Service exports the economy’s vulnerabilities. Additionally, Cabo Verde grap- (+27.2 percent y/y) and private consumption (+6.3 percent y/y) ples with high public debt, partly due to debt-financed fiscal remain key drivers of growth. policies after the 2008/09 Global Financial Crisis and support to underperforming state-owned enterprises (SOEs) through Lower energy and food prices put average headline inflation on-lending and guarantees. at 1 percent, down from 3.7 percent in 2023. At an average 1 percent, food inflation was significantly lower than previous Fiscal and structural reforms are essential to build resilience years (15.7 percent in 2022, 8.9 percent in 2023). Strong growth against external shocks, boost private sector productivity, re- in services, the recovery of agriculture, the moderation of infla- duce transport costs, and promote sustainable, inclusive tion, and sustained remittances, contributed to reducing poverty FIGURE 1 / Real GDP growth and sectoral contributions to real FIGURE 2 / Actual and projected poverty rates and real GDP per GDP growth capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 20 60 600000 15 50 500000 10 5 40 400000 0 30 300000 -5 -10 20 200000 -15 10 100000 -20 -25 0 0 2015 2017 2019 2021 2023 2025 2027 2015 2017 2019 2021 2023 2025 2027 Agriculture Industry Services International poverty rate Lower middle-income pov. rate Net taxes GDP Upper middle-income pov. rate Real GDP pc Sources: INE and World Bank estimates. Source: World Bank. Notes: See footnotes in table on the next page. 12 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. (US$3.65 per day PPP 2017 line) by 1.8 percentage points, reaching public sector efficiency and efforts to crowd-in private investment. 14.4 percent in 2024, down from 16.2 percent in 2023. Lower oil prices will contribute to keeping inflation low in 2025, and in line with the Euro-area over the medium-term (2 percent). Un- Strong tourism performance put the current account (CA) at a sur- der these favorable conditions, poverty is projected to continue de- plus of 3.7 percent of GDP in 2024 (2.5 percent deficit in 2023). clining, reaching 13.3 percent in 2025 and falling to 11.2 percent by Tourism earnings (over 70 percent service export earnings) surged, 2027, equivalent to lifting approximately 7,000 Cabo Verdeans out underscoring the sector's critical role in supporting external bal- of poverty (compared to 2024). ances. A six percent increase in remittances, a key source of foreign exchange, further enhanced external stability. The CA improve- The accelerated implementation of public investments will off-set ment has masked a weaker financial account—as the interest rate the potential benefit of lower oil and commodity import prices, differential with the Eurozone led to outflows from financial insti- with the current account deficit (CAD) peaking at 2.3 percent of tutions. Despite this, at EUR 736 million at end-2024, gross interna- GDP by 2026. Gross international reserves will remain stable at tional reserves remain adequate, covering 5.9 months of imports. 5.5 months of imports, enough to support the currency peg. The fiscal deficit widened to 1.1 percent of GDP in 2024 (0.3 percent Increased public investments and continued roll-out of wage-bill in 2023) driven by higher public investment, local elections spend- reforms will widen the fiscal deficit to 1.5 percent of GDP in 2025. ing and expanded social programs. Revenues remained relatively Despite this, sustained efforts to enhance tax collection, added stable at 24.7 percent of GDP, supported by stronger than expect- proceeds from SOE restructuring and commitment to contain ex- ed tax revenues. This, along with strong GDP growth, lowered cen- penditures will reduce the deficit to 0.6 percent of GDP by 2027, tral government debt by 6.2pp to 110.2 percent of GDP (117.7 per- with a primary surplus of 1.1 percent. This should allow public cent including SOEs’ guaranteed debt). Despite this, the fiscal po- debt—excluding SOEs’ guaranteed debt—to decline to 93.9 percent sition continues to be subject to risks from support to SOEs, rigid of GDP by 2027. expenditures and elevated debt servicing costs. Ongoing global uncertainties—including the escalation of trade policy changes—pose risks to the outlook. For example, subdued Outlook global growth and reduced partner engagement could negatively impact tourism demand, foreign investment and remittances—all Growth is projected at 5.9 percent in 2025 as low-cost airline oper- vital to the economy. Political pressures ahead of the 2026 elec- ators settle into the market, and will trend towards its potential of tions may impact the pace of reforms, while climate change and around 5 percent over the medium-term, supported by improved natural hazards pose long-term challenges. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 15.8 5.5 7.3 5.9 5.3 4.9 Private consumption 13.7 6.6 6.3 6.2 6.1 5.2 Government consumption -2.8 2.5 2.3 8.1 2.6 5.4 Gross fixed capital investment -10.3 -12.9 1.5 4.0 7.8 3.2 Exports, goods and services 78.9 -6.1 23.9 5.0 5.1 6.7 Imports, goods and services 18.2 -8.7 10.0 5.8 6.1 6.2 Real GDP growth, at constant factor prices 12.4 5.4 7.3 5.9 5.3 4.9 Agriculture -6.6 -7.1 8.1 5.7 5.7 4.6 Industry 7.5 1.3 3.2 3.2 3.3 3.1 Services 14.7 6.9 7.9 6.3 5.6 5.2 Inflation (consumer price index) 7.9 3.7 1.0 1.8 2.0 2.0 Current account balance (% of GDP) -3.5 -2.5 3.7 -1.4 -2.3 -1.6 Net foreign direct investment inflow (% of GDP) 4.6 6.0 3.3 3.0 2.9 2.9 Fiscal balance (% of GDP) -4.0 -0.3 -1.1 -1.5 -1.3 -0.6 Revenues (% of GDP) 22.6 25.1 24.7 26.7 25.2 24.6 Debt (% of GDP) 126.7 116.4 110.2 104.6 99.3 93.9 Primary balance (% of GDP) -1.8 2.0 1.3 0.5 1.1 1.1 1,2 International poverty rate ($2.15 in 2017 PPP) 4.3 4.2 3.5 3.0 2.7 2.4 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 17.0 16.2 14.4 13.3 12.1 11.2 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 46.5 44.6 41.2 38.7 37.0 35.5 GHG emissions growth (mtCO2e) 0.6 4.3 4.0 4.3 4.4 0.0 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2015-IDRF. Actual data: 2015. Nowcast: 2016-2024. Forecasts are from 2025 to 2027. 2/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 13 This outlook reflects information available as of April 10, 2025. 1 2 CAMEROON Population Poverty million millions living on less than $3.65/day 29.4 12.6 3 4 Life expectancy at birth School enrollment Cameroon’s economy grew 3.7 percent in 2024, but years primary (% gross) poverty rose to 23.3 percent due to persistent job scarcity. Fiscal consolidation cut the deficit to 0.4 percent of GDP 61.0 112.6 5 6 and reduced debt to 41.7 percent of GDP. Medium-term GDP GDP per capita growth is supported by better power supply and public current US$, billion current US$ investment, but risks from uncertain international aid, markets, and upcoming elections threaten growth, trade, 53.1 1806.1 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2021 (2017 PPPs). 3/ 2022. and inflation despite only moderate projected impacts. 4/ 2023. 5/ 2024. 6/ 2024. doubled, reshaping the poverty landscape. Rising conflict, affect- Key conditions and challenges ing now nine out of ten regions, and natural disasters have pro- pelled rural-urban migration, increasing pressure on urban areas Cameroon’s economy has shown resilience in the face of ex- for jobs and services. These vulnerabilities may intensify during ternal shocks, but multiple structural weaknesses hinder its this election year. potential. With infrastructural deficiencies, underdevelopment of the financial system, and overlapping crises between 2020 and 2023, per capita incomes stagnated, and GDP growth av- Recent developments eraged 2.6 percent, far below the target of 6.6 percent set out in the National Development Strategy (NDS30). Labor force Cameroon’s real GDP grew by 3.7 percent in 2024. Cocoa participation fell from 79.1 to 64.3 percent between 2005 and and cotton exports rose thanks to higher yields and prices 2021. Cameroon needs a major rethink of its growth model, and improved power supply, aiding commodity processing emphasizing private sector participation, redefining the state’s and industrial growth. Though oil production slowed, the role in the economy, and addressing the root causes of low current account deficit fell from 4.1 to 3.1 percent of GDP labor productivity. between 2023 and 2024, thanks to higher agricultural ex- ports and lower imports. Public investment and private con- The number of people living under the international poverty line sumption fueled growth on the demand side. Average infla- ($2.15 in 2017 PPP) is estimated to have increased from 6.2 to tion dropped from 7.4 percent to 4.5 percent by year-end, ow- over 6.9 million between 2021 and 2024. Low economic growth ing to declining food and transportation sub-components and combined with rapid population growth and insufficient job cre- government price controls. Monetary policy remained tight to ation explains the lack of progress in poverty reduction. Previous- bolster the region’s external position and curb inflation below ly, between 2014 and 2021, the poverty incidence in urban areas the 3.0 percent target. However, fiscal pressures from other had nearly doubled, and the number of urban poor more than Central African Economic and Monetary Community (CEMAC) FIGURE 1 / Real GDP growth and contributions to real GDP growth FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 15 90 920000 80 900000 10 70 880000 5 60 860000 50 0 840000 40 820000 30 -5 20 800000 -10 10 780000 2000 2003 2006 2009 2012 2015 2018 2021 2024 2027 0 760000 Gov. cons. Exports GFCF 2014 2016 2018 2020 2022 2024 2026 Inventories Private cons. Imports International poverty rate Lower middle-income pov. rate Statistical disc. GDP Upper middle-income pov. rate Real GDP pc Source: World Bank. Source: World Bank. Notes: See footnotes in table on the next page. 14 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. countries affected CEMAC’s net foreign assets, delaying the IMF program review for Cameroon. Outlook Continued fiscal adjustment brought the fiscal deficit down from Real GDP growth is projected at 3.8 percent on average in 0.7 percent to 0.4 percent of GDP in 2024. Revenue measures 2025-2027, driven by higher power supply, and the scaled-up like tax administration digitalization and tax base broadening public investment program supported by higher tax revenues. have accompanied measures to streamline current expenditures Inflation is anticipated to reach the 3 percent target by 2027. in goods and services and fuel subsidies. As a result, non-oil The fiscal deficit would remain around 1.1 percent of GDP in revenue to GDP ratio increased from 13.7 percent to 13.9 per- the medium term, allowing the debt to GDP ratio to further cent while current expenditures declined from 13.9 percent of decrease. The projected increase in tax revenue will not ful- GDP to 12.6 percent of GDP between 2023 and 2024. The pri- ly counterbalance falling oil revenues (induced by depleting oil mary balance remained positive and doubled, reducing public fields), while current expenditures are expected to continue debt further to 41.7 percent of GDP by end-September 2024 being streamlined. The current account deficit will remain at against 43.0 percent at the end of 2023. Cameroon’s public debt around 4.3 percent of GDP over the medium term, reflecting is sustainable but faces high risk of distress due to the debt ser- the decline in oil production, the mixed effect of the govern- vice-to-public revenue and debt service-to-export revenue ratios ment industrial policies, and higher imports needed for the breaching the thresholds. scaled-up public investment. To compensate for inflationary pressures, tax breaks for sectors Real per capita growth is projected to be insufficient to alleviate like agriculture were introduced and the minimum wage and pub- poverty over the next three years. As a result, an additional lic sector salaries were raised. The minimum wage for public em- 125,937 people are expected to fall into extreme poverty, bring- ployees covered by the Labor Code increased from CFA 36,270 ing the total to over 7 million by 2027. This outlook remains vul- to CFA 41,875; the agricultural minimum wage increased to CFA nerable to several risks, including: (i) uncertainty and shifts in the 45,000; and the non-agricultural minimum wage increased to CFA global aid, trade, investment, and commodity and financial mar- 60,000. Since close to 90 percent of the workforce is in the infor- kets context, (ii) a continued security crisis, (iii) lower-than-expect- mal sector, these measures are expected to have a limited impact ed budget support from external donors, (iv) ongoing energy sup- on most of the workforce and on poverty, although they could ply shortages, and (v) potential tensions surrounding the presi- slow down job creation. dential elections in October 2025. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 3.7 3.2 3.7 3.7 3.8 3.9 Private consumption 4.3 3.5 4.9 3.8 3.9 4.1 Government consumption -5.7 2.9 -5.1 4.5 2.4 3.3 Gross fixed capital investment 10.5 3.2 7.5 5.0 5.7 4.9 Exports, goods and services 3.2 0.1 -2.4 -1.4 -0.9 -0.6 Imports, goods and services 5.3 1.9 2.1 2.2 2.2 2.4 Real GDP growth, at constant factor prices 3.6 3.1 4.0 3.7 3.8 3.9 Agriculture 3.4 2.2 3.9 3.6 3.4 3.4 Industry 3.3 2.3 1.6 2.7 3.0 3.2 Services 3.8 3.8 5.2 4.2 4.3 4.4 Inflation (consumer price index) 6.3 7.4 4.5 3.7 3.2 3.0 Current account balance (% of GDP) -3.3 -4.1 -3.1 -4.0 -4.3 -4.3 Fiscal balance (% of GDP) -1.1 -0.7 -0.4 -1.0 -1.0 -1.2 Revenues (% of GDP) 16.3 16.6 15.8 15.4 15.6 15.5 Debt (% of GDP) 43.7 43.0 41.7 39.2 38.7 36.9 Primary balance (% of GDP) -0.3 0.3 0.6 0.2 0.2 0.1 1,2 International poverty rate ($2.15 in 2017 PPP) 22.8 23.6 23.3 23.0 22.7 22.3 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 46.5 47.6 47.5 47.1 46.5 45.9 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 76.0 76.8 76.7 76.1 75.8 75.3 GHG emissions growth (mtCO2e) 0.4 0.9 2.2 2.5 2.1 0.3 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2021-ECAM-V. Actual data: 2021. Nowcast: 2022-2024. Forecasts are from 2025 to 2027. 2/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 15 This outlook reflects information available as of April 10, 2025. CENTRAL AFRICAN 1 2 Population Poverty million millions living on less than $2.15/day 5.9 3.4 REPUBLIC Life expectancy at birth years 3 School enrollment primary (% gross) 4 Economic growth increased moderately to 1.5 percent in 54.5 110.7 5 6 2024, hampered by limited access to energy and essential GDP GDP per capita current US$, billion current US$ services. This leaves 65.3 percent of households living in extreme poverty. Concerns for 2025, an election year, 2.8 481.7 include a fragile liquidity situation and dwindling global Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2021 (2017 PPPs). 3/ 2022. flows of aid, especially humanitarian assistance and social 4/ 2017. 5/ 2024. 6/ 2024. sector support, will create further hardship for most of the population exposed to poverty. electricity supply. Key sectors, including agro-processing (e.g., Key conditions and challenges breweries), telecom, and retail, showed signs of recovery while food agriculture (e.g., cassava) remained steady. The telecom sec- As a result of weak institutions and high levels of instability, the tor recovery was driven by increased cell phone activity, 3G net- Central African Republic (CAR) continues to be plagued by extreme work expansion, and 4G license sales in late 2024 and early 2025, poverty despite its natural wealth. Since the 2012 civil war, per capi- along with increased mobile money use. Public sector expansion ta income has dropped by a third and currently around two-thirds was enabled by external financing. of the population lives on less than US$2.15-a-day (2017 PPP). Chronic fuel shortages due to reduced imports by river (structurally Despite a slight recovery and boost in consumption in late 2024, 80-85 percent of fuel imports) have hurt economic activity and gov- inflation is estimated to be historically low at 1.5 percent for the ernment revenues in recent years, with some easing in late 2024. year. After keeping the policy rate at 5 percent for two years, the Weak revenue mobilization, social sector spending pressures, and Bank of Central African States (BEAC) lowered it to 4.5 percent in a freeze in donor budget support have strained public finances. March 2025. CAR's banking sector remains underdeveloped, with CAR is at high risk of debt distress, and liquidity risks threaten its only four commercial banks and limited financial services.Bank bal- ability to pay civil service salaries and essential services. ance sheets expanded by 14.4 percent, driven by increased loans, deposits, and cash surpluses. The non-performing loans (NPL) ratio improved to 12.7 percent in 2024 from 16.4 percent in 2023. Recent developments The fiscal deficit is estimated to have risen to 4.9 percent in 2024 Economic growth is estimated to have increased from 0.7 percent from 3.5 percent in 2023 due to increased spending on goods in 2023 to 1.5 percent in 2024 on account of increased fuel and and services and transfers, including to foreign missions, overseas FIGURE 1 / The dynamic and composition of public debt in recent FIGURE 2 / Actual and projected poverty rates and real GDP per years capita Percent of GDP Poverty rate (%) Real GDP per capita (constant LCU) 70 100 300000 60 90 250000 80 50 70 200000 40 60 50 150000 30 40 20 100000 30 10 20 50000 10 0 0 0 2020 2021 2022 2023 2024e 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 External debt Domestic debt International poverty rate Lower middle-income pov. rate General government debt Upper middle-income pov. rate Real GDP pc Source: World Bank. Source: World Bank. Notes: See footnotes in table on the next page. 16 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. health services, and equipment for local armed forces, offsetting further improve the fuel supply. A 30,000-ton diesel donation minimal domestic capital spending and sustained DRM efforts. from Russian Federation may temporarily boost private activities CAR's public and publicly guaranteed (PPG) debt is estimated to in 2025, with potential fiscal benefits if managed well. Poverty is have reached 60.7 percent of GDP in 2024, up from 58.2 percent in expected to remain around 65-66 percent due to weak growth the 2023 with domestic/regional debt having risen to 28.8 percent and declining per capita income. Moreover, the halt of USAID's of GDP mainly due to bond issuance towards the end of 2024 to support to CAR of about US$110 million as of early 2025 could compensate for delays in the disbursement of the Extended Credit push up to 133 thousand more people into extreme poverty. Facility program under the third review. The fiscal deficit is projected to narrow to 2.3 percent of GDP The current account deficit remained at approximately 9.0 percent of in 2025 and 1.5 percent in 2026-27, dependent on donor grants, GDP, driven by increased energy and equipment imports, coupled DRM, and PFM reforms. Public debt should stabilize at 57.3 per- with reduced gold and diamond exports, due to temporal reduction cent of GDP by 2027, with domestic debt at 26.9 percent. The in gold output and diamond pricing. These minerals, along with tim- current account balance may improve with increased gold and ber, are key to the export portfolio. Although gold prices surged by sawn wood production but will still face deficits due to energy, 22.9 percent to US$2,387.7 per troy ounce in 2024 and CAR resumed equipment, and food expenditures. Enhancing energy production official diamond exports under the Kimberley Process after an and access is crucial for attracting investments key tradable sec- 11-year embargo, gold production declined due to security issues tors. Inflation is expected to stabilize below 3.0 percent by 2027, in mining zones, and diamonds faced competition from synthetic conditional on energy price moderation. alternatives. Structural challenges include mineral smuggling, low competitiveness, and weak global value chain integration. Reduced global flows of aid, especially humanitarian assistance and social sector support, will create further hardship for the Extreme poverty remains widespread. In 2024, around 65.3 per- large share of the country’s population already living in extreme cent of the population—3.9 million people—were estimated to live poverty. The changing trade, investment, and financial and com- with less than US$2.15 (2017 PPP) per person per day. Spatial dis- modity markets context is projected to have moderate immediate parities are stark and extreme poverty incidence in rural areas impacts on growth and trade due to CAR’s very limited exports, reaches 76.1 percent, compared to 49.8 percent in other urban ar- including to the US. eas and 20.2 percent in Bangui. Downside risks prevail. Elections could cause fiscal slippages and stability risks. The shifting global economic context carries signif- Outlook icant risks for CAR’s economic recovery, especially if aid flows re- main limited or further decline, uncertainty in trade policy persists, Real GDP growth is projected to reach 2.1 percent in 2025 and and the cost of borrowing remains elevated or further increases. 2.5 percent in 2026-27, still below the 3.1 percent population Risks also arise from rearrangements in the global security archi- growth rate. This remains contingent on policy adjustments to tecture to CAR’s very fragile emergence from conflict. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 0.5 0.7 1.5 2.1 2.2 2.8 Private consumption 0.0 1.2 2.1 1.2 2.3 2.9 Government consumption -8.2 3.5 11.2 -6.4 2.0 2.1 Gross fixed capital investment -4.5 -2.7 5.3 4.8 1.9 4.2 Exports, goods and services 2.6 9.0 5.5 13.8 6.7 4.1 Imports, goods and services -5.5 5.5 9.9 4.0 4.9 4.3 Real GDP growth, at constant factor prices 1.0 0.7 1.6 2.1 2.2 2.9 Agriculture 2.2 2.3 1.7 1.9 2.2 2.3 Industry -3.9 -0.5 0.9 1.2 1.3 1.4 Services 2.4 0.1 1.8 2.7 2.5 4.0 Employment rate (% of working-age population, 15 years+) 66.0 66.2 66.2 66.2 66.2 66.2 Inflation (consumer price index) 5.6 3.0 1.5 2.7 3.3 2.8 Current account balance (% of GDP) -12.9 -9.3 -9.0 -8.5 -8.1 -7.6 Fiscal balance (% of GDP) -5.3 -3.6 -4.9 -2.3 -1.3 -1.8 Revenues (% of GDP) 12.3 14.5 14.6 16.2 17.0 16.5 Debt (% of GDP) 51.0 58.2 60.5 59.5 58.6 57.3 Primary balance (% of GDP) -4.9 -3.0 -4.7 -2.1 -1.0 -1.5 1,2 International poverty rate ($2.15 in 2017 PPP) 64.0 65.9 65.3 65.2 65.5 65.3 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 84.8 86.1 85.6 85.5 85.5 85.4 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 95.7 96.4 96.2 96.0 96.0 95.8 GHG emissions growth (mtCO2e) -0.3 -0.3 -0.4 -0.3 -0.2 -0.2 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2021-EHCVM. Actual data: 2021. Nowcast: 2022-2024. Forecasts are from 2025 to 2027. 2/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 17 This outlook reflects information available as of April 10, 2025. 1 2 CHAD Population Poverty million millions living on less than $2.15/day 20.3 5.7 3 4 Life expectancy at birth School enrollment In 2024, GDP growth is estimated at 3.7 percent (-1.4 percent years primary (% gross) per capita), driven by the non-oil sector. Demand pressures, floods, and fuel price adjustments pushed inflation to 5.7 per- 53.0 91.8 5 6 cent. Hence, the poverty rate has risen to 39.4 percent. Growth GDP GDP per capita is projected to rise gradually, supported by an expansion in current US$, billion current US$ non-oil activities. The outlook is subject to downside risks, in- cluding lower oil prices compounded by global trade policy 20.8 1023.3 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2022 (2017 PPPs). 3/ 2022. uncertainties, climate shocks, and heightened insecurity. 4/ 2023. 5/ 2024. 6/ 2024. 2024 presidential election and the conclusion of the parlia- Key conditions and challenges mentary, regional, and local elections. However, Chad con- tinues to be adversely affected by conflicts and violent Chad’s economic growth has been volatile and weak, reflecting groups in neighboring countries, which can strain stability its dependence on the oil sector. The oil sector accounts for 15 and public finances. In 2024, military spending surged by percent of Chad’s economic output, 41 percent of fiscal revenues, 19.1 percent above the initial budget, reaching 23.5 percent and 76 percent of exports. of spending. According to UNHCR, Chad was hosting over 1.3 million refugees (mostly Sudanese from the war in Sudan) as Chad is also highly susceptible to climate variability and nat- of February 2025. ural disasters. Agriculture accounts for 40 percent of out- put and provides a livelihood for a significant portion of the population. In recent years, repeated episodes of droughts Recent developments and floods have impaired agricultural production and, com- bined with conflict and displacement, led to chronic food Chad’s economy is estimated to have grown by 3.7 percent in insecurity. During July-October 2024, torrential rains flood- 2024 (-1.4 percent per capita due to the large influx of refugees), ed over 217,000 houses, destroyed 432,000 hectares of crops, driven mainly by the non-oil sector (+4.6 percent), while the oil killed thousands of livestock, and adversely impacted 1.5 million sector growth was modest (+1.4 percent), reflecting a 4.2 percent people. As of December 2024, 2.4 million people (14 percent of increase in oil production. the population) were acutely food insecure, up by 400,000 from the previous year. On the supply side, services are estimated to have contributed 3.0 pp to growth, followed by the non-oil industry with 0.8 pp. Chad’s most recent political transition was completed with Agriculture contributed negatively (-0.2 pp) due to severe floods. the declaration of President Deby as the winner of the Refugee-driven private consumption was the main demand driver, FIGURE 1 / Oil revenues, non-oil revenues, and grants FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent of GDP Poverty rate (%) Real GDP per capita (constant LCU) 16 100 800000 14 90 700000 12 80 600000 70 10 500000 60 8 50 400000 6 40 300000 4 30 200000 20 2 100000 10 0 0 0 2022 2023 2024e 2025f 2026f 2027f 2022 2023 2024 2025 2026 2027 Oil revenues Grant revenues International poverty rate Lower middle-income pov. rate Non-oil revenues Total revenues and grants Upper middle-income pov. rate Real GDP pc Source: World Bank. Source: World Bank. Notes: See footnotes in table on the next page. 18 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. contributing 3.0 pp, followed by public consumption, boosted by spending on wages and elections. Outlook The current account deficit (CAD) is estimated to have risen to 1.8 per- GDP growth is projected at 3.5 percent (0.03 percent per capita) in cent of GDP in 2024 reflecting increased investment income trans- 2025, supported by a further expansion in non-oil activity, particular- ferred abroad and a deteriorating goods and services balance. ly by services and agriculture. Over the medium term, GDP growth is expected to accelerate due to the expected rebound in oil pro- The food demand pressures led to higher prices, while floods duction, increased public investment, and private consumption. caused food supply shortages. These factors collectively drove inflation to 5.7 percent in 2024. Food and transportation prices Following a peak at 3.8 percent of GDP in 2025, the fiscal deficit is rose by 8.5 percent, and 15 percent, respectively, over the year. expected to improve to 2.6 percent of GDP by 2027, owing to con- The poverty rate is estimated to have increased by 2.6 pp to tinued efforts to mobilize non-oil revenues and contain non-prior- 39.4 percent in 2024, with a total of 7.9 million people living in ity spending. Public debt is projected to stabilize. Amid lower oil extreme poverty. prices due to the shifts in international trade policy, the CAD is projected to deteriorate to 4.1 percent of GDP in 2025. The infla- The Bank of Central African States (BEAC) sought to contain infla- tion rate is projected to gradually converge to the BEAC target of tionary pressures and support the exchange rate regime. It low- 3 percent by 2027. ered its main policy rate from 5.00 percent to 4.50 percent at the end of March 2025, marking its first cut since 2023, while liquidi- Flood damages and crop losses are expected to lead to a drop in ty injections, which had been suspended for more than a year, re- production and household incomes, and as a result, the extreme sumed. The Central African Economic and Monetary Community poverty rate is expected to increase by 1.0 pp to 40.4 percent in (CEMAC)'s external reserves fell to 4.4 months of import cover at 2025, which translates into an additional 0.48 million people in ex- end-2024, below the 5-month target. treme poverty. Amid continued security restrictions, low social pro- tection coverage, and the ongoing Sudan crisis, extreme poverty is Chad’s fiscal deficit is estimated at 1.9 percent of GDP in 2024. projected to reach 40.6 percent in 2026. Total revenues reached 13.7 percent of GDP, driven by an 18.5 percent increase in non-oil revenues. Government spending is Downside risks to the outlook include a further decline in oil prices, estimated to have risen sharply to 15.6 percent of GDP due to in- regional conflicts, global trade policy uncertainties and natural cat- creased expenditures on elections, military equipment, and flood astrophes. The suspension of specific bilateral aid may affect exter- management. As a result, the non-oil primary balance remained nal financing and assistance to Sudanese refugees. The proactive in deficit at 7.4 percent of GDP. Public debt slightly increased to implementation of the National Development Plan presents an up- 33.3 percent of GDP. side risk to the outlook. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 13.0 4.1 3.7 3.5 4.5 4.4 Private consumption 4.7 4.2 4.5 4.6 4.7 4.9 Government consumption 8.5 2.5 20.6 5.9 1.5 2.0 Gross fixed capital investment 0.9 28.0 1.1 5.7 6.8 6.8 Exports, goods and services 47.7 -7.4 0.2 0.9 6.8 2.6 Imports, goods and services 6.8 7.1 7.3 7.1 7.5 4.2 Real GDP growth, at constant factor prices 3.6 4.1 3.7 3.5 4.5 4.4 Agriculture 4.1 1.8 -0.5 2.4 2.6 3.1 Industry 2.4 6.7 4.4 -0.2 8.2 3.5 Services 4.1 4.9 8.0 7.6 3.9 6.4 Employment rate (% of working-age population, 15 years+) 59.6 59.3 57.7 59.7 59.7 59.7 Inflation (consumer price index) 5.8 4.1 5.7 4.6 3.5 3.0 Current account balance (% of GDP) 9.4 -0.7 -1.8 -4.1 -2.3 -1.4 Fiscal balance (% of GDP) 2.9 -0.5 -1.9 -3.8 -2.4 -2.6 1 Revenues (% of GDP) 13.1 13.5 13.7 13.6 15.4 15.3 Debt (% of GDP) 29.9 29.9 33.3 32.3 32.5 33.1 Primary balance (% of GDP) 3.3 0.2 -1.2 -3.1 -1.7 -2.0 2,3 International poverty rate ($2.15 in 2017 PPP) 30.8 36.8 39.4 40.4 40.6 40.7 2,3 Lower middle-income poverty rate ($3.65 in 2017 PPP) 62.8 68.3 72.3 72.7 73.4 73.6 2,3 Upper middle-income poverty rate ($6.85 in 2017 PPP) 88.8 90.6 91.5 91.2 91.5 91.7 GHG emissions growth (mtCO2e) 2.1 2.1 2.0 2.1 1.9 2.0 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ 2024 data includes one-off non-oil, non-tax revenues, such as windfalls from the increase in the fuel price and dividends from the Société de raffinage de N'Djamena. 2/ Calculations based on 2022-EHCVM. Actual data: 2022. Nowcast: 2023-2024. Forecasts are from 2025 to 2027. 3/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 19 This outlook reflects information available as of April 10, 2025. 1 2 COMOROS Population Poverty million millions living on less than $2.15/day 0.9 0.1 3 4 Life expectancy at birth School enrollment years primary (% gross) Economic growth increased to 3.4 percent in 2024, but the fiscal deficit widened significantly. Poverty remained high at 63.7 94.7 5 6 38 percent. Growth is projected to rise to 4 percent by GDP GDP per capita 2027, as higher tourism revenues from hosting an interna- current US$, billion current US$ tional sporting event are expected to boost private con- sumption. Enhancing revenue mobilization and managing 1.4 1596.6 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2014 (2017 PPPs). 3/ 2022. contingent liabilities remain critical reform priorities. 4/ 2023. 5/ 2024. 6/ 2024. the development of the small private sector. Low human Key conditions and challenges capital and productivity further hamper economic progress, while limited access to finance curtails entrepreneurship and Comoros faces significant structural challenges, leading to business growth. Additionally, the dominance of traditional low economic growth and stagnating income per capita systems and informal power structures weakens state insti- over the past decades. Weak institutions, a small domestic tutions, compounding governance issues and impeding effec- market, and geographic remoteness have hindered broad- tive policy implementation. er economic progress, contributing to persistent poverty and causing Comoros to lag other small island nations. From The relatively slow pace of reforms to promote economic 2001 to 2022, GDP per capita increased by only US$367 (con- transformation and private sector development have hin- stant 2017 PPP US$), one of the lowest rises among peer dered growth and kept poverty at 38 percent ($3.65/day, nations. The economy relies heavily on private sector con- 2017 PPP) for a decade. Low revenue collection, owing to tax sumption, particularly from grands mariages, which are large exemptions and administrative inefficiencies, undermines fis- traditional weddings, often financed by years of household cal sustainability, while high risk of debt distress limits fund- savings, that drive household spending but do little to foster ing access. Climate risks like cyclones and rising sea levels sustainable growth. further disrupt economic activity, exacerbate poverty, and threaten development. Political economy factors have shaped Comoros' economic trajectory, contributing to growth volatility over the past 40 years. Despite improved political stability in the last two Recent developments decades, economic progress remains sluggish, constrained by several structural challenges. State-owned enterprises Growth increased to 3.4 percent in 2024, up from 3 percent (SOEs) dominate key sectors, limiting competition and stifling in 2023. The services sector remained the main driver of FIGURE 1 / Real GDP growth and contributions to real GDP growth FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percentage points Percent Poverty rate (%) Real GDP per capita (constant LCU) 20 5 80 580000 570000 15 70 4 560000 10 60 550000 3 50 540000 5 530000 40 0 520000 2 30 510000 -5 20 500000 1 -10 490000 10 480000 -15 0 0 470000 2022 2023 2024 2025 2026 2027 2014 2016 2018 2020 2022 2024 2026 Gov. cons. Exports GFCF International poverty rate Lower middle-income pov. rate Private cons. Imports GDP (rhs) Upper middle-income pov. rate Real GDP pc Sources: World Bank, IMF, and Government of Comoros calculations. Source: World Bank. Notes: See footnotes in table on the next page. 20 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. growth, while industry, though the fastest growing sector at 3.8 percent, had limited impact due to its small share in GDP. Outlook Growth in the construction sector was fueled by ongoing public investments in the Galawa Hotel and El-Maarouf Hospital pro- Growth is expected to reach 4 percent in 2027, for only the jects. On the demand side, private consumption was support- third time since 2010. Private consumption is expected to remain ed by lower inflation, which averaged 5 percent in 2024, but a strong in the medium-term, as inflation converges to 3 percent. widening trade deficit partly offset these gains and weighed on Public investments under Plan Comores Emergent 2030 and overall growth. preparations for the 2027 Indian Ocean Island Games, which Co- moros will host, will expand supply capacity, paving the way for a The fiscal deficit widened from 1.3 to 3.9 percent of GDP in 2024, tourism surge in 2027. However, an expected deterioration in the due to higher spending, with 1.5 percent of GDP financed domes- terms of trade could weigh on the outlook. Poverty is expected tically. Total revenue, including grants, stayed constant at 16.6 to fall to 36 percent by 2027. percent of GDP. Customs revenues rose by 0.3 percent of GDP, but corporate income and consumption tax revenues fell by 0.1 Hosting the Games offers a chance to advance Comoros’ tourism and 0.3 percent of GDP, respectively, highlighting the urgent need ambitions, but limited fiscal space and high debt risks require for a strategy to mitigate upcoming WTO-related customs losses. strategic planning to prevent wasteful spending. Capital invest- On the expenditure side, lower-than-expected current spending ment must be carefully managed, prioritizing transparency, sus- was outweighed by higher-than-planned capital expenditures. To- tainability, and long-term benefits. To ease fiscal pressure and im- tal expenditures rose from 17.8 to 20.5 percent of GDP. Public prove debt sustainability, Comoros should boost domestic revenue debt remains sustainable, despite increasing to 36.8 percent of and control spending by cutting tax exemptions, restructuring SOE GDP in 2024. liabilities, increasing procurement transparency, and enhancing public investment management. Domestic credit remained stable at 24.4 percent of GDP in 2024, but its composition shifted toward the public sector. Private sec- The current account deficit is expected to expand in 2025 due to tor credit growth slowed to 1.6 percent, while credit to the pub- the importation of six generators, valued at 0.3 percent of GDP, to lic sector surged by 8.2 percent in 2024. This reflects the rising reinforce energy infrastructure amid severe power cuts. Service ex- fiscal deficit, with increased public borrowing absorbing liquidi- ports are projected to grow, as tourism surges for the Games; how- ty. Vulnerabilities in the financial sector stem from a high level ever, gains may be offset by rising goods imports. External imbal- of nonperforming loans (17 percent of total loans) and declining ances, alongside fiscal pressures, could exacerbate vulnerabilities. provision rates. Downside risks to the outlook include materializing contingent lia- The current account deficit widened from 2.6 to 3.2 percent of GDP bilities, climate-related disasters and heightened global uncertain- in 2024, as goods exports fell by 5 percent. Imports remained sta- ty from US reciprocal tariffs that affect Comoros through indirect ble, while remittance inflows grew 5.4 percent in nominal terms but channels, such as commodity prices, remittances, supply chains, declined as a share of GDP. exchange rates, and investment. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 2.8 3.0 3.4 3.7 3.8 4.0 Private consumption 0.2 1.9 3.2 3.7 3.4 3.8 Government consumption 5.4 11.6 -2.3 1.3 2.8 3.2 Gross fixed capital investment -62.2 69.8 -13.3 4.3 7.1 6.6 Exports, goods and services 100.8 -10.1 4.6 4.9 5.5 5.5 Imports, goods and services -4.0 8.2 -4.3 3.7 4.5 5.0 Real GDP growth, at constant factor prices 2.6 3.0 3.4 3.7 3.8 4.0 Agriculture -2.6 4.1 3.3 3.7 3.5 3.4 Industry 13.4 3.0 3.8 3.0 2.9 3.3 Services 3.0 2.5 3.4 3.8 4.1 4.4 Inflation (consumer price index) 12.4 8.5 5.0 4.0 3.3 3.0 Current account balance (% of GDP) -0.6 -2.6 -3.2 -4.0 -4.6 -5.0 Fiscal balance (% of GDP) -3.9 -1.3 -3.9 -3.7 -3.3 -3.1 Revenues (% of GDP) 14.1 16.5 16.6 16.3 16.6 16.7 Debt (% of GDP) 34.1 34.8 36.8 37.6 38.0 37.8 Primary balance (% of GDP) -3.7 -0.9 -3.5 -3.3 -2.9 -2.6 1,2 International poverty rate ($2.15 in 2017 PPP) 18.1 18.1 17.9 17.6 17.0 16.5 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 38.4 38.2 38.1 37.2 36.7 35.8 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 67.8 67.2 66.9 65.9 65.2 64.4 GHG emissions growth (mtCO2e) 2.0 1.3 1.8 1.6 1.7 1.6 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2015-EESIC. Actual data: 2014. Nowcast: 2015-2024. Forecasts are from 2025 to 2027. 2/ Projection using neutral distribution (2014) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU. Macro Poverty Outlook / April 2025 21 This outlook reflects information available as of April 10, 2025. DEMOCRATIC REP. 1 2 Population Poverty million millions living on less than $2.15/day 109.3 75.8 OF CONGO Life expectancy at birth years 3 School enrollment primary (% gross) 4 The DRC’s economy slowed down in 2024 but remained 59.7 119.9 5 6 resilient. Positive terms-of-trade, strong export earnings, GDP GDP per capita current US$, billion current US$ and FDI inflows contributed to building up foreign reserves, stabilizing the Congolese franc, and lowering inflation rates. 77.7 710.9 However, escalating conflict in the East has increased secu- Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2020 (2017 PPPs). 3/ 2022. rity costs and strained the fiscal situation. While growth 4/ 2023. 5/ 2024. 6/ 2024. prospects are favorable, economic growth has yet to trans- late into significant poverty reduction. set to benefit from structural reforms supported by the IMF Ex- Key conditions and challenges tended Credit Facility, Resilience and Sustainability Facility, and the World Bank's Development Policy Financing. These programs The Democratic Republic of Congo (DRC) has faced decades of aim to enhance macroeconomic stability, financial management, insecurity in its eastern region. Mineral-rich areas have become public administration, business climate, governance, and trans- battlegrounds for armed groups, creating an illicit economy of parency. However, volatile security and high dependence on ex- natural resource exploitation. The situation worsened with the tractive industries expose the DRC to fluctuating global commod- loss of control over North Kivu and South Kivu, causing an esti- ity prices and demand, impacting growth and fiscal revenue. Ad- mated US$900 million decline in government revenue. This tur- dressing challenges in DRC requires significant national and inter- moil affects 14 percent of DRC's population, leading to significant national engagement to strengthen governance, bolster conflict human rights violations and a surge in internally displaced per- resolution, and restore security and state authority. sons (IDPs), with over 400,000 new IDPs in January 2025 alone, adding to the existing 4.6 million in the Kivu. The conflict exacer- bates challenges like widespread extreme poverty and poor ser- Recent developments vice delivery. Weak governance, resource exploitation by armed factions, and high socioeconomic vulnerability contribute to ongo- The economy showed resilience, growing by 6.5 percent in 2024, ing violence and economic difficulties, hindering sustainable de- moderating from 8.6 percent in 2023. Growth was driven by the velopment and poverty reduction. The current escalation, main- extractive industry, which increased by 12.8 percent. Copper and ly in North Kivu and South Kivu, increases the fiscal impact of cobalt production, key exports, rose by 12.1 percent and 30.1 per- the government's response and could undermine the administra- cent in 2024, respectively, due to increased domestic production tion's reform agenda and economic stability. The economy was from the Kamoa-Kakula mining project. Non-mining sectors grew FIGURE 1 / Real GDP growth and sectoral contributions to real FIGURE 2 / Actual and projected poverty rates and real GDP per GDP growth capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 10 100 180000 90 160000 8 80 140000 70 6 120000 60 100000 4 50 80000 40 60000 2 30 20 40000 0 10 20000 2020 2021 2022 2023 2024 2025 2026 2027 0 0 Agriculture Industry 2012 2014 2016 2018 2020 2022 2024 2026 Services Net taxes on production International poverty rate Lower middle-income pov. rate GDP at constant prices Upper middle-income pov. rate Real GDP pc Sources: Democratic Republic of Congo Statistical Authorities and World Bank. Source: World Bank. Notes: See footnotes in table on the next page. 22 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. by 3.2 percent, supported by construction and services. Poverty cobalt exports for four months starting February 2025 to address remained high at 72.9 percent in 2024, highlighting the difficulty oversupply. With cobalt production closely tied to copper’s, this of converting resource-driven growth into broad-based improve- may cause storage challenges and higher costs for mining compa- ments in living standards. nies. Non-mining sectors will gradually support growth, reaching 5.9 percent by 2027 (from 3.8 percent in 2025), driven by construc- The current account deficit (CAD) narrowed to 3.4 percent of GDP tion and infrastructure. Growth is fueled by private investment and in 2024 (from 6.3 percent in 2023) due to increased mining ex- exports. However, it is difficult to gauge the full impact of recent ports, despite high infrastructure costs and income payments to measures as policy shifts may continue to unfold. The CAD is ex- foreign investors. Foreign direct investment (FDI) and external fi- pected to widen to 4.2 percent of GDP in 2025 due to the cobalt nancing boosted foreign reserves to 2.5 months of imports at export ban but will narrow to 3.5 percent by 2027 with rising cop- end-2024, limiting exchange rate fluctuations. The CDF depreci- per export earnings. FDI and external financing will uplift reserves, ated by 8.7 percent at the end of 2024, leading to a drop in in- expected to cover three months of imports by 2027. A strong ex- flation to 11.3 percent. The central bank (BCC) pursued a tight ternal position and absence of BCC’s financing of the budget deficit monetary policy, raising its primary rate from 8.25 percent to 25 will support a stable currency and contain inflation to the medium- percent over three years. term target of 7 percent. Despite increased revenue from mining exports and tax collection, High public-sector wage bills and security costs will keep spending high security costs and wages widened the fiscal deficit to 2.0 per- levels high, worsening the fiscal deficit to 3.8 percent of GDP in cent of GDP in 2024 (from 1.7 percent in 2023). Total expenditures 2025 before decreasing to 1.9 percent by 2027 due to expenditure rose slightly to 16.8 percent of GDP. Military spending remained control and tax administration measures. Defense spending could at 2.0 percent of GDP, while capital spending rose to 3.9 percent rise above 2.5 percent of GDP in 2025 (from 2 percent in 2024), po- (from 3.7 percent in 2023). Higher domestic revenue at 14.4 per- tentially impacting social expenditures and poverty reduction. The cent of GDP in 2024 (from 13.8 percent in 2023) partially offset the government is amending the 2025 budget due to fiscal pressures increase in expenditure, with the balance covered by domestic and from the ongoing conflict. external concessional borrowing. Public debt remained low at 22.1 percent of GDP, with a moderate risk of distress. Extreme poverty is projected to decrease to 71.8 percent by 2026 given favorable economic prospects. Stronger poverty reduction will require using natural resource revenues for pro-poor invest- Outlook ments. Risks are tilted to the downside, as the impact of commod- ity price declines may compound the potential effects of trade un- GDP growth is expected to slow to 5.1 percent in 2025-27 as mining certainty and continued conflict in the east, and persistent health production expansion decelerates. The government suspended outbreaks (mpox) would further strain public spending. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 8.9 8.6 6.5 4.8 5.0 5.3 Private consumption 3.1 3.5 3.7 3.8 3.9 4.0 Government consumption 22.2 -12.9 9.1 9.2 5.0 4.5 Gross fixed capital investment 27.7 98.0 11.3 5.5 5.6 6.0 Exports, goods and services 18.9 15.7 12.9 4.6 5.4 6.0 Imports, goods and services 24.9 85.6 11.6 5.2 5.2 5.6 Real GDP growth, at constant factor prices 8.9 8.6 6.5 4.8 5.0 5.3 Agriculture 2.4 2.2 2.3 2.5 2.5 2.5 Industry 15.7 14.6 10.2 6.0 6.1 6.0 Services 3.3 3.0 2.6 3.8 4.3 5.4 Employment rate (% of working-age population, 15 years+) 62.7 62.8 62.8 62.8 62.8 62.8 Inflation (consumer price index) 9.3 19.9 17.7 8.9 7.5 7.0 Current account balance (% of GDP) -4.9 -6.3 -3.4 -4.2 -4.0 -3.5 Fiscal balance (% of GDP) -0.9 -1.7 -2.0 -3.8 -2.4 -1.9 Revenues (% of GDP) 16.6 15.1 15.0 14.5 15.9 16.5 Debt (% of GDP) 21.8 24.3 22.1 26.0 25.3 24.2 Primary balance (% of GDP) -0.5 -1.3 -1.6 -3.5 -1.8 -1.3 1,2 International poverty rate ($2.15 in 2017 PPP) 76.0 74.3 72.9 72.5 71.8 70.9 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 90.6 89.7 89.3 89.1 89.0 88.5 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 97.2 97.0 96.8 96.8 96.7 96.6 GHG emissions growth (mtCO2e) 0.2 0.2 0.1 0.1 0.1 0.2 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2020-EGI-ODD. Actual data: 2020. Nowcast: 2021-2024. Forecasts are from 2025 to 2027. 2/ Projection using neutral distribution (2020) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU. Macro Poverty Outlook / April 2025 23 This outlook reflects information available as of April 10, 2025. REPUBLIC OF 1 2 Population Poverty million millions living on less than $3.65/day 6.2 2.7 CONGO Life expectancy at birth years 3 School enrollment primary (% gross) 4 Income per capita modestly increased in 2024 for the first 63.1 89.0 5 6 time since 2015. Poverty is thus estimated to be stable. GDP GDP per capita current US$, billion current US$ Tax reforms drove an estimated budget surplus of 2.0 percent of GDP in 2024. Modest growth (2.8 percent) is 15.7 2509.0 expected in 2025, held back by global trade policy uncer- Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2011 (2017 PPPs). 3/ 2022. tainty, anticipated decline in oil prices, and tightened inter- 4/ 2023. 5/ 2024. 6/ 2024. national financial conditions. balanced exploitation of natural resources, and a strengthened Key conditions and challenges institutional and business environment. Between 2015 and 2023, the Republic of Congo’s real GDP shrank annually on average by -1.9 percent, resulting in a 32.3 percent Recent developments decline in GDP per capita. The 2014-16 oil price collapse and the COVID-19 pandemic led to a prolonged recession and an increase in In 2024, the Republic of Congo experienced modest growth of 2.6 extreme poverty from 33.5 percent in 2015 to 46.6 percent in 2022. percent, driven by a 3.9 percent increase in the non-oil sectors, de- spite a 1.7 percent decline in oil production due to technical issues. The debt-to-GDP ratio peaked at 103.5 percent in 2020 but de- This allowed the country to register its first increase in GDP per creased to 93.5 percent in 2024 due to rising oil prices, improved capita (0.3 percent) since 2015. The poverty rate has remained rel- debt management, and restructuring agreements. Persistent liq- atively flat (from 46.8 percent to 46.7 percent). uidity pressures prompted the government to implement the Na- tional Treasury Optimization Program (NTOP) to reprofile CFA Revenue losses from lower oil prices and production have been off- 2,314 billion of regional debt. However, Congo remains in debt dis- set by increased non-oil tax revenues. However, the fiscal surplus tress due to persistent accumulation of external arrears. has decreased due to higher social expenditures, wage bills, inter- est payments, and public investments. The debt-to-GDP ratio im- The economy's reliance on oil revenues and structural weakness- proved from 96 percent in 2023 to 93.5 percent in 2024. es in non-oil sectors expose it to oil price volatility and hinder long-term growth. Boosting long-term growth requires diversifica- The current account surplus decreased from 8.6 percent of GDP tion of national assets, investment in human and physical capital, in 2023 to 4.0 percent in 2024 due to a decline in exports. In the FIGURE 1 / Real GDP growth FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent change Poverty rate (%) Real GDP per capita (constant LCU) 6 100 1200000 4 90 1000000 2 80 70 0 800000 60 -2 50 600000 -4 40 -6 400000 30 -8 20 200000 -10 10 -12 0 0 2019 2020 2021e 2022e 2023e 2024f 2025f 2026f 2027f 2011 2013 2015 2017 2019 2021 2023 2025 2027 International poverty rate Lower middle-income pov. rate Oil GDP Non-Oil GDP Real GDP Upper middle-income pov. rate Real GDP pc Source: World Bank. Source: World Bank. Notes: See footnotes in table on the next page. 24 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. second half of 2024, the government faced significant debt service percent of GDP), and expenditures on goods and services (by 0.2 per- obligations coming due in the regional market which led to sub- cent of GDP). This would result in a budget surplus of 2.7 percent of stantial liquidity pressures. These pressures led to the accumula- GDP and a decrease in public debt to 89.6 percent of GDP in 2025. tion of both external and internal arrears, impeding the execution of essential expenditures, such as social services and the payment Due to the projected decline in oil prices, the current account is of certain salaries. To mitigate these fiscal challenges, the govern- expected to record a deficit (3.1 percent of GDP) since 2016. This ment implemented the NTOP, reprofiling 40 percent of domestic deficit is driven by a significant drop in export revenues that the an- debt (FCFA 935.6 billion) and thereby extending average maturity ticipated decrease in the import bill will not offset. from 2.3 to 6.4 years. The banking sector remains liquid but vulner- able to non-performing loans at 18.2 percent of total loans. Inflationary pressures are expected to further decrease, and infla- tion should reach the CEMAC convergence criterion of 3 percent Inflation decreased from 4.3 to 3.8 percent between 2023 and 2024 over 2026-2027. but remained above the BEAC target of 3 percent. To boost growth in CEMAC countries, the BEAC reduced its policy rate from 5 to 4.5 Following three payment delays on the regional market in 2024 and percent in March 2025. the NTOP, banks showed lower appetite for Congolese public secu- rities. Between December 2023 and December 2024, the subscrip- tion rate for Treasury Bills in the regional market dropped sharply Outlook from 73 percent to 12.74 percent, and for Treasury Bonds from 36 percent to 14 percent. However, the average subscription rate The Congolese economy is projected to grow by 2.8 percent in has recently shown improvement, with Treasury Bills and Treasury 2025 and 3.1 percent on average during 2026-2027, slightly reduc- Bonds increasing from 12.74 percent in December 2024 to 30.70 ing poverty by 0.2 in 2025, driven by modest growth in both the percent in January 2025, and further to 67.78 percent in March oil and non-oil sectors. Uncertainties in global trade policy, declin- 2025. Nonetheless, investors are demonstrating a stronger prefer- ing oil prices, and tightening international financial conditions are ence for short-term maturities. To rebuild investors’ confidence in expected to dampen private investment, particularly in the non- treasury securities, the government has committed to implement- oil sector. Despite early-year investments in the oil sector, reduced ing debt and cash management reforms. global demand and lower oil prices are projected to decrease ex- port revenues and constrain production. The Congolese economy faces significant risks from tightening in- ternational financial conditions, declining oil prices, and reduced Despite progress in mobilizing non-oil revenues, significant fiscal global demand. It is difficult to gauge the full impact of recent mea- consolidation will be required in 2025 due to the sharp decline in oil sures as global policy shifts and uncertainty may continue to un- revenues and tighter financing conditions. This will entail reductions fold. Continued monitoring and proactive policy measures are es- in public investment (by 1 percent of GDP), current transfers (by 0.8 sential to support sustainable growth and fiscal stability. Recent history and projections 2022 2023e 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 1.5 1.9 2.6 2.8 3.1 3.0 Private consumption 5.0 4.9 6.5 5.1 3.5 3.6 Government consumption -5.0 0.6 0.5 -6.5 3.2 4.1 Gross fixed capital investment 10.0 8.6 5.6 3.0 3.1 3.8 Exports, goods and services -0.7 1.0 -0.5 3.0 3.9 1.7 Imports, goods and services 5.9 8.9 5.0 2.0 4.6 2.8 Real GDP growth, at constant factor prices 1.5 1.9 2.5 2.7 3.2 3.1 Agriculture 3.0 2.8 4.2 2.3 3.3 3.4 Industry -0.6 0.7 0.3 3.0 3.7 2.2 Services 4.4 3.4 4.3 2.9 3.1 4.2 Employment rate (% of working-age population, 15 years+) 53.9 54.4 54.4 54.4 54.4 52.7 Inflation (consumer price index) 3.0 4.3 3.8 3.8 3.0 3.0 Current account balance (% of GDP) 15.4 8.6 4.0 -3.1 1.3 1.7 Net foreign direct investment inflow (% of GDP) 7.9 9.5 5.0 5.5 5.5 5.3 Fiscal balance (% of GDP) 7.9 3.6 2.0 2.7 3.4 3.6 Revenues (% of GDP) 28.6 24.3 25.2 23.9 25.2 26.4 Debt (% of GDP) 86.6 96.0 93.5 89.6 83.2 79.3 Primary balance (% of GDP) 10.2 6.4 5.6 6.5 6.1 6.2 1,2 International poverty rate ($2.15 in 2017 PPP) 46.6 46.8 46.7 46.5 46.1 45.5 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 70.9 71.0 70.9 70.7 70.3 70.1 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 90.7 90.8 90.7 90.7 90.4 90.4 GHG emissions growth (mtCO2e) 2.8 2.5 2.3 1.4 1.2 0.6 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2011-ECOM. Actual data: 2011. Nowcast: 2012-2024. Forecasts are from 2025 to 2027. 2/ Projection using neutral distribution (2011) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU. Macro Poverty Outlook / April 2025 25 This outlook reflects information available as of April 10, 2025. 1 2 CÔTE D'IVOIRE Population Poverty million millions living on less than $3.65/day 31.9 11.4 3 4 Life expectancy at birth School enrollment Growth remained strong at 6 percent in 2024 thanks to years primary (% gross) fiscal management and better terms of trade, bolstering investor confidence. Lower middle-income poverty de- 63.5 101.7 5 6 creased from 38.9 to 37.1 percent. Trade uncertainties GDP GDP per capita will affect 2025. Structural reforms under the new Devel- current US$, billion current US$ opment Plan and rising extractive production should sup- port productivity-led growth and quality job creation in 87.2 2729.1 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2021 (2017 PPPs). 3/ 2021. the medium-run. 4/ 2023. 5/ 2024. 6/ 2024. Key conditions and challenges Recent developments The Ivorian economy remained resilient against global and Economic growth should slow to 6 percent in 2024 from 6.5 per- regional crises, achieving 6.6 percent real growth (4.0 per- cent in 2023, reflecting weaker construction activity and subdued cent per capita) over 2021–2023. However, poverty at the agricultural recovery. Improved farmgate prices and the dimin- lower middle-income poverty line varied around 38.4–38.9 ishing effects of El Niño boosted the yields of cocoa and cot- percent during this period, indicating limited growth impact tonseed, while outputs of cashew and banana declined. Indus- on poverty. To halve poverty and attain upper- middle-in- try momentum decelerated as buoyant hydrocarbon and gold come status by 2030, amidst global and climatic uncertain- were partly countered by the construction decline. Service growth ties, the country needs to focus on productivity-led growth was primarily driven by telecommunications and transportation. that creates quality jobs through deeper structural reforms, On the demand side, private consumption and investment drove skilling the workforce, increasing foreign direct investment growth. Declining inflation, higher cocoa farmgate prices and (FDI), and enhancing fiscal space driven by revenue col- increased employment supported domestic demand. Public in- lection. Strong economic management and prospects, and vestment and consumption contributed 0.5 ppts to growth in growing hydrocarbon and extractive production have im- 2024, as in 2023, reflecting continued fiscal consolidation. Exter- proved investor confidence, leading to upgraded risk ratings nal trade contributed -1.1 ppts, as imports outpaced exports. by major rating agencies. Nevertheless, significant headwinds including trade tensions, uncertainties related to global trade Despite increased energy tariffs, inflation decreased to 3.5 percent and the October 2025 elections, regional insecurity, renewed in 2024 from 4.4 percent in 2023, reflecting tightened monetary inflationary pressures, and climate change, pose risks to mar- policy, softening commodity and food prices. The West African Eco- ket confidence, supply chains, external and fiscal sustainability, nomic and Monetary Union (WAEMU) inflation rate declined further and financial stability. in 2024 to 3.5 percent but remained above the 1–3 percent WAEMU FIGURE 1 / Budget balance and change in public debt FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent of GDP Poverty rate (%) Real GDP per capita (constant million LCU) 10 100 1.8 8 90 1.6 6 80 1.4 4 70 1.2 2 60 1.0 50 0 0.8 40 -2 0.6 30 -4 0.4 20 -6 0.2 10 -8 0 0.0 2015 2017 2019 2021 2023 2025 2027 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 Changes in government debt Budget balance International poverty rate Lower middle-income pov. rate WAEMU fiscal budget target Upper middle-income pov. rate Real GDP pc Source: World Bank. Source: World Bank. Notes: See footnotes in table on the next page. 26 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. target band. Regional foreign reserves increased from 3.5 months investment. This should attract more FDI and boost the do- of imports in 2023 to 4.7 months in 2024, reflecting the resump- mestic private sector, improve trade competitiveness, and devel- tion of international bond issuances, IMF and World Bank dis- op agricultural value chains. Sustained investments in transport bursements, and improved terms of trade in Cote d’Ivoire, the and digital infrastructure investments will foster productivity-led, main regional contributor to WAEMU reserves. The Central Bank quality job-creating and more inclusive growth in the medium of West African States kept its policy interest rates unchanged term. Additionally, a thriving extractive exploitation could signifi- throughout 2024 at 3.5 percent for liquidity calls and 5.5 percent cantly enhance prospects, further boost investor confidence, and for the marginal lending facility. ease financing conditions. The fiscal deficit is set to decrease from 5.2 percent of GDP in 2023 The new Medium-Term Revenue Strategy aims to mobilize domes- to 4 percent in 2024, thanks to revenue-based fiscal consolidation tic revenue to reduce the fiscal deficit to the 3 percent regional and some expenditure measures. Revenues rose 0.4 ppts to 16.5 target by 2025. It also aims to stabilize debt at 58 percent of GDP percent of GDP in 2024, although the tax-to-GDP growth fell short and allow for sustained prioritization of social and infrastructure of its target by 0.3 ppt. This led to a 0.4 ppts-cut in capital expen- spending. Improved terms of trade and private sector-led export diture and reduced security spending. Financing needs were met diversification should boost the trade balance and narrow the CAD. through regional market borrowing (one-third) and external bor- The regional inflation rate is expected to align with the WAEMU tar- rowing (two-thirds), increasing public debt to 59.6 percent of GDP get band from 2025 onwards, while regional reserves are projected from 58.5 percent in 2023. The current account deficit (CAD) is set to rise to 5.4 months of imports in 2025, supported by recovering to narrow significantly, from 8.2 percent of GDP in 2023 to 4.5 per- exports, and lower Euro Area interest rates. cent in 2024, driven by stronger terms of trade (+19.1 percent) and an improved fiscal stance. In 2025, subdued inflation and strong nominal growth in the agri- cultural sector, driven by higher export prices, should further re- duce poverty from 37.1 percent in 2024 to 34.0 percent in 2025 (at Outlook $3.65/day, 2017 PPPs). However, poverty reduction is set to mod- erate in 2025–2027, averaging a 0.7 percentage point decrease as Despite persistent global economic uncertainties, and Cote agricultural nominal growth abates. Risks to the outlook remain tilt- d’Ivoire’s commodity export exposure to trade uncertainty, ed to the downside. Downside risks to growth from global trade un- growth should remain strong though moderate to 5.8 percent certainty arise through the commodity price and investment chan- in 2025 and average 6.3 percent in 2026–2027. The forthcoming nels. Climate change threatens agriculture, while regional insecu- development plan aims to deepen structural reforms, improve rity and election related-uncertainty risk weakening market senti- human capital and skills, and enhance the efficiency of public ment, and tightening financing conditions. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 6.4 6.5 6.0 5.8 6.1 6.4 Private consumption 4.6 5.5 6.3 6.0 5.5 5.7 Government consumption 4.0 3.9 3.1 2.3 -0.4 -1.4 Gross fixed capital investment 13.2 8.5 10.5 7.0 10.9 10.5 Exports, goods and services 11.9 4.8 0.2 3.9 7.5 9.1 Imports, goods and services 21.1 7.7 4.0 4.0 8.4 8.9 Real GDP growth, at constant factor prices 6.1 6.4 6.0 5.8 6.1 6.4 Agriculture 5.9 -2.1 3.5 5.1 2.0 3.2 Industry 12.0 18.5 2.8 6.5 7.0 10.7 Services 3.7 3.8 8.4 5.7 6.9 5.2 Employment rate (% of working-age population, 15 years+) 63.7 63.7 63.7 63.7 63.7 61.8 Inflation (consumer price index) 5.2 4.4 3.5 3.0 2.6 2.3 Current account balance (% of GDP) -7.6 -8.2 -4.5 -4.1 -3.9 -4.0 Net foreign direct investment inflow (% of GDP) 2.0 2.5 3.8 3.7 3.2 3.0 Fiscal balance (% of GDP) -6.7 -5.2 -4.0 -3.0 -3.0 -3.0 Revenues (% of GDP) 15.1 16.1 16.5 17.1 17.4 18.1 Debt (% of GDP) 57.3 58.5 59.6 58.6 57.1 55.8 Primary balance (% of GDP) -4.6 -2.7 -1.3 -0.3 -0.4 -0.4 1,2 International poverty rate ($2.15 in 2017 PPP) 9.2 10.5 8.8 7.2 6.8 7.0 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 37.4 38.9 37.1 34.0 33.0 32.6 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 76.0 76.3 76.1 74.7 73.7 72.7 GHG emissions growth (mtCO2e) 1.7 0.4 0.2 0.3 0.8 1.0 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2021-EHCVM. Actual data: 2021. Nowcast: 2022-2024. Forecasts are from 2025 to 2027. 2/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 27 This outlook reflects information available as of April 10, 2025. EQUATORIAL 1 2 Population Poverty million millions living on less than $6.85/day 1.9 1.0 GUINEA Life expectancy at birth years 3 School enrollment primary (% gross) 4 The economy grew by an estimated 1.6 percent in 2024, 61.2 107.8 5 6 driven by a rebound in the hydrocarbon sector. Poverty is GDP GDP per capita current US$, billion current US$ estimated to have increased on account of sluggish growth in agriculture and services, along with rising food prices. 12.8 6786.7 Fiscal and external balances improved thanks to increased Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2022 (2017 PPPs). 3/ 2022. export earnings. GDP is projected to contract over the medi- 4/ 2022. 5/ 2024. 6/ 2024. um term. A sharper-than-expected decline in oil production and prices represents the main risk to the outlook. reforms are encouraging, including a decree establishing a trea- Key conditions and challenges sury single account, a new draft procurement law, a revised tax law, and a Presidential decree with measures to support the sus- Equatorial Guinea has experienced a prolonged recession over tainability of the economy and public finances. much of the past decade amid a shrinking hydrocarbon sector, declining investment, and a series of external and domestic shocks. In 2023, gross national income per capita was estimated Recent developments at US$5,240, which was 58 percent below its peak level in 2008. In 2022, 54.8 percent of the population lived on less than $6.85 Following a contraction by 5.1 percent in 2023, the Equatoguinean per person per day (in 2017 PPP). Despite high levels of urban- economy is estimated to have modestly recovered in 2024. GDP is ization, about 24 percent of the population lacked access to elec- estimated to have grown by 1.6 percent, driven by a rebound in the tricity, 32.4 percent lacked access to piped water or a water well, hydrocarbon sector, offsetting sluggish growth registered in agri- and 20.3 percent lacked adequate sanitation. The education sys- culture (0.4 percent) and services (0.04 percent) sectors. tem underperforms, suffering from overcrowding and high rep- etition rates, resulting in primary and secondary net enrollment Fiscal revenues exceeded anticipated levels by 0.5 percent in rates of 82 and 59 percent, respectively. 2024H1 while expenditure execution reached 98 percent by end- June 2024. A 6.4 percent increase in hydrocarbon production in Strong reforms are needed to diversify the growth drivers and 2024H2 (thanks to repairs and the connection of wells at the productive assets. These include improving domestic revenue Zafiro platform) raised the fiscal balance to an estimated 2.6 mobilization and the efficiency of public spending, strengthening percent of GDP. Meanwhile, the non-oil fiscal deficit widened the business environment, and investing in human capital. Recent slightly from 23.3 to 23.4 percent of non-oil GDP between 2023 FIGURE 1 / Public finances FIGURE 2 / Actual and projected poverty rates Percent of GDP Poverty rate (%) 30 60 25 50 20 40 15 30 10 20 5 10 0 0 -5 2022 2023 2024 2025 2026 2027 2017 2018 2019 2020 2021 2022 2023 2024f 2025f 2026f 2027f International poverty rate Lower middle-income pov. rate Fiscal balance Revenues Expenditures Upper middle-income pov. rate Sources: National authorities and World Bank. Source: World Bank. Notes: See footnotes in table on the next page. 28 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. and 2024. The current account deficit is estimated to have nar- global financial environment will also have adverse impacts on rowed to 0.9 percent of GDP thanks to an increase in hydrocar- the country’s fiscal and trade balances and investment. Without bon export earnings. significant progress in diversification and structural reforms, the decline of the hydrocarbon sector and lower oil prices will con- The debt-to-GDP ratio declined to 31.3 percent in 2024. The gov- tinue to undermine the Equatoguinean economy. Growth could ernment has recently negotiated arrears settlements with banks reach 0.6 percent in 2026, following an expected rebound in the and construction companies over a period of 10 years. As a result, gas sector, before contracting again in 2027. Between 2024 and the ratio of non-performing loans to total loans decreased to 30 2027, poverty is expected to decline from 57.0 percent to 55.8 percent by July 2024 from 32.5 percent in end-2023 and is expected percent, following an expansion in the labor-intensive agriculture to continue declining. After keeping the policy rate at 5 percent for and service sectors. two years, the Bank of Central African States lowered it to 4.5 per- cent in March 2025. Still, overall inflation increased from 2.4 to 3.4 Despite fiscal consolidation, the fiscal balance is projected to de- percent between 2023 and 2024, mainly on account of higher food crease in 2025-2027, as spending cuts fail to offset declining hydro- inflation (4.1 percent). carbon revenues due to the anticipated drop in oil prices and pro- duction. The current account balance is projected to deteriorate to Sluggish growth in agriculture and services, along with soaring food an average of 2.5 percent of GDP over 2025-2027 due to declining prices, did not boost job creation and earnings enough to maintain export earnings. The impact of commodity price declines may com- living standards, leading to a 1.2 percentage point rise in poverty. pound the potential effects of global trade uncertainty. Downside risks to the outlook include a stronger decline in hydro- Outlook carbon production or prices; heightened global economic uncer- tainty and trade policy shifts which can impact exports and po- Another recession is expected in 2025 with a forecasted growth tentially deter investment and increase food prices and insecurity; of -3.1 percent as hydrocarbon production decreases and oil tighter global financial conditions; and lower demand from main prices fall amid the shifting international trade, investment, and trading partners (China and the European Union). It is difficult to financial and commodity markets context. Aside from their im- gauge the full impact of recent events as global policy shifts may pact on economic growth, lower projected oil prices and a tighter continue to unfold. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 3.2 -5.1 1.6 -3.1 0.6 -1.1 Private consumption 3.9 4.4 -5.0 1.9 2.0 1.8 Government consumption 7.0 5.7 1.0 -7.5 1.3 -0.4 Gross fixed capital investment 7.6 11.1 0.0 -9.0 1.7 -3.0 Exports, goods and services 5.7 -28.9 6.9 -2.9 0.6 -1.9 Imports, goods and services 11.2 -25.5 -1.8 -0.4 3.8 2.6 Real GDP growth, at constant factor prices 2.9 -4.7 1.6 -3.1 0.6 -1.1 Agriculture 6.9 2.4 0.4 3.2 2.0 2.1 Industry 1.8 -12.9 2.9 -10.6 0.5 -2.6 Services 4.4 7.6 0.0 6.2 0.7 0.3 Inflation (consumer price index) 4.9 2.4 3.4 2.9 2.6 2.1 Current account balance (% of GDP) -0.9 -1.5 -0.9 -2.5 -2.1 -2.8 Net foreign direct investment inflow (% of GDP) 4.9 1.2 1.0 0.8 0.6 0.6 Fiscal balance (% of GDP) 11.4 2.5 2.6 0.4 0.5 -0.4 Revenues (% of GDP) 26.5 21.9 22.3 19.6 19.1 17.4 Debt (% of GDP) 33.4 36.9 31.3 31.5 29.4 27.8 Primary balance (% of GDP) 12.5 3.6 3.7 1.5 1.5 0.5 1,2 International poverty rate ($2.15 in 2017 PPP) 4.2 4.5 5.0 4.7 4.8 4.9 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 20.8 21.6 22.9 22.2 22.3 22.6 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 54.8 55.8 57.0 54.8 54.8 55.8 GHG emissions growth (mtCO2e) 1.9 -5.4 1.5 -3.1 0.2 -0.7 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2022-ENH2. Actual data: 2022. Nowcast: 2023-2024. Forecasts are from 2025 to 2027. 2/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 29 This outlook reflects information available as of April 10, 2025. 1 ERITREA Population Poverty million 3.5 .. 2 3 Life expectancy at birth School enrollment Growth in 2024 was supported by strong mining activity and years primary (% gross) lower inflation as a result of moderation of global fuel and food prices. Increased government spending and investment 66.6 83.0 4 5 to develop the Colluli potash mine is expected to support GDP GDP per capita growth of around 3.5 percent in the near term. Downside current US$, billion current US$ risks to the outlook include production delays at the Colluli mine, volatility in global commodity prices, geopolitical and 2.9 822.0 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2022. 3/ 2022. 4/ 2024. 5/ 2024. regional tensions, and climate vulnerabilities. (including roads and key ports), that present both operational and Key conditions and challenges logistical constraints. Furthermore, the absence of a competition law framework discourages foreign capital inflows, as do strict im- Eritrea is a subsistence agriculture economy that relies on the min- port restrictions. The latter also limit foreign currency demand ing industry (mainly zinc and gold) for foreign exchange. About 70 amid low reserves. Informal cross-border trade has improved since percent of the population lives in rural areas, relying on rainfed the conflict in northern Ethiopia ended. farming, livestock, and fisheries. Frequent weather shocks due to climate change impact economic activity and livelihoods. The capacity to produce data remains severely constrained. National accounts data are limited to unofficial GDP esti- With the lifting of UN sanctions in November 2018 Eritrea emerged mates by the Ministry of Finance, which are not, however, from a decade of international isolation, a period during which endorsed by the government. Inflation estimates cover only As- it relied on domestic sources of growth. Competition is limited mara, the capital city, and full balance of payment accounts are by state-owned enterprises' dominance and widespread govern- not being produced. Poverty statistics have not been produced ment restrictions. Zinc, copper, and gold account for more than for over a decade. 90 percent of exports, making the economy susceptible to fluc- tuations in metal prices and external demand from China, which accounts for over 50 percent of total exports. Fiscal dominance Recent developments and the underdeveloped financial sector have rendered mone- tary policy under a fixed exchange rate ineffective, weakening Real GDP growth is estimated to have increased to 2.9 percent in economic fundamentals. 2024, mainly supported by strong copper and gold mining output and the moderation in global food and fuel prices which support- Despite vast mineral and commodity wealth the development of ed a rise in private consumption. Meanwhile, inflation continued its the mining sector is constrained by under-developed infrastructure downward trend falling to 4.1 percent in 2024. FIGURE 1 / Evolution of total public debt FIGURE 2 / Primary and overall fiscal balances Percent of GDP Percent of GDP 250 0 -1 200 -2 150 -3 100 -4 50 -5 0 -6 2021 2022 2023 2024e 2025f 2026f 2027f 2021 2022 2023 2024e 2025f 2026f 2027f Domestic debt External debt Total public debt Overall fiscal balance Primary fiscal balance Sources: Ministry of Finance, Planning and Economic Development, IMF, and World Sources: Ministry of Finance, Planning and Economic Development, IMF, and World Bank staff estimates. Bank staff estimates. 30 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. Eritrea continued to maintain a large current account surplus the Colluli mine. As global food prices continue to ease, average in- which improved in 2024 supported by strong increase in global flation is expected to decrease further and stabilize around 4 per- metal prices amid tight import and capital controls. International cent in the near term.The current account surplus is expected to gold prices rose 23 percent to multi decade highs amid global risk remain large at around 14 percent of GDP in 2025, helped by ro- aversion and geo-political risk, contributing to higher export rev- bust mining sector performance amid tight import controls. How- enues. Higher zinc and copper prices resulted in strong mining ex- ever, the current uncertainly in global trade policy could hurt ex- port revenues as well as higher government revenues. Public debt port prospects although operationalizing of the Colluli project was estimated at around 211 percent of GDP at end-2024, of which might play an offsetting role in later years. Gradual fiscal consolida- nearly 80 percent is owed to domestic banks. The country is in debt tion and higher mining sector receipts should support a narrowing distress, and as of May 2024, Eritrea was at a pre-decision point in of the fiscal deficit over the medium term.Once Colluli mining com- the Highly Indebted Poor Countries (HIPC) list. mences it is expected to generate annual revenues of US$200mn. The economic recovery is expected to support a reduction in the Following an engagement hiatus in 2020, Eritrea has begun to public debt-to-GDP ratio. The poverty rate is not expected to de- re-engage with international development partners and revitalize cline significantly in the coming years, however. Significant im- some bilateral relations since 2023.The African Development Bank provements in the agricultural sector and increased productive has been supporting several projects including the building of a employment in urban areas are critical to addressing the wide- 30-MW solar photovoltaic power plant in Dekemhare, which is spread deprivation in the country. scheduled to be completed in 2027. China is Eritrea’s principal commercial partner dominating the mining and infrastructure Significant downside risks include weaker than-expected global sector as well as being a major trading partner. In early 2023, the or Chinese demand for commodity exports, volatility in metals Chinese company Sichuan Road and Bridge Group acquired a 50 and minerals prices, production delays at the Colluli mine, percent stake in the Colluli potash mine—one of the largest and spillovers from the Sudan conflict, and recent escalation in ten- most easy-to-exploit deposits in the world. Once it becomes oper- sions with Ethiopia. Climate vulnerabilities could intensify in the ational (expected by end-2026), it could contribute up to 10 percent coming years, increasing an already high risk of food insecurity. of GDP value added. Eritrea’s re-engagement with the international community could help to significantly reduce external arrears and provide much- needed financing to build essential infrastructure over the medi- Outlook um term. This would help reduce the risks associated with cli- mate change and foster the development of the private and fi- GDP growth is projected to increase to 3.2–3.5 percent in the near- nancial sectors, which could enhance job creation and promote medium termas domestic demand is boosted by construction of inclusive growth. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 2.5 2.6 2.9 3.1 3.4 3.5 Private consumption 3.6 4.0 2.1 2.3 2.2 2.2 Government consumption 5.7 3.7 1.9 2.0 3.4 4.1 Gross fixed capital investment 13.1 22.7 4.2 4.0 3.7 4.2 Exports, goods and services 9.2 5.1 3.2 3.5 3.3 3.0 Imports, goods and services 11.0 5.3 4.2 4.3 4.3 4.4 Real GDP growth, at constant factor prices 2.5 2.6 2.9 3.1 3.4 3.5 Agriculture 1.6 3.5 3.6 3.2 3.2 3.2 Industry 3.2 2.9 3.3 3.3 3.1 3.1 Services 1.3 1.5 1.6 2.4 4.0 4.7 Inflation (consumer price index) 7.4 6.4 4.1 3.9 4.0 4.0 Current account balance (% of GDP) 13.0 14.1 14.5 13.9 14.0 14.7 Net foreign direct investment inflow (% of GDP) 1.3 1.2 1.2 1.3 1.3 1.0 Fiscal balance (% of GDP) -5.6 -4.8 -4.8 -4.3 -4.1 -4.0 Revenues (% of GDP) 27.0 27.6 26.6 26.9 27.7 28.2 Debt (% of GDP) 239.8 219.4 211.8 202.4 190.8 177.2 Primary balance (% of GDP) -4.2 -3.7 -3.6 -3.1 -2.9 -2.8 GHG emissions growth (mtCO2e) 0.7 0.8 1.3 1.3 1.4 1.3 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. Macro Poverty Outlook / April 2025 31 This outlook reflects information available as of April 10, 2025. 1 2 ESWATINI Population Poverty million millions living on less than $3.65/day 1.2 0.7 3 4 Life expectancy at birth School enrollment Real GDP is projected to grow by 5.0 percent in 2025, driven years primary (% gross) by public and private sector investment. Inflation is expected to rise to 5.6 percent because of higher electricity and water 56.4 113.5 5 6 tariffs and anticipated public wage increases. The budget GDP GDP per capita deficit is projected to increase to 3.5 percent of GDP in 2025 be- current US$, billion current US$ cause of expenditure pressures and lower SACU revenues. The poverty rate is projected to hover around 52 percent, 5.1 4097.2 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2016 (2017 PPPs). 3/ 2022. using the poverty line for lower-middle-income countries. 4/ 2023. 5/ 2024. 6/ 2024. and full implementation of an Integrated Financial Management Key conditions and challenges Information System. Eswatini's long-term growth has been low and volatile, averaging With economic growth both modest and not inclusive, progress less than 2 percent annually, constrained by structural factors such in poverty reduction has been limited. About 53.5 percent of the as a weak business environment, overdependence on Southern population live below the lower-middle-income poverty line of African Customs Union (SACU) revenues, as well as vulnerability to $3.65 per day (2017 PPP). The unemployment rate surged from climate shocks. Overall, Eswatini’s growth performance was signifi- 23 percent in 2016 to 35 percent in 2023, and job opportuni- cantly lower than the average of 4.6 percent among lower-middle- ties are concentrated in the informal sector. Eswatini’s economy income countries. remains one of the most unequal in the world, with a Gini coef- ficient of 54.6 in 2016. Sustainable development necessitates shifting to a private- led economic growth model, by addressing structural chal- lenges to the business climate, strengthening public financial Recent developments management to improve the efficiency and effectiveness of public spending. The public financial management system Economic growth increased to 4.8 percent in 2024, from 3.4 per- faces weaknesses in budget preparation and execution, com- cent in 2023, as most sectors performed well. Growth in the agri- mitment controls, and public procurement processes. These culture sector benefitted in particularly from an increase in sugar inefficiencies have resulted in underspending on capital in- production, while manufacturing, especially soft drink concen- vestments and the accumulation of arrears to the private trates and sugar, benefited from higher external demand. Mining sector, with the stock of arrears rising from 2.4 percent of GDP production expanded because of increased coal output. Stroger in 2023 to 2.7 percent in 2024. Addressing PFM related chal- external demand led to a 13 percent rise in exports, while higher lenges requires adequate implementation of the 2017 PFM Act SACU revenues supported domestic demand. FIGURE 1 / SACU revenues and macroeconomic variables FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent of GDP Months of imports, percent of GDP Poverty rate (%) Real GDP per capita (constant LCU) 16 4 100 70000 90 12 60000 3 80 8 70 50000 60 40000 4 2 50 40 30000 0 1 30 20000 -4 20 10000 10 -8 0 0 0 2018 2019 2020 2021 2022 2023 2024e 2025f 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 Current account (lhs) SACU revenue (lhs) International poverty rate Lower middle-income pov. rate Fiscal deficit (lhs) International reserves (rhs) Upper middle-income pov. rate Real GDP pc Sources: Eswatini Ministry of Finance and World Bank staff projections. Source: World Bank. Notes: See footnotes in table on the next page. 32 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. Inflation slowed from 5.0 percent in 2023 to 4.0 percent in 2024, as finance, information and communication technology (ICT), trans- global inflationary pressures eased. Food inflation eased from 12.8 portation, wholesale, and trade expected to record higher growth. percent to 3.9 percent, but food insecurity remains a challenge, Mining and quarrying are expected to continue expanding in 2025 with 25 percent of the population estimated to be food insecure. -2026, supported by double-digit growth in coal production. Higher The Central Bank lowered the interest rate by 50 basis points to electricity and water tariffs and demand-pulled inflation linked to 7.00 percent between September and November 2024, following the expected public sector wage increases are expected to con- South Africa’s policy rate trend. tribute to inflation of 5.6 percent in 2025. The fiscal situation deteriorated in FY 2024/25, with the fiscal deficit The fiscal deficit is projected to increase to 3.5 percent in 2025 and widening to 2 percent of GDP in 2024/25, up from 0.1 percent in 2023/ 4.5 percent in 2026 as SACU transfers are expected to fall by 20 24 despite an increase in SACU revenues. Public expenditure in- percent in nominal terms in 2025. A higher wage bill and capital creased as the government relaxed the hiring freeze, and as capital expenditure are expected to contribute to the widening of the fis- spending and interest payments rose. Public debt grew to 41 percent cal deficit in 2025-26. Fiscal consolidation is expected to resume in of GDP by the end of 2024 and government arrears with the private 2027, bringing the fiscal deficit down to about 2.7 percent of GDP, sector increased. Higher expenditure arrears partly reflect continued benefitting from public financial and investment management re- deficiencies in cash flow management and commitment controls. forms. Public debt is expected to peak at 42.6 percent of GDP in 2027. The current account surplus is expected to decline as SACU The current account surplus rose from 2.2 percent in 2023 to 3.8 revenues decline while higher capital spending from planned con- percent of GDP in 2024, benefitting from higher SACU revenues struction activities will result in higher imports. and key commodity exports, which more than compensated for the increase in imports. Nevertheless, international reserves declined There are significant risks to this outlook, linked to both global to 2.4 months of import cover in 2024 as the government used re- and domestic developments. Downside risks to the outlook include serves to pay its external obligations. heightened global trade uncertainties that impact Eswatini through both direct and indirect channels, including fluctuations in commod- ity prices, remittances, exchange rates, investment, and weaker Outlook growth in its main trading partners. Domestically, volatile SACU rev- enues and weak control over current spending remain key fiscal risks. Real GDP growth is projected to increase to 5.0 percent in 2025 The suspension of funding from the United States Agency for Inter- driven by public and private sector investments, including in a se- national Development could threaten the delivery of health services, ries of large projects such as the Mkhondvo–Ngwavuma Water pro- while delays in private and public construction projects would damp- ject. However, growth is expected to slow gradually in the medi- en growth prospects. Given this outlook amidst persistently limited um term, to reach about 2.8 percent in 2027 once these invest- job creation, poverty is projected to remain high at around 52 per- ments are completed. Growth is expected to be broad-based, with cent, using the poverty line for lower-middle-income countries. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 1.1 3.4 4.8 5.0 4.0 2.8 Private consumption 5.8 5.1 5.3 5.1 5.5 4.6 Government consumption -3.2 5.3 5.4 6.5 5.7 4.1 Gross fixed capital investment -11.9 10.3 3.4 11.9 7.2 3.3 Exports, goods and services -4.2 9.2 13.0 5.8 4.7 4.2 Imports, goods and services 2.2 12.9 10.0 8.7 8.3 7.0 Real GDP growth, at constant factor prices 0.9 3.3 4.8 5.0 4.0 2.8 Agriculture 3.0 -7.9 6.2 4.4 4.6 5.0 Industry 0.2 0.5 8.4 5.7 6.4 4.0 Services 1.2 6.5 2.4 4.6 2.3 1.7 Employment rate (% of working-age population, 15 years+) 30.6 32.8 32.8 32.8 32.8 32.8 Inflation (consumer price index) 4.8 5.0 4.0 5.6 5.0 4.5 Current account balance (% of GDP) -2.7 2.2 3.8 0.1 0.4 0.4 Net foreign direct investment inflow (% of GDP) 0.7 1.1 1.3 0.9 1.5 1.2 Fiscal balance (% of GDP) -4.8 -0.1 -2.0 -3.5 -4.5 -2.7 Revenues (% of GDP) 26.0 31.7 31.0 29.2 25.4 26.4 Debt (% of GDP) 40.5 40.0 40.9 40.6 42.3 42.6 Primary balance (% of GDP) -2.5 2.8 0.7 -1.1 -1.2 0.3 1,2 International poverty rate ($2.15 in 2017 PPP) 34.6 33.4 31.5 30.3 29.2 28.5 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 56.8 56.2 54.8 53.5 52.6 52.1 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 77.4 77.0 76.5 75.5 75.0 74.7 GHG emissions growth (mtCO2e) 0.7 0.8 2.9 5.1 5.1 2.7 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2016-HIES. Actual data: 2016. Nowcast: 2017-2024. Forecasts are from 2025 to 2027. 2/ Projection using neutral distribution (2016) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU. Macro Poverty Outlook / April 2025 33 This outlook reflects information available as of April 10, 2025. 1 2 ETHIOPIA Population Poverty million millions living on less than $2.15/day 132.1 39.0 3 4 Life expectancy at birth School enrollment years primary (% gross) Macroeconomic reforms initiated in mid-2024 have reduced exchange rate spreads and inflation. Reforms to modernize 65.6 84.5 5 6 monetary policy, mobilize revenues, and enhance safety nets GDP GDP per capita are ongoing. Sustaining reforms and easing barriers to pri- current US$, billion current US$ vate investment and job creation are crucial for external sus- tainability, inclusive growth, and mitigating social risks amid 221.6 1677.8 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2021 (2017 PPPs). 3/ 2022. humanitarian needs. 4/ 2023. 5/ 2024. 6/ 2024. exchange rate, easing current account restrictions, and adopting Key conditions and challenges a new interest rate-based monetary policy. These reforms, backed by the IMF, World Bank, and proposed G-20 debt relief, helped Ethiopia’s state-led development model improved infrastruc- narrow the official-parallel exchange rate spread from over ture and living standards but relied on an overvalued cur- 100 percent to low teens, although it has widened recently rency, unsustainable debt, and restrictive regulations that reaching 20 percent by end-March 2025. Market inefficien- hindered private investment. This weakened competitiveness, cies, including high foreign exchange (FX) fees, incentivize fueled inflation, and failed to generate enough jobs for two continued use of the parallel market. Sustained reforms are million new job seekers annually. Poverty increased from 27 essential for translating macroeconomic improvements into percent to 32 percent between 2016 and 2021 ($2.15/day), better livelihoods, higher earnings, productive jobs, and im- human capital remained low, and agriculture still employs proved public services. 70 percent of the workforce. Limited global trade integra- tion and budget constraints further reduced social and capi- tal spending. Multiple crises, including COVID-19, the Ukraine Recent developments war, the Tigray conflict, and droughts, exacerbated economic imbalances, culminating in a debt default in late 2023. Dou- Ethiopia’s GDP growth was 8.1 percent in FY2023/24, driven ble-digit inflation worsened living standards, while the Tigray by strong harvests, increased mining, and higher electricity conflict displaced over three million people, creating a $20 generation activity. Following the July 2024 exchange rate re- billion humanitarian and reconstruction need. About 15 mil- form, goods exports doubled year-on-year (yoy) in H1 FY25, lion people still rely on food aid. with coffee shifting to export markets and gold moving from informal to official channels. Remittances also grew by 23 per- To stabilize the economy, the government launched macro- cent. Tight monetary conditions, including caps on bank lend- economic reforms in July 2024, targeting a market-determined ing growth (initially 14 percent, later loosened to 18 percent), FIGURE 1 / Nominal exchange rate of Ethiopian Birr (ETB) FIGURE 2 / Actual and projected poverty rates and real GDP per capita ETB/US$ Percent Poverty rate (%) Real GDP per capita (constant LCU) 160 120 100 30000 140 90 100 25000 120 80 80 70 100 20000 60 80 60 50 15000 60 40 40 10000 40 30 20 20 20 5000 10 0 0 0 0 2010 2012 2014 2016 2018 2020 2022 2024 2026 International poverty rate Lower middle-income pov. rate Premium (rhs) Official (lhs) Parallel market (lhs) Upper middle-income pov. rate Real GDP pc Source: National Bank of Ethiopia. Source: World Bank. Notes: See footnotes in table on the next page. 34 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. helped contain domestic and FX demand. Gradual fuel price ad- justments and government imports of essential goods mitigated Outlook inflationary pressures, bringing inflation down from 19 percent yoy in July to 15 percent in February. Real interest rates turned Near-term growth will be constrained by tight monetary policy, se- positive despite the monetary policy rate remaining unchanged curity challenges, and exchange rate uncertainty. However, GDP at 15 percent. The balance of payments and current account growth is projected to rebound in the medium term, supported by improved in H1 FY25 due to stronger exports, remittances, In- debt relief and reforms that enhance investor confidence, produc- ternational Financial Institutions (IFI) disbursements, and modest tivity, and exports. Inflation will remain high as fuel and fertilizer foreign direct investment (FDI) growth. Service exports remained subsidies are phased out but is expected to ease to single digits flat, primarily reflecting stable Ethiopian Airlines revenue, while with improved supply capacity and reduced localized conflicts. De- electricity exports tripled, supported by growing data-center and spite higher export revenues, pent-up import demand will widen crypto-mining demand. the current account deficit to over 3 percent of GDP in FY25 be- fore stabilizing at 2 percent as external competitiveness strength- To ease reform impacts, a supplementary budget in November ens. The overall impact of recent tariff measures on the current ac- introduced spending measures worth 1.5 percent of GDP, includ- count is likely to be neutral, with weaker demand for Ethiopian ex- ing a 20 percent increase in safety net benefits, overdue increase ports offset by lower import prices (especially fuel). Relatively high- in public sector salaries, and temporary fuel and fertilizer subsi- er US tariffs on Ethiopia’s major export competitors could help im- dies. Tax revenues surged by 81 percent yoy in H1 FY25, driven prove the competitiveness of Ethiopian coffee, textile, and leather by VAT reforms that eliminated exemptions and standardized the exports in the US and revive supplier relationships previously af- tax base across federal and regional jurisdictions. Trade valuation fected by Ethiopia’s suspension from the Africa Growth Opportu- adjustments from the exchange rate reform also boosted rev- nities Act (AGOA).Further tax reforms (if implemented effectively) enues. Additionally, a four-year electricity tariff adjustment was and IFI disbursements will help reverse declining real public spend- launched to improve cost recovery, attract private investment, ing. Poverty is expected to decline gradually, reaching 35 percent and expand energy access. by 2027, but significant investment is needed to improve human capital, enhance resilience, and boost agricultural production. Household economic sentiment remained negative in 2024 due to past economic shocks. While inflation did not spike post-FX The outlook is predicated on reforms to sustain hard won ex- reform as initially feared, persistent inflation has eroded real change rate and macro stability and deeper structural reforms to incomes, pushing poverty to an estimated 37 percent by 2025. increase financial intermediation, ease constraints to private sector The government’s reform agenda aims to reverse this trend investment, exports and trading and tax reforms to ensure fair and by fostering private-sector employment, integrating smallholder predictable revenue mobilization. Key risks include weaker forex farmers into markets, and strengthening safety nets to protect inflows, unforeseen fiscal burdens, reform delays, and social un- vulnerable populations. rest, particularly in fragile rural areas. Recent history and projections 2021/22 2022/23 2023/24e 2024/25f 2025/26f 2026/27f Real GDP growth, at constant market prices 6.4 7.2 8.1 6.4 6.5 7.2 Private consumption 4.5 6.1 7.1 5.2 6.1 6.7 Government consumption 1.5 -16.0 -5.8 31.3 5.8 0.8 Gross fixed capital investment 11.0 11.2 13.8 5.1 8.2 9.5 Exports, goods and services 11.7 -0.8 4.5 11.2 2.4 3.6 Imports, goods and services 10.8 -4.1 13.0 9.9 8.1 8.1 Real GDP growth, at constant factor prices 6.4 7.2 8.1 6.4 6.5 7.2 Agriculture 6.0 6.3 7.0 6.2 5.9 5.8 Industry 4.8 6.9 9.2 5.2 7.1 7.3 Services 7.9 8.0 8.3 7.5 6.7 8.2 Employment rate (% of working-age population, 15 years+) 77.5 77.6 77.8 78.0 78.4 78.9 Inflation (consumer price index) 33.7 32.6 26.7 20.7 16.9 10.6 Current account balance (% of GDP) -4.0 -2.8 -2.8 -3.2 -3.2 -2.8 Fiscal balance (% of GDP) -4.2 -2.7 -2.0 -1.7 -2.0 -1.9 Revenues (% of GDP) 8.2 7.9 7.5 9.8 10.3 11.3 Debt (% of GDP) 30.8 25.3 22.6 28.4 29.5 30.3 Primary balance (% of GDP) -3.6 -2.1 -1.5 -1.1 -0.9 -0.5 1,2 International poverty rate ($2.15 in 2017 PPP) 35.7 36.6 37.3 37.3 37.0 35.4 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 73.1 70.8 69.3 67.9 66.4 64.8 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 95.0 93.1 91.3 89.6 87.8 86.1 GHG emissions growth (mtCO2e) 1.6 3.8 3.7 3.3 3.1 2.9 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. Growth projections reflect limited available information, and are subject to revision as better data becomes available. 1/ Calculations based on 2021-HCES. Actual data: 2021. Nowcast: 2022-2024. Forecasts are from 2025 to 2027. 2/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 35 This outlook reflects information available as of April 10, 2025. 1 2 GABON Population Poverty million millions living on less than $6.85/day 2.5 0.7 3 4 Life expectancy at birth School enrollment Growth accelerated to an estimated 2.9 percent in 2024, years primary (% gross) supported by oil, mining, wood industries, and public works. Higher growth is needed to reduce poverty. Meanwhile, ex- 65.7 99.9 5 6 pansionary fiscal policies are adding to debt sustainability GDP GDP per capita risks. The projected decline in oil prices will aggravate fiscal current US$, billion current US$ challenges. A return to constitutional order, strong fiscal consolidation, and prioritized social and productive invest- 20.9 8238.4 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2017 (2017 PPPs). 3/ 2022. ments are key for growth and poverty reduction. 4/ 2021. 5/ 2024. 6/ 2024. the need for major adjustments. These developments reduced the Key conditions and challenges country's regional borrowing capacity and increased debt pressures, constraining the fiscal space needed to meet rising social demands Gabon’s political transition crossed key milestones with a new Con- during the transition. To alleviate liquidity pressures, Gabon conduct- stitution and Electoral Code approved, and presidential elections in ed a two-stage early repurchase of its June 2025 Eurobond, with the April 2025. An orderly return to constitutional order is vital for so- second stage involving a costly private placement in February. Ensur- cial cohesion and growth. Gabon’s rich forests, minerals, and young ing transparent, sustainable public finances, and improving infra- population are key growth factors. To benefit from these, the Tran- structure and business climate is crucial for growth and job creation. sition’s Development Plan aims to develop agriculture, mining, fish- eries, support small and medium enterprises, and expand social housing and public services. Recent developments Yet, challenges remain significant. Unemployment is high at 20 per- GDP grew by an estimated 2.9 percent in 2024. Oil output grew cent and poverty affects a third of the population. While most poor by 1.9 percent amid lower OPEC+ restrictions and exploitation of are urban, rural poverty is compounded by low access to basic ser- new oilfields, while manganese production recovered from railway vices. Major infrastructural, institutional, and human capital gaps re- disruptions in 2023, and the wood industry was bolstered by sus- main, and the country has recently been facing frequent power cuts. tained Chinese and European demand. Large public works ben- efited construction and services. While higher public spending in Despite initiatives to strengthen transparency, scant information 2024 boosted imports, the current account surplus remained high on financing sources of large investments raise concerns about at 30.7 percent of GDP, thanks to robust commodity exports. a deteriorating fiscal and financial position. Fitch’s downgrade of Gabon in January 2025 and worsening debt sustainability risks re- Tax collection measures, including digitalization of tax filing and ported by the IMF debt sustainability analysis in mid-2024 suggest of the Northern-border customs office, were countered by a FIGURE 1 / Fiscal position and public debt FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent of GDP Percent of GDP Poverty rate (%) Real GDP per capita (constant million LCU) 4 90 40 2.60 0 35 70 2.55 30 -4 50 2.50 25 -8 30 20 2.45 -12 15 2.40 -16 10 10 2.35 -20 -10 5 2020 2021 2022 2023 2024e 2025p 0 2.30 Public debt (rhs) 2017 2019 2021 2023 2025 2027 Fiscal balance (lhs) International poverty rate Lower middle-income pov. rate Non-oil primary balance (lhs, non-oil GDP) Upper middle-income pov. rate Real GDP pc Sources: National authorities and World Bank staff calculations. Source: World Bank. Notes: See footnotes in table on the next page. 36 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. 3.1-percent oil price drop in 2024 which slashed oil revenues by 4 timber, palm oil and rubber industries compensate for a decline percent. Meanwhile, public spending increased by 24 percent due in oil. The recent start of iron ore production at Belinga, one of to large public works, reintroduction of fuel subsidies for indus- Africa’s largest deposits, should boost the mining sector. Higher tries, higher transfers, and constitutional referendum costs. The mineral, wood, rubber and oil palm exports, coupled with lower im- overall balance dipped from a 1.8 percent surplus in 2023 to an ports due to more constrained public spending, should maintain estimated -3.7 percent deficit in 2024. The non-oil primary bal- high current account surpluses. ance plummeted to an estimated -15.9 percent of non-oil GDP, whereas the public debt stood above the Central African Econom- Domestic revenue mobilization efforts would gradually expand ic and Monetary Community convergence criteria at 72.5 percent tax collection, but declining oil production and prices would of GDP, due to higher spending and accumulation of arrears. shrink revenues, compromising public investments in view of rigid recurrent expenditures. Moreover, elections could raise Inflation receded over 2024, with monthly inflation at 0.9 percent spending pressures in 2025. The fiscal deficit is projected at in December, reflecting stronger price controls, stabilizing global around 4.9 percent of GDP in 2025-27, keeping debt sustainabil- prices, and a restrictive monetary policy, as Bank of Central African ity risks high. A tight monetary policy by BEAC should keep infla- States (BEAC) kept the policy rate at five percent from March 2023 tion under control. The limited investment outlook would impact to March 2025, when it was lowered to 4.5 percent. Despite tight the services sector, employing two-thirds of the workforce, push- monetary policy and high bank exposure to state borrowing, credit ing poverty up by 3.2 percentage points to 37.8 percent (about to firms increased by an estimated 8.5 percent in 2024. Non-per- 980,000 people) in 2025. forming loans remained low. The changing global trade, investment, financial and commodity Recent growth remains insufficient to reduce poverty. Historically, markets context dims Gabon’s growth, trade, and fiscal outlook. poverty had been rising, but moderate growth helped stabilize Lower oil prices due to reduced demand from advanced poverty between 2023 and 2024. In 2024, about 34.6 percent of economies and increased supply will reduce oil revenues, further Gabon's population was living on less than $6.85 per day (in 2017 raising fiscal deficits. Tighter global financial conditions could slow PPP). However, due to population growth, the absolute number down investment in the extractive sectors and add to the current of people living in poverty increased by 20,000, to nearly 880,000 liquidity challenges. Gabon’s borrowing capacity is limited due to people in 2024. banks’ sovereign exposure, exacerbated by the recent Central African Banking Commission risk weight increase. Challenges in mobilizing financing could result in further accumulation of arrears Outlook or cuts in capital expenditures, affecting growth. To address de- velopment needs while securing a viable fiscal path, Gabon needs Growth is projected at around 2.4 percent in 2025-27, as uncertain- strong fiscal consolidation, with efficient, prioritized spending on ty in the post-electoral period declines and expanding manganese, human and natural capital, and targeted poverty alleviation. Recent history and projections 2022 2023 2024 2025f 2026f 2027f Real GDP growth, at constant market prices 3.0 2.4 2.9 2.1 2.2 3.0 Private consumption -0.3 2.1 2.6 -0.8 2.1 4.4 Government consumption 3.8 1.5 4.5 4.8 0.3 -0.4 Gross fixed capital investment 8.4 6.2 6.9 -4.3 -2.0 -1.9 Exports, goods and services 12.9 -2.5 4.0 0.0 -1.5 -0.5 Imports, goods and services 12.5 1.3 6.8 -5.1 -4.1 -3.5 Real GDP growth, at constant factor prices 3.5 2.5 2.7 2.1 2.2 3.0 Agriculture 9.7 -2.0 -1.3 7.3 6.6 5.0 Industry 3.4 3.8 0.3 1.4 3.9 2.5 Services 2.4 2.6 5.0 1.5 0.4 2.9 Inflation (consumer price index) 4.3 3.7 2.4 2.3 2.2 2.3 Current account balance (% of GDP) 34.4 28.5 30.7 17.9 22.4 24.0 Net foreign direct investment inflow (% of GDP) 1.6 1.8 1.6 1.6 1.2 1.0 Fiscal balance (% of GDP) -0.8 1.8 -3.7 -5.4 -4.7 -4.6 Revenues (% of GDP) 21.1 24.6 23.7 24.3 23.0 22.4 Debt (% of GDP) 57.0 70.6 72.5 80.2 82.6 86.1 Primary balance (% of GDP) 1.8 4.8 -0.6 -1.8 -0.9 -0.7 1,2 International poverty rate ($2.15 in 2017 PPP) 2.0 2.6 2.6 3.1 2.9 3.1 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 7.9 9.6 9.7 10.9 10.4 10.2 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 31.8 34.5 34.6 37.8 36.3 35.8 GHG emissions growth (mtCO2e) -1.8 -2.5 -1.0 -0.4 1.2 1.7 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2017-EGEP. Actual data: 2017. Nowcast: 2018-2024. Forecasts are from 2025 to 2027. 2/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 37 This outlook reflects information available as of April 10, 2025. 1 2 THE GAMBIA Population Poverty million millions living on less than $2.15/day 2.8 0.4 3 4 Life expectancy at birth School enrollment Growth accelerated to an estimated 5.7 percent in 2024, years primary (% gross) mainly driven by agriculture and services. Inflation de- creased to 11.7 percent. Extreme poverty incidence declined 62.9 93.7 5 6 to 16.7 percent in 2024. Growth is projected to expand by GDP GDP per capita 5.6 percent in 2025, supported by all sectors. Debt vulnera- current US$, billion current US$ bilities, balance of payment pressures, and global geopoliti- cal tensions and spillovers of the global trade environment 2.5 908.5 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2020 (2017 PPPs). 3/ 2022. cloud the outlook. 4/ 2023. 5/ 2024. 6/ 2024. jobs, and exposure to shocks, including climate events, meant that Key conditions and challenges in 2020, an estimated 17.2 percent of the population lived in ex- treme poverty (measured at the international poverty line of $2.15 The Gambia has gained economic growth momentum since its de- per day PPP 2017). A National Development Plan 2023–2027 is be- mocratic transition in 2017, with economic activity expanding by ing implemented to address these challenges, but limited capacity 5.0 percent on annual average over 2017–2024, higher than the 2.8 and fiscal space restrict progress. percent annual average over 1990–2016. The Gambia, however, still faces structural constraints that hinder Recent developments the transformation of its economy. These include persistent gov- ernance and institutional challenges, low economic diversification, Growth accelerated to an estimated 5.7 percent (3.4 percent poor infrastructure supply, limited human capital development per capita) in 2024, driven mainly by agriculture and services and weak business environment, all of which hampered productiv- which benefited from fertilizer support, high-yielding seeds and ity growth and private sector development. increased tourism. Industry slowed following the completion of major infrastructure projects related to the Organization of These constraints add to downside risks from high dependence on Islamic Cooperation (OIC) Summit. Robust private investment imports, putting persistent pressure on the balance of payments, and consumption, supported by remittances, and public con- and heightened fiscal vulnerabilities, including high public debt, sumption driven by the hosting of the OIC Summit, boosted low domestic revenue collection and weak performance of State- growth on the demand side. Inflation moderated to 11.7 per- Owned Enterprises (SOEs), alongside exacerbated climate shocks. cent in 2024 as energy and food prices slowed. Higher labor incomes—driven by a successful harvest, public construction Profound deficits in human capital endowments, weak attachment works, and a recovery of tourism—and soaring remittances to formal labor markets, the high prevalence of low-productivity supported household consumption and contributed to better FIGURE 1 / Real GDP growth and demand side contribution to real FIGURE 2 / Actual and projected poverty rates and real GDP per GDP growth capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 30 100 35000 90 30000 20 80 70 25000 10 60 20000 50 0 40 15000 -10 30 10000 20 5000 -20 10 2000 2003 2006 2009 2012 2015 2018 2021 2024 2027 0 0 Gov. cons. Exports GFCF 2010 2012 2014 2016 2018 2020 2022 2024 2026 Inventories Private cons. Imports International poverty rate Lower middle-income pov. rate Statistical disc. GDP Upper middle-income pov. rate Real GDP pc Sources: The Gambian authorities and World Bank estimates. Source: World Bank. Notes: See footnotes in table on the next page. 38 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. household living standards. In combination with lower inflation, private and public investment, and private consumption supported extreme poverty is estimated to have declined to 16.7 percent by robust remittances, albeit dependent on the pace of growth in in 2024, from 17.3 percent in 2023. advanced economies. Inflation is projected to return to single dig- its in 2025, and average 6.8 percent over 2025–2027, reflecting do- The fiscal deficit decreased to an estimated 3.5 percent of GDP mestic monetary tightening and easing global commodity prices. in 2024, as increased domestic revenue and decreased capital spending offset higher interest payments and current transfers. Rising economic activity, higher remittances, and declining inflation Public debt continued to decline to an estimated 70.6 percent are expected to improve household welfare. Consequently, pover- of GDP in 2024. Nevertheless, The Gambia remains at high risk ty is projected to continue declining, reaching 15.9 percent in of debt distress. 2025 and falling to 14.4 percent by 2027, lifting around 35,000 Gambians out of extreme poverty (compared to 2024). Nonethe- The current account deficit (CAD) increased to an estimated 5.7 less, structural impediments to poverty reduction remain. Invest- percent of GDP in 2024, reflecting large OIC event-related imports. ments in better access to health and education facilities and The Central Bank has maintained a tight monetary stance, keeping stronger private sector-led growth with higher productivity jobs its policy rate at 17 percent in November 2024, unchanged since will be critical for future inclusive growth. August 2023. International reserves, while remaining at comfort- able levels, are estimated to have declined to 4.7 months of im- The CAD is set to deteriorate to 5.9 percent of GDP in 2025 due ports in 2024, from 4.9 months in 2023, as the currency depreci- to lower service exports and remittances, while narrowing in the ated by 7.2 percent in nominal terms over the same period. The medium term assuming an improved global trade environment. banking industry remains stable and financially sound, despite ele- The fiscal deficit is projected to narrow to 1.2 percent of GDP vated non-performing loans. over 2025–2027, supported by spending control efforts, including shifting to program-based budgeting and rationalization of subsi- dized agencies, alongside domestic revenue mobilization reforms, Outlook including tax policy enhancement with a review of the investment code to reduce tax expenditures, enhanced tax compliance, and Growth is projected to average 5.5 percent (3.3 percent per capita) digitization of tax administration. This will allow public debt to de- in 2025–2027, driven by all sectors, despite a deceleration in ser- crease from 70.6 percent of GDP in 2024 to below 60 percent on av- vices as tourism is expected to slow down due to global economic erage in 2025–27. Nevertheless, The Gambia is expected to remain uncertainty, alongside capital spending-based fiscal consolidation at high risk of debt distress. The end of the debt-service deferrals in 2026. On the demand side, growth is expected to be driven by in 2024 represents a fiscal risk in the short to medium term. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 5.5 4.8 5.7 5.6 5.3 5.5 Private consumption 2.6 -4.7 4.4 4.2 4.1 4.1 Government consumption -2.6 5.8 7.1 4.2 5.8 3.7 Gross fixed capital investment 3.6 7.6 7.1 6.8 5.4 5.2 Exports, goods and services 8.8 28.0 18.4 17.0 17.0 17.4 Imports, goods and services -1.8 4.8 7.2 6.0 6.3 5.7 Real GDP growth, at constant factor prices 5.5 4.8 5.7 5.6 5.3 5.5 Agriculture 7.5 2.4 4.0 4.2 5.5 5.2 Industry 3.8 10.1 2.5 5.8 5.0 7.2 Services 5.2 4.0 7.7 6.2 5.2 5.0 Employment rate (% of working-age population, 15 years+) 58.5 58.5 58.5 58.5 58.5 56.6 Inflation (consumer price index) 11.5 16.9 11.7 9.0 6.5 5.0 Current account balance (% of GDP) -4.2 -5.5 -5.7 -5.9 -3.6 -2.1 Fiscal balance (% of GDP) -5.8 -3.8 -3.5 -1.4 -1.4 -0.8 Revenues (% of GDP) 19.2 20.7 21.1 23.0 22.8 22.7 Debt (% of GDP) 84.0 76.9 70.6 64.8 59.6 55.9 Primary balance (% of GDP) -3.6 -1.7 -0.5 1.6 1.3 1.4 1,2 International poverty rate ($2.15 in 2017 PPP) 16.5 17.3 16.7 15.9 15.2 14.4 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 46.4 47.6 46.5 45.3 44.1 42.9 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 82.2 83.3 82.2 81.0 80.0 79.2 GHG emissions growth (mtCO2e) 1.5 2.0 2.1 2.3 2.2 2.5 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2020-IHS. Actual data: 2020. Nowcast: 2021-2024. Forecasts are from 2025 to 2027. 2/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 39 This outlook reflects information available as of April 10, 2025. 1 2 GHANA Population Poverty million millions living on less than $3.65/day 34.4 14.3 3 4 Life expectancy at birth School enrollment Achieving stability will require significant efforts to enhance years primary (% gross) fiscal discipline, contain expenditures, expand revenue base, and complete debt restructuring. A tight monetary policy is 63.9 96.5 5 6 also needed to reduce pressure on the Cedi, tackle stubborn GDP GDP per capita inflation, and accumulate reserves. Mitigating adverse im- current US$, billion current US$ pacts of necessary reforms on the poorest will be important. 82.8 2406.1 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2016 (2017 PPPs). 3/ 2022. 4/ 2022. 5/ 2024. 6/ 2024. improve the business environment and export competitiveness, Key conditions and challenges strengthen public sector management, and accelerate a transition to digital and climate change adaptation. Global headwinds will Ghana has nearly completed a comprehensive debt restructuring. have a bearing on Ghana’s economy, which heavily depends on However, 2024, an election year, saw a reversal of fiscal gains with un- global demand for commodities (oil, cocoa and gold) and benign budgeted expenditures, accumulation of arrears, and lower revenue financial conditions. collection. Fiscal sustainability depends on critical fiscal discipline re- forms, boosting domestic revenue, and addressing state-owned en- terprise liabilities in the energy and cocoa sectors. These efforts Recent developments are supported by an IMF Extended Credit Facility program, and the World Bank’s programmatic Development Policy Operations. GDP growth accelerated to 5.7 percent in 2024, driven by recovery in industry (7.1 percent), led by mining and construction. Services, Ghana had significantly reduced poverty before COVID-19, but led by information and communications, finance and insurance, has experienced subsequent reversals due to high inflation and expanded by 6.1 percent. Agriculture grew by 2.8 percent, owing slowing economic growth. The rising poverty trend halted in 2024 to improvements in livestock and crop production, despite a con- despite ongoing inflationary pressures, especially food prices. traction in cocoa output. On the expenditure side, growth was bol- However, stubborn inflation still affects households’ purchasing stered by public and private consumption expansion and a re- power, while slower growth and economic stabilization may jeop- bound in investment spending. ardize continued poverty reduction if adverse impacts on the poorest are not mitigated. Monetary policy failed to tame persistent inflation, which acceler- ated in the second half of 2024 to 23.8 percent due to higher food Faster growth will require a sustained record of macroeconomic prices. Despite an appreciation of the Cedi in the last quarter of stability, along with reforms to address energy sector liabilities, 2024 due to central bank interventions, the currency depreciated FIGURE 1 / Fiscal targets and outturn FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent of GDP Poverty rate (%) Real GDP per capita (constant LCU) 25 23.3 90 7000 21.5 21.5 80 6000 20 18.5 17.4 15.8 70 15.2 15.6 5000 15 60 50 4000 10 7.7 40 3000 5.7 4.2 30 5 3.3 2000 20 10 1000 0 Budget Outturn Budget Outturn 0 0 2023 2024 2012 2014 2016 2018 2020 2022 2024 2026 International poverty rate Lower middle-income pov. rate Total revenue and grants Total expenditure Fiscal deficit Upper middle-income pov. rate Real GDP pc Sources: Ministry of Finance and World Bank. Source: World Bank. Notes: See footnotes in table on the next page. 40 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. by 19.0 percent against the US dollar y-o-y given high foreign ex- in 2024, a half percentage point decrease from the previous year. change demand, and uncertainties surrounding bond restructuring At the international extreme poverty line (US$2.15/day, 2017 PPP), uncertainties and elections. poverty was 25.9 percent in 2024. The external sector achieved a current account surplus of 3.2 per- cent of GDP in 2024, driven by higher gold and crude oil exports Outlook and strong remittance inflows. Gross international reserves in- creased to US$6.4 billion (2.6 months of imports) from US$3.6 bil- Economic growth in 2025 is expected to moderate to 3.9 percent lion in 2023, owing to the over 3 billion worth of gold reserves ac- due to a larger fiscal adjustment, reduced momentum in the ex- cumulated under the Domestic Gold Purchase program. tractives sector, global shifts in trade policy, and elevated interest rates. Medium-term growth is anticipated to return to potential The fiscal outturn for 2024 deteriorated, with primary and overall when the impact of fiscal stabilization fades, non-extractive sector fiscal deficits exceeding targets at 3.7 percent and 7.7 percent of performance improves, and PECAN oil fields production com- GDP, respectively, due to accumulating arrears and unbudgeted mences. Inflation is expected to subside with renewed fiscal con- commitments (4.2 percent of GDP). Revenue and grants totaled solidation and containment of the public wage bill, slowly returning 15.6 percent of GDP (below the 17.1 percent target), while expen- to its target by 2027. ditures (commitment basis) rose to 23.3 percent of GDP (versus a 20.7 percent target). Nevertheless, the public debt to GDP ratio The overall fiscal deficit for 2025 is projected at 2.7 percent of GDP, declined to 70.5 percent due to the Eurobond haircut and strong with a primary surplus target of 1.5 percent, contingent on the gov- GDP growth. ernment's ability to fully reverse the 2024 fiscal slippages and im- provements in tax collection. Over the medium term, the govern- The banking sector remained stable in 2024, with assets growing ment aims to broaden the tax base, improve tax compliance, and by 33.8 percent. The capital adequacy ratio increased to 14 per- enhance expenditure controls. cent and 11.3 percent, with and without regulatory reliefs, re- spectively. However, some banks had significant capital shortfalls Poverty is projected to increase again, reaching 51.4 percent (LMIC at the end of 2024, and the non-performing loans ratio remained poverty line) and 27.0 percent (extreme poverty line) by 2027. high at 21.8 percent. While economic stabilization is a pre-condition for continued poverty reduction, compensating mechanisms and continued Improved growth in 2024, especially in services, and to a lesser ex- strengthening of social programs, such as LEAP (Livelihood Em- tent in agriculture, benefited poorer households and paused the powerment Against Poverty), will ensure the poorest are protected increase in poverty incidence. Poverty at the lower-middle-income from any adverse consequences of fiscal measures, especially en- poverty line (US$3.65/day, 2017 PPP) is estimated at 49.0 percent ergy tariff increases. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 3.8 3.1 5.7 3.9 4.6 4.8 Private consumption 5.6 10.1 4.2 5.6 4.0 3.9 Government consumption 0.0 0.5 8.0 -5.9 10.9 9.5 Gross fixed capital investment 0.7 -29.2 13.9 3.5 3.9 5.2 Exports, goods and services 0.2 5.1 9.1 3.8 8.3 8.5 Imports, goods and services 1.4 -1.2 9.5 5.5 7.8 7.4 Real GDP growth, at constant factor prices 3.8 3.1 5.7 3.9 4.6 4.8 Agriculture 4.2 5.9 2.8 3.4 4.3 3.6 Industry 0.6 -1.7 7.1 2.4 3.2 4.3 Services 6.3 5.6 6.1 5.3 5.8 5.8 Employment rate (% of working-age population, 15 years+) 66.5 66.4 66.7 66.7 66.7 66.7 Inflation (consumer price index) 31.9 39.2 22.9 17.2 9.4 8.0 Current account balance (% of GDP) -2.3 -2.3 3.2 1.6 1.3 0.8 Net foreign direct investment inflow (% of GDP) 2.0 1.6 2.1 2.6 2.8 2.9 Fiscal balance (% of GDP) -11.8 -3.3 -7.7 -2.7 -2.0 -1.7 Revenues (% of GDP) 15.7 15.2 15.6 16.1 16.8 16.8 1 Debt (% of GDP) 92.7 78.9 70.5 66.4 62.7 59.9 Primary balance (% of GDP) -4.4 -0.3 -3.7 1.5 1.5 1.5 2,3 International poverty rate ($2.15 in 2017 PPP) 25.5 26.4 25.9 26.6 26.8 27.0 2,3 Lower middle-income poverty rate ($3.65 in 2017 PPP) 48.2 49.3 49.0 49.8 51.0 51.4 2,3 Upper middle-income poverty rate ($6.85 in 2017 PPP) 77.9 78.5 78.6 79.0 79.8 80.3 GHG emissions growth (mtCO2e) 10.1 8.5 6.0 3.2 3.7 4.0 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Starting from 2022, public debt numbers include, in addition to central government debt, explicitly guaranteed (and certain implicitly guaranteed) SOE debt, cocobills issued by Co- cobod, and reconciled domestic arrears to suppliers. 2/ Calculations based on 2016-GLSS-VII. Actual data: 2016. Nowcast: 2017-2024. Forecasts are from 2025 to 2027. 3/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 41 This outlook reflects information available as of April 10, 2025. 1 2 GUINEA Population Poverty million millions living on less than $3.65/day 14.8 5.9 3 4 Life expectancy at birth School enrollment In 2024, growth reached 5.7 percent, driven primarily by in- years primary (% gross) vestment. The fiscal deficit increased to 3.0 percent of GDP, and inflation peaked at 9.3 percent. Despite a 3.1 percent 59.0 98.0 5 6 rise in GDP per capita, poverty increased due to higher infla- GDP GDP per capita tion and insufficient non-mining sector job creation. In current US$, billion current US$ 2025-27, growth is projected to accelerate to 8.9 percent but uncertainties related to global trade and commodity 25.3 1715.9 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2018 (2017 PPPs). 3/ 2022. prices represent significant risks. 4/ 2021. 5/ 2024. 6/ 2024. underdeveloped financial sector, weak institutional capacity, low Key conditions and challenges human capital levels, and significant gender gaps in education, op- portunities, and earnings. Reforms are also needed to reduce in- Growth was robust during 2019-24, averaging 5.2 percent (2.5 per- equitable subsidies and enhance public spending efficiency and cent per capita), driven mainly by the mining industry but also by revenue mobilization, particularly from mining, to create space for productivity gains in agriculture. However, weak mining linkages public investment that addresses structural inequalities. to non-mining sectors, headwinds from Dutch-Disease dynamics and external shocks limited job creation and poverty reduction. In- deed, over the same period, Guinea’s international poverty rate Recent developments (<$3.65-a-day in 2017 PPP) increased by 7.0 percentage points pushing 1.8 million additional people into poverty. Driven primarily by investment, the economy expanded by 5.7 per- cent in 2024 (3.1 percent per capita) from 5.5 percent in 2023, de- Guinea has abundant natural resources, a growing population, and spite a fuel depot explosion in December 2023. The mining sector a privileged geographic location. The Simandou iron ore project, grew at 7.7 percent, fueled by increased investment and new pro- with exports expected by 2026, has the potential to transform duction, while the non-mining sector grew by an estimated 5.1 per- Guinea's economy and create jobs if appropriate reforms are im- cent. Despite increased revenues, higher capital spending and in- plemented. However, this transformation is challenged as the on- terest payments increased the fiscal deficit to an estimated 3.0 per- going mining boom and the associated appreciation of the real ef- cent of GDP in 2024 from 1.8 percent in 2023, and debt increased fective exchange rate hamper the competitiveness of non-mining to an estimated 42.1 percent of GDP from 41.4 percent in 2023. sectors and diversification. Annual inflation rose to 8.1 percent in 2024 from 7.8 percent in To maximize the impact of growth on job creation and poverty 2023 due to the temporary effects of the December 2023 fuel de- reduction, Guinea must address large infrastructure gaps, an pot explosion, resulting in a 0.2 percentage point rise in poverty. FIGURE 1 / Public debt, fiscal deficit, and inflation FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent of GDP Percent Poverty rate (%) Real GDP per capita (constant million LCU) 45 14 100 8 40 90 7 12 35 80 6 10 70 30 60 5 25 8 50 4 20 6 40 3 15 30 4 2 10 20 5 2 10 1 0 0 0 0 2021 2022 2023e 2024e 2025f 2026f 2027f 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 International poverty rate Lower middle-income pov. rate Debt (lhs) Fiscal deficit (rhs) Inflation (CPI, rhs) Upper middle-income pov. rate Real GDP pc Source: World Bank. Source: World Bank. Notes: See footnotes in table on the next page. Notes: The inflation data in Figure 1 and the table on the next page refer to Conakry, Guinea's capital. Up until June 2023, Guinea's CPI was based solely on Conakry prices. 42 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. However, as year-on-year inflation gradually declined from 9.3 The fiscal deficit is expected to decrease to 2.4 percent percent in January 2024 to 6.1 percent in December 2024, the of GDP in 2025 and then gradually decline, averaging 1.8 central bank lowered the key policy rate and reserve requirement percent in 2026-27, in line with continued prudent fiscal ratio by 25 basis points to 10.75 percent and 12.75 percent, re- policies and additional revenues. Tax revenues are pro- spectively in December 2024. jected to increase gradually to 13.8 percent of GDP by 2027 from 13.0 percent in 2024, supported by new revenue The current account deficit (CAD) is estimated to widen to 17.7 from Simandou and tax administration reforms. Government percent of GDP in 2024 due to a significant decline in the trade spending is expected to exceed recent levels (except 2024), surplus, linked to FDI-related imports. The sharp increase in FDI- averaging 17.3 percent of GDP in 2025-27 to support infra- related imports and a higher fuel import bill contributed to re- structure investments, while electricity subsidies are expect- ducing gross reserves to only 1.1 months of the following year's ed to gradually decline, driven by tariff adjustments and util- imports in December 2024. ity reforms. The debt-to-GDP ratio is projected to decline to 37.6 percent by 2027. Outlook The CAD is projected to decrease to 2.7 percent of GDP by 2027 as import growth slows and Simandou exports begin, supporting Despite global uncertainties, growth is expected to reach 6.5 per- an increase in reserves to cover 1.8 months of next year’s im- cent in 2025 (3.9 percent per capita) and average 10.0 percent in ports by end-2026. 2026-27, driven mainly by a 19.4 percent average annual growth in the mining sector, largely due to the start of a new iron ore oper- The full economic impacts of recent global trade policy un- ation in 2026. Non-mining sector growth is expected to accelerate certainty are dynamic and difficult to gauge. However, with to 5.4 percent in 2025-27 bolstered by strong internal demand and gold representing 45 percent of Guinea’s exports, and oil higher public investment. and agriculture representing about a third of total imports, the combined effect of commodity price changes, especially Inflation is projected to decline to an average of 7.0 percent in gold prices increases will be more significant than the direct 2025-27, aided by lower transport and food inflation and prudent trade impacts in 2025. monetary policy. The poverty rate is projected to fall by an average of 3.5 percentage points per year over the same period. However, Downside risks include uncertainties in the timing of the political this significant projected poverty reduction is linked to the strong transition, which could lead to social instability and slow reform projected growth of mining, a sector that offers limited employ- implementation. Uncertainties related to global trade, demand ment opportunities for the poor. As such, without ensuring that and commodity prices represent additional risks.Furthermore, ad- the mining boom translates to high growth of agriculture and other verse weather conditions could affect infrastructure and slow pro- non-mining sectors, the expected substantial poverty reduction duction. On the upside, a more rapid implementation of reforms may not materialize. could accelerate growth. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 4.0 5.5 5.7 6.5 8.8 11.3 Private consumption 3.9 4.0 4.3 4.7 4.8 5.0 Government consumption -5.7 0.8 3.4 6.8 4.4 4.5 Gross fixed capital investment 1.9 63.6 45.6 30.0 -19.1 4.3 Exports, goods and services -5.3 8.8 7.6 8.4 12.1 18.4 Imports, goods and services -13.3 25.0 23.0 19.0 -7.0 8.5 Real GDP growth, at constant factor prices 4.3 5.5 5.7 6.5 8.8 11.3 Agriculture 6.0 5.7 5.6 6.1 6.3 6.7 Industry 5.7 7.8 7.1 8.7 14.7 20.4 Services 2.5 3.7 4.5 4.7 4.7 4.8 Inflation (consumer price index) 10.5 7.8 8.1 7.0 7.0 6.9 Current account balance (% of GDP) -0.6 -11.3 -17.7 -14.3 -4.9 -2.7 Net foreign direct investment inflow (% of GDP) 12.6 16.2 16.7 15.8 7.9 6.0 Fiscal balance (% of GDP) -0.9 -1.8 -3.0 -2.4 -2.0 -1.6 Revenues (% of GDP) 13.7 14.5 15.0 15.1 15.2 15.5 Debt (% of GDP) 40.1 41.4 42.1 41.3 39.5 37.6 Primary balance (% of GDP) 0.0 -1.3 -1.8 -1.3 -1.0 -0.5 1,2 International poverty rate ($2.15 in 2017 PPP) 14.7 15.1 15.3 13.7 11.7 9.5 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 50.5 51.7 51.9 49.4 46.0 41.3 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 89.1 89.7 89.5 88.7 87.4 85.3 GHG emissions growth (mtCO2e) 3.0 3.1 3.1 3.2 3.7 4.1 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2018-EHCVM. Actual data: 2018. Nowcast: 2019-2024. Forecasts are from 2025 to 2027. 2/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 43 This outlook reflects information available as of April 10, 2025. 1 2 GUINEA-BISSAU Population Poverty million millions living on less than $2.15/day 2.2 0.5 3 4 Life expectancy at birth School enrollment Despite a disappointing cashew campaign, stronger services years primary (% gross) activity and higher private demand supported growth of 4.6 percent in 2024. Lower-than-expected revenue collection and 59.9 113.3 5 6 grants accentuated fiscal pressures, increasing public debt. GDP GDP per capita The weak cashew campaign in 2024 and high food prices led to current US$, billion current US$ a marginal increase of poverty to 27.8 percent. Risks to the out- look include the upcoming elections, climate and external 2.2 1014.0 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2021 (2017 PPPs). 3/ 2022. shocks, including high global trade and growth uncertainty. 4/ 2010. 5/ 2024. 6/ 2024. earlier projections (5 percent) due to poorer-than-expected Key conditions and challenges cashew performance. Guinea-Bissau’s economy is heavily reliant on cashew production The service sector, especially hospitality and trade, and higher pro- and exports, making it highly vulnerable to external and climate duction of subsistence crops supported growth in 2024, while high- shocks. Cashew production is dispersed among smallholder farm- er farmgate prices boosted private consumption. Private invest- ers whose income supports overall economic activity. Poverty re- ment increased due to the construction sector, compensating for mains widespread—particularly in rural areas—and changes in lower cashew exports. While headline inflation averaged 3.8 per- household welfare are driven by agricultural incomes and food cent in 2024 (down from 7.2 percent in 2023), price pressures have prices. Political uncertainty remains a perennial challenge. picked up since June 2024 due to increasing domestic food prices. Extreme poverty incidence (measured at the international poverty Growth is mainly driven by private consumption and agriculture. line of US$2.15/day PPP 2017) is estimated at 27.8 percent in 2024, a The enabling environment for private sector-led growth is weak marginal increase from 27.5 percent in 2023 due to a weak cashew due to poor infrastructure, low levels of human capital, and lim- campaign and high prices for staple food items—including rice. ited public services. Spending on health, education and infra- structure have increased but are largely donor financed given The current account deficit (CAD) widened to 8.5 percent of GDP the limited fiscal space. in 2024 (from 8.3 in 2023) reflecting lower international cashew prices and a reduction in export volumes. Despite lower interna- tional food prices, import value increased moderately reflecting Recent developments higher domestic demand. Output expanded by 4.6 percent in 2024 (2.3 percent per Better spending controls contributed to improve the fiscal capita)—an increase from 2023 (4.4 percent) but lower than deficit to 7.3 percent of GDP in 2024 (8.2 in 2023). However, FIGURE 1 / Evolution of fiscal and debt indicators FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent Percent of GDP Poverty rate (%) Real GDP per capita (constant LCU) 0 85 100 600000 90 -2 80 500000 80 70 400000 -4 75 60 50 300000 -6 70 40 200000 30 -8 65 20 100000 10 -10 60 0 0 2021 2022 2023 2024e 2025p 2026p 2027p 2010 2012 2014 2016 2018 2020 2022 2024 2026 International poverty rate Lower middle-income pov. rate Public debt (rhs) Overall fiscal balance (lhs) Upper middle-income pov. rate Real GDP pc Sources: Ministry of Finance and World Bank. Source: World Bank. Notes: See footnotes in table on the next page. 44 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. this was higher than expected as tax collection fell significantly be- cashew prices on exports, supporting the narrowing of the current low target due to lower-than-expected revenue from cashew ex- account deficit to 6.5 percent of GDP in 2025 and 4.6 percent by ports, lower tax revenues on income and imports. The higher fis- 2027. Concessional loans and grants will remain the main financing cal deficit, lower budget support, and higher interest expenses con- sources for the CAD. tributed to significantly increase public debt to an estimated 82.3 percent of GDP at end-2024. Higher revenue collection and continued spending discipline could lower the fiscal deficit and public debt to 3.3 percent and 74.6 percent The West African Economic and Monetary Union (WAEMU) inflation of GDP, respectively, by 2027. The fiscal adjustment is highly depen- rate declined further in 2024 to 3.5 percent but remained above dent on effective implementation of revenue-enhancing reforms, the 1–3 percent WAEMU target band. Regional foreign reserves in- strengthened expenditure controls, and increased grant financing. creased from 3.5 months of imports in 2023 to 4.7 months in 2024, reflecting the resumption of international bond issuances, IMF, and The regional inflation rate is expected to align with the WAEMU tar- World Bank disbursements. The Central Bank of West African get band from 2025 onwards, while regional reserves are projected States kept its policy interest rates unchanged throughout 2024 to rise to 5.4 months of imports in 2025, supported by recovering at 3.5 percent for liquidity calls and 5.5 percent for the marginal exports, and lower Euro Area interest rates. lending facility. Higher cashew producer prices and lower food prices are expected to contribute to reducing poverty to 25.9 percent in 2025. Poverty Outlook reduction is anticipated to continue declining after 2025, with poverty reaching 24.6 percent in 2026 and 23. percent in 2027, Growth is projected to reach 5.1 percent in 2025 (2.8 percent per equivalent to approximately 40,000 people leaving extreme capita), reflecting a good cashew campaign and increased producer poverty since 2024. prices, boosting private demand and activity in the service sector, while lower commodity prices will support the ongoing momentum Downside risks to the outlook stem from the political instability in construction activity. Sustained activity in services – especially re- and uncertainty around the elections, fiscal slippages, the materi- lated to cashew trade – will keep growth at an average of 5.2 per- alization of contingent liabilities, and climate and terms of trade cent over the medium-term. shocks. Sustained implementation of recent trade policy shifts and accompanying weakening in global economic activity could trans- Lower oil and commodity import prices combined with increased late into lower exports and decreasing remittances inflows, which exports in volume will compensate for the negative impact of lower would dampen the outlook. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 5.6 4.4 4.6 5.1 5.2 5.2 Private consumption 9.1 5.1 5.9 6.4 6.0 6.0 Government consumption 0.6 -0.9 6.1 0.6 0.5 0.5 Gross fixed capital investment 2.7 6.6 13.9 1.1 1.5 1.9 Exports, goods and services -12.5 -3.0 -3.0 5.6 4.8 4.0 Imports, goods and services 10.6 -4.2 2.0 5.5 4.0 4.0 Real GDP growth, at constant factor prices 5.5 4.3 4.5 5.1 5.2 5.2 Agriculture 1.4 4.7 4.5 6.0 5.2 5.0 Industry 2.4 12.7 5.9 6.0 6.7 6.8 Services 9.8 1.4 4.1 4.0 4.6 4.7 Employment rate (% of working-age population, 15 years+) 54.1 54.2 54.2 54.2 54.1 54.1 Inflation (consumer price index) 7.9 7.2 3.8 3.0 2.8 2.5 Current account balance (% of GDP) -8.0 -8.3 -8.5 -6.5 -5.7 -4.6 Fiscal balance (% of GDP) -6.2 -8.2 -7.3 -4.8 -4.0 -3.3 Revenues (% of GDP) 14.3 13.1 13.6 15.1 15.3 15.5 Debt (% of GDP) 75.5 76.5 82.3 80.5 77.6 74.6 Primary balance (% of GDP) -4.9 -5.9 -4.0 -1.8 -1.3 -0.8 1,2 International poverty rate ($2.15 in 2017 PPP) 25.7 27.5 27.8 25.9 24.6 23.3 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 59.7 60.4 61.1 60.1 59.0 58.1 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 89.2 88.9 89.1 89.2 89.0 88.7 GHG emissions growth (mtCO2e) 0.9 1.8 1.4 1.1 1.0 1.6 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2021-EHCVM. Actual data: 2021. Nowcast: 2022-2024. Forecasts are from 2025 to 2027. 2/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 45 This outlook reflects information available as of April 10, 2025. 1 2 KENYA Population Poverty million millions living on less than $2.15/day 56.4 19.2 3 4 Life expectancy at birth School enrollment Despite improving macroeconomic indicators, Kenya’s years primary (% gross) economy has slowed: real GDP growth is estimated at 4.5 percent in 2024, down from 5.6 percent in 2023 with 62.1 78.8 5 6 poverty reducing slowly. A wide fiscal deficit and high levels GDP GDP per capita of debt remain Kenya’s main macroeconomic vulnerability, current US$, billion current US$ requiring urgent action. Medium-term priorities to create jobs and reduce poverty involve boosting productivity, 124.5 2206.1 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2021 (2017 PPPs). 3/ 2022. exports, and climate resilience. 4/ 2019. 5/ 2024. 6/ 2024. To accelerate sustained and inclusive growth that creates more Key conditions and challenges and better jobs, it is critical for Kenya to ensure that past public in- vestments, a key contributor to the high debt levels, yield a growth Kenya overcame a severe liquidity crunch in 2024: tighter monetary dividend, while removing distortions in the economy. This will help and fiscal commitments allowed the country to access internation- accelerate Kenya’s productivity growth, estimated to be stagnant. al markets to roll over a US$2 billion Eurobond payment. Subse- quently, economic conditions improved as the exchange rate sta- bilized and reserves increased. Coupled with global tailwinds, infla- Recent developments tion came down. However, Kenya struggled to deliver on its fiscal policy commitments. The 2024 Finance Bill resulted in widespread Kenya’s GDP is estimated to have grown by 4.5 percent in 2024. protests, slowing fiscal consolidation. In addition, growth is slow- The industry sector contracted by 0.2 percent in Q3-24, as con- ing, a consequence of high real interest rates, floods in April 2024, struction fell by 2.0 percent. Manufacturing, however, helped the and government crowding out the private sector through domestic sector avoid a deeper slump, easing slightly compared to its Q3-23 borrowing and pending bills of ~3 percent of GDP. rate (2.3 and 2.8 percent, respectively). Despite floods in April 2024, agriculture and services remain resilient. Favorable weather condi- Economic growth is not sufficiently inclusive, and its link to tions have kept crop production strong, while lower inflation sup- poverty reduction has weakened. While GDP per capita expand- ported private consumption (Figure 1). The international poverty ed by 43 percent during 2005-2022, the national poverty rate rate (US$2.15 a day) is expected to have dropped by half a percent- declined by only 7 percentage points over the same period to age point from 35.1 percent in 2023 to 34.6 percent in 2024. 40 percent. Climate shocks reduce agricultural productivity, while skilled workers have better jobs opportunities than less-skilled Tighter monetary policy helped tame inflation and limit capital out- ones. Moreover, rural and particularly arid areas continue to lag flows. Headline inflation stood at 3.5 percent in February 2025, in human capital development. down from 6.3 percent in February 2024 and below the Central FIGURE 1 / Real GDP growth and sectoral contributions to real FIGURE 2 / Actual and projected poverty rates and real private GDP growth consumption per capita Percent, percentage points Poverty rate (%) Real private consumption per capita (constant LCU) 12 100 180000 10 90 160000 80 140000 8 70 6 120000 60 100000 4 50 80000 2 40 60000 30 0 40000 20 -2 10 20000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 0 0 2021 2022 2023 2024 2015 2017 2019 2021 2023 2025 2027 Agriculture Industry Services International poverty rate Lower middle-income pov. rate Taxes GDP growth Upper middle-income pov. rate Real priv. cons. pc Sources: World Bank and Kenya National Bureau of Statistics. Source: World Bank. Notes: See footnotes in table on the next page. 46 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. Bank of Kenya’s (CBK) target mid-point of 5±2.5. Real credit growth is expected to remain at 4.0 percent of GDP in the medium term, to the private sector slowed to 3.3 percent year-on-year in Decem- helped by a gradual recovery of exports as trade agreements, ber (from 8.3 percent in December 2023). With inflation easing, the especially the AfCFTA, move forward. Currently, it is difficult to CBK lowered its policy rate to 10.75 percent in February 2025, from gauge the full impact of recent global trade measures as policy a high of 13 percent in July 2024. Foreign exchange reserves rose shifts may continue to unfold, with limited impacts through the to US$9,057 million (4.6 months of imports) by end-February, ver- export’s channel to growth. The fiscal deficit is projected at 4.3 sus US$6,962 (3.7 months of imports) in February 2024 and above percent of GDP in FY 2025/26, lower than in the previous year, the CBK’s statutory requirement. Exports of goods grew by 15.4 with a primary surplus of 1.6 percent. Without significant fiscal percent in 2024, mainly from agriculture and re-exports, while im- reforms, the target of achieving a present value of debt to GDP ports also recovered and grew by 9.9 percent. Moreover, remit- of 55 percent by 2029 could be missed. tances grew by 18 percent y/y in 2024. The current account deficit (CAD) reached 3.7 percent of GDP in the year. Unless growth translates more efficiently to higher incomes for the poor, poverty is unlikely to decline rapidly. At current trends, the Fiscal consolidation efforts continued during the first half of FY international poverty rate is projected to decline by half a percent- 2024/25; however, these were not enough to meet initial targets, age point to 34.0 percent in 2025. and the fiscal deficit was revised upwards to 4.9 percent of GDP. As a share of GDP, public debt is estimated lower at 65.5 percent in There are significant risks to the outlook. Missing fiscal targets FY2024/25 from 66.7 percent in 2023/24. and delays in implementing reforms would further worsen Kenya’s debt vulnerabilities, threaten macroeconomic stability, and slow private investment and jobs growth. Extreme weather Outlook events could harm agriculture and infrastructure, and increasing global geopolitical and trade policy risks could impact investment Kenya’s real GDP is expected to pick up gradually, reaching about and growth. For the monetary authority, this could trigger a 4.8 percent in 2025–27. Lower inflation and easing monetary con- more delicate balance between easing inflation pressures and ditions should support household and business incomes, driving the risk of capital flight. On the upside, faster implementation private consumption and investment. Credit growth is set to ac- of reforms and a better global environment could boost growth celerate under a more accommodative monetary policy. The CAD above expectations. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 4.9 5.6 4.5 4.5 4.9 5.0 Private consumption 3.3 6.2 5.2 5.3 5.3 5.5 Government consumption 8.1 3.5 2.0 1.5 1.9 3.4 Gross fixed capital investment -0.8 1.9 2.1 3.9 5.8 6.0 Exports, goods and services 11.9 -4.5 5.5 6.2 8.4 8.6 Imports, goods and services 4.6 -3.1 2.5 4.7 5.8 7.2 Real GDP growth, at constant factor prices 4.5 5.4 4.5 4.5 4.9 5.0 Agriculture -1.5 6.5 5.0 4.1 4.5 4.8 Industry 3.9 1.9 0.2 2.9 3.6 3.9 Services 6.6 6.2 5.6 5.1 5.4 5.4 Employment rate (% of working-age population, 15 years+) 63.4 63.2 63.4 63.6 63.6 63.7 Inflation (consumer price index) 7.6 7.7 4.5 5.0 5.0 5.0 Current account balance (% of GDP) -5.2 -4.0 -3.7 -4.0 -4.0 -4.0 Net foreign direct investment inflow (% of GDP) 0.2 0.2 0.3 0.4 0.7 1.2 1,2 Fiscal balance (% of GDP) -5.7 -5.4 -5.1 -4.5 -3.6 -3.3 Revenues (% of GDP) 17.7 18.0 18.5 18.4 18.5 18.6 Debt (% of GDP) 76.2 69.9 68.1 65.8 62.9 59.9 Primary balance (% of GDP) -0.6 0.1 0.8 1.6 1.9 1.8 3,4 International poverty rate ($2.15 in 2017 PPP) 35.9 35.2 34.6 34.0 33.4 32.9 3,4 Lower middle-income poverty rate ($3.65 in 2017 PPP) 69.9 69.2 68.7 68.2 67.7 67.1 3,4 Upper middle-income poverty rate ($6.85 in 2017 PPP) 91.0 90.1 89.5 88.8 88.1 87.4 GHG emissions growth (mtCO2e) -1.9 3.5 5.7 6.6 6.1 6.2 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Fiscal data are in fiscal years 2022= FY2022/23. 2/ Fiscal data from Kenya's National Treasury, revised per GFS 2014. Numbers may vary from official estimates due to GDP projection differences. 3/ Projection using point to point elasticity at regional level with pass-through = 0.7 based on private consumption per capita in constant LCU. Actual data: 2021. Nowcast: 2022-2024. Forecasts are from 2025 to 2027. 4/ Actual data: 2021. Nowcast: 2022-2024. Forecasts are from 2025 to 2027. Macro Poverty Outlook / April 2025 47 This outlook reflects information available as of April 10, 2025. 1 2 LESOTHO Population Poverty million millions living on less than $3.65/day 2.3 1.2 3 4 Life expectancy at birth School enrollment Growth is projected at 1.5 percent in 2025, due to uncertainty years primary (% gross) in trade policy that could impact exports and investment. High- lands Water Project, higher water royalties and Southern 53.0 86.4 5 6 African Customs Union revenues will moderate the slowdown. GDP GDP per capita Without reforms and with weak private sector investment, the current US$, billion current US$ economy is expected to revert to its low growth and high unem- ployment trend. Consequently, the poverty rate will remain 2.6 1102.6 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2017 (2017 PPPs). 3/ 2022. high at around 36 percent, using the international poverty line. 4/ 2023. 5/ 2024. 6/ 2024. revenues could be managed by implementing fiscal rules and es- Key conditions and challenges tablishing a stabilization fund. To increase the effectiveness of the use of public resources, Lesotho could contain the buildup in ar- Growth has been low over the past decade, owing to structural rears and public sector wage growth. This would make room for weaknesses and external shocks. Expanding employment opportu- higher capital spending to improve connectivity and reduce region- nities is key to reduce Lesotho’s high unemployment rate, estimat- al disparities. Better targeting in social programs and agriculture ed at 22.5 percent in 2019, and to alleviate widespread poverty, as subsidies could improve the programs’ effectiveness in reducing an estimated 36.3 percent of the population was living on less than economic disparities and improving agriculture productivity. Enact- $2.15 per day (2017 PPP) in 2024. Poverty is particularly severe in ing the Public Financial Management Act would upgrade public fi- the rural highlands, where limited access to essential services and nancial management and enhance macroeconomic coordination, market opportunities exacerbates economic hardship. budgeting processes, and execution rates. Improving public invest- ment management is a priority for growth. Limited dynamism of the private sector coupled with heightened uncertainty in trade policy have limited potential growth. Efficiency gains and private investment have remained low because of the Recent developments dominant role of the public sector in the economy, complex and unclear business regulations, limited competition, and challenges Growth increased by an estimated 2.3 percent in 2024, owing to in accessing credit and skilled labor. Despite substantial investment public investment that also generated positive spillover effects in in education, learning performance is among the lowest in Southern the local services industry. By contrast, export-oriented sectors Africa, with significant disparities across economic groups. like textiles, clothing, and mining underperformed due to weaker foreign demand and lower commodity prices. Inflation dropped Weaknesses in fiscal policy management limit its effectiveness in to 4.1 percent in February 2025 from 5.2 percent in September spurring growth. Volatile Southern Africa Customs Union (SACU) 2023, owing to lower fuel and food prices and a stronger Rand, FIGURE 1 / Fiscal surpluses in the medium-term FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percentage of GDP Percentage of GDP Poverty rate (%) Real GDP per capita (constant LCU) 70 12 90 10500 10 80 60 10000 8 70 50 6 60 9500 40 4 50 2 9000 40 30 0 30 8500 20 -2 20 -4 8000 10 10 -6 0 7500 0 -8 2017 2019 2021 2023 2025 2027 2022 2023 2024e 2025f 2026f 2027f International poverty rate Lower middle-income pov. rate Expenditures (lhs) Revenues (lhs) Balance (rhs) Upper middle-income pov. rate Real GDP pc Sources: WDI and World Bank staff estimates. Source: World Bank. Notes: See footnotes in table on the next page. 48 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. which reduced imported inflation. The Central Bank cut the policy policies and external conditions. Exports and private investment rate by a cumulative 50 basis points from 7.75 percent in Novem- are expected to remain subdued and, consequently, employment ber 2024 to 7.25 percent in February 2025. It left the policy rate growth is expected to insufficient to reduce the poverty rate that unchanged at its March seating. will remain high at 36 percent, using the international poverty line of US$2.15 per day. In 2024, Lesotho reported a high fiscal surplus of 8.8 percent of GDP driven by increased Southern African Customs Union (SACU) Inflation is projected to rise but remain below 6 percent in the revenues (from 14.4 percent in 2022 to 27.8 percent of GDP in medium-term as the costs of imported goods and services are ex- 2024) and higher water royalties (from 3.7 percent in 2022 to 7.2 pected in response to trade policies shifts. Monetary policy will percent of GDP in 2024). Meanwhile, existing rigidities in capital continue to align closely with regional market rates. spending and some restraint in recurrent spending public expen- ditures limited the increase in expenditure. Authorities used part The current account balance is expected to return to a deficit over of the budget surplus to clear 1.8 percent of GDP in arrears, the medium term due to lower exports, particularly of textiles, low- bringing outstanding arrears to about 0.6 percent of GDP. De- er remittances and lower SACU revenues. Completion of LHWP-II spite fiscal surpluses, public debt rose to 59 percent of GDP in and increased water royalties are expected to contain the widening 2024 as the government continued to borrow from both domes- of the current account deficit in the medium-term. tic and external markets. Lower SACU revenues and higher US tariffs are expected to in- The current account balance shifted from a deficit of 6.4 percent of crease fiscal pressures in the medium-term. GDP in 2023 to a surplus of 4.3 percent of GDP in 2024, support- ed by higher remittances, increased interest income and SACU rev- Downside risks have intensified given recent developments in the enue. The trade deficit also improved, driven by water exports. global environment. Uncertainty in trade policy globally and bilat- eral aid flows could increase social tensions and increase spending pressures. Delays in the implementation of MCC Compact II would Outlook hinder growth, job creation and exports prospects. Failure to ex- tend the African Growth and Opportunity Act could impact nega- After declining to 1.5 percent in 2025, growth is projected to aver- tively textile exports, leading to an increase in unemployment. Do- age 0.8 percent between 2026 and 2027. Uncertainty in trade poli- mestic risks include political instability and fiscal mismanagement cy, following the imposition of higher tariffs is expected to weigh on that could reduce fiscal buffers. Conversely, a bold reform program growth. Trade policy shifts affect Lesotho’s exports, remittances, to improve fiscal policy management (including through the adop- investment and growth. Phase II of the Lesotho Highlands Water tion of fiscal rules), ease business conditions, and facilitate trade Project (LHWP-II) is expected to provide some impetus to growth, and international investment could spur private investment, higher albeit, with limited prospects beyond its timeframe under current exports and job creation. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 2.4 1.8 2.3 1.5 0.9 0.6 Private consumption 9.1 3.8 3.8 3.9 3.9 3.7 Government consumption 2.4 2.2 13.5 21.2 7.8 7.1 Gross fixed capital investment 18.9 49.4 17.4 4.2 23.3 20.8 Exports, goods and services 36.7 2.2 2.2 -0.3 -0.6 -1.0 Imports, goods and services 22.5 10.3 10.8 11.2 9.8 9.3 Real GDP growth, at constant factor prices 2.3 1.8 2.3 1.5 0.9 0.6 Agriculture 12.5 2.4 1.5 1.5 1.7 1.8 Industry 5.0 5.0 5.3 3.2 2.8 2.0 Services 0.9 0.8 1.3 0.9 0.2 0.0 Employment rate (% of working-age population, 15 years+) 54.1 54.5 54.5 54.5 54.5 54.5 Inflation (consumer price index) 8.3 6.4 6.1 5.6 5.7 5.8 Current account balance (% of GDP) -11.7 -6.4 4.4 -1.6 -4.8 -11.1 Net foreign direct investment inflow (% of GDP) 1.2 1.4 1.8 1.0 1.0 1.0 Fiscal balance (% of GDP) -5.5 7.1 8.8 0.1 -0.3 -2.4 Revenues (% of GDP) 50.8 58.0 61.6 58.4 57.1 55.0 Debt (% of GDP) 57.3 55.1 59.2 58.9 57.1 53.9 Primary balance (% of GDP) -4.2 8.2 10.0 1.3 1.0 -1.4 1,2 International poverty rate ($2.15 in 2017 PPP) 36.7 36.6 36.3 36.1 36.2 36.4 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 59.3 59.1 58.7 58.6 58.6 58.9 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 84.5 84.3 84.1 83.8 83.8 84.1 GHG emissions growth (mtCO2e) 1.7 2.2 2.3 2.3 1.8 2.0 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2017-CMSHBS. Actual data: 2017. Nowcast: 2018-2024. Forecasts are from 2025 to 2027. 2/ Projection using neutral distribution (2017) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU. Macro Poverty Outlook / April 2025 49 This outlook reflects information available as of April 10, 2025. 1 2 LIBERIA Population Poverty million millions living on less than $2.15/day 5.6 1.3 3 4 Life expectancy at birth School enrollment Liberia's economy expanded by 4.8 percent in 2024, driven by years primary (% gross) mining, services, and agricultural recovery. Inflation remained controlled, and fiscal conditions improved. Uncertainties in 61.1 67.2 5 6 global economy and aid landscape are expected to affect GDP GDP per capita Liberia’s economy. Structural constraints continue to hinder current US$, billion current US$ diversification, making better resource mobilization vital for investments and poverty reduction. Extreme poverty fell to 4.8 846.3 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2016 (2017 PPPs). 3/ 2022. 26.4 percent in 2024 and is projected to continue declining. 4/ 2022. 5/ 2024. 6/ 2024. Key conditions and challenges Recent developments Liberia’s commodity-driven growth model has failed to en- Liberia’s economy grew by 4.8 percent in 2024, fueled by mining, sure sustained progress. Real per capita income rose 34 services, and agricultural recovery. The industrial sector expanded percent from 2004 to 2013 but declined 6.6 percent to by 6.0 percent, driven by iron ore, gold mining, and construction, US$716 by 2024. Structural constraints, poor infrastructure, while services grew by 4.2 percent, boosted by finance, hospitality, and limited fiscal space hinder economic potential, while trade, and transport. Agricultural output rose by 3.5 percent, up informal, low-productivity jobs dominate the labor market. from 1.4 percent, reflecting higher rubber production. On the de- Institutional weaknesses place Liberia in the bottom 25 mand side, growth was driven by private consumption and in- percentile of governance rankings, and service delivery re- creased gold and iron ore exports. mains inadequate. Declining aid poses short-term challenges but strengthens incentives for reforms. Achieving inclusive Headline inflation eased to 8.4 percent in 2024, down from 10.1 growth requires maintaining macroeconomic stability, diver- percent in 2023, driven by the Central Bank of Liberia’s tight sifying beyond mining towards activities better aligned with monetary policy, stable exchange rates, and lower food and fuel the labor demands, empowering the private sector, and prices. The policy rate remained above inflation, holding at 20 implementing deep policy and institutional reforms. Long- percent for most of the year before dropping to 17 percent in term shifts in the aid landscape, coupled with a less fa- the last quarter. The exchange rate depreciated by 8 percent vorable global environment, are likely to impact small open on average, an improvement from 12 percent in 2023. Food in- economies like Liberia, which are heavily reliant on global flation fell to 9.7 percent by December 2024, down from 26.9 demand and favorable financial conditions. percent a year earlier, while imported fuel saw disinflation of FIGURE 1 / Real GDP growth and sectoral contributions to real FIGURE 2 / Actual and projected poverty rates and real GDP per GDP growth capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 6 100 900 90 800 5 80 700 4 70 600 60 500 3 50 400 40 2 300 30 20 200 1 10 100 0 0 0 2022 2023 2024e 2025f 2026f 2027f 2014 2016 2018 2020 2022 2024 2026 International poverty rate Lower middle-income pov. rate Agriculture Industry Services Real GDP growth Upper middle-income pov. rate Real GDP pc Sources: Liberian authorities and World Bank staff estimates and projections. Source: World Bank. Notes: See footnotes in table on the next page. 50 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. 10.4 percent from a previous inflation of 13 percent. However, in- comprising 10 percent from foreign direct investment, 8.7 per- flationary pressures started building at the end of 2024 and infla- cent from multilateral and private financing, and 3 percent from tion reached 13.1 percent in February 2025, driven by rising costs capital account inflows. in food, healthcare, and the restaurant sector. Persistent economic challenges—slow growth, high inflation, lim- Outlook ited job opportunities, and inadequate social protection—have significantly increased poverty. By 2022, the extreme poverty Real GDP is expected to grow around 5 percent in 2025, driven by rate had climbed to 40.9 percent, up from 24.8 percent in 2019. continued expansion in mining, especially gold, and improvements However, more favorable economic conditions, particularly eas- in agriculture and services. Medium-term growth will be support- ing inflation have helped reverse this trend, with poverty de- ed by key reforms in energy, increased foreign direct investment in clining to 26.4 percent in 2024. These estimates—based on the mining, and infrastructure development. Tightened monetary pol- international poverty line of US$2.15 per person per day (2017 icy and a conservative fiscal stance are projected to curb inflation. PPP)—use a new methodology that incorporates both economic Fiscal sustainability depends on successful implementation of con- growth and inflation. solidation measures, with fiscal deficit expected to average 2.6 per- cent of GDP from 2025 to 2027. Public debt is projected to decline Fiscal conditions improved, with the overall deficit shrinking to 2.7 to 54 percent of GDP by 2027. While external balances will remain percent of GDP from 7.1 percent in 2023, while the primary deficit high, they are expected to improve to 18 percent of GDP by 2027. declined to 1.5 percent from 6.1 percent. This improvement was Gross international reserves are projected to strengthen, covering largely due to a 4 percent of GDP reduction in public spending on three months of imports by 2027, up from two months in 2024. goods and services and a modest 0.8 percent of GDP increase in domestic revenue. Public debt stood at 57 percent of GDP in 2024, Poverty is projected to decline, reaching 20.9 percent by 2027, dri- slightly lower than 58.8 percent in 2023. ven by sustained economic growth and easing inflation. However, structural reforms remain crucial to foster inclusive growth and ac- Liberia's current account deficit (CAD) remained high at 22.1 per- celerate poverty reduction. cent of GDP in 2024, though lower than 26.4 percent in 2023, reflecting a persistent gap between savings and investment. The Significant risks could threaten this outlook. Weak governance, fis- trade deficit narrowed to 13.7 percent of GDP, down from 19 cal and monetary slippages, a sharper-than-expected decline in percent in 2023, thanks to a 4 percentage points increased in ex- aid, volatility in commodity prices, ongoing shifts and heightened ports driven by gold and iron ore. The CAD is financed by capital uncertainty in global trade policy could undermine macroeconomic and financial account inflows equivalent to 21.6 percent of GDP, stability, growth and poverty reduction. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 4.8 4.7 4.8 5.1 5.5 5.7 Private consumption 3.3 3.5 3.7 3.6 3.8 3.9 Government consumption -5.7 0.0 -19.0 2.4 3.0 5.7 Gross fixed capital investment 9.4 36.2 3.4 2.5 8.1 7.8 Exports, goods and services 7.7 23.6 21.1 10.4 6.1 6.1 Imports, goods and services 3.1 25.1 6.9 4.5 4.0 4.0 Real GDP growth, at constant factor prices 4.8 4.7 4.3 4.8 5.4 5.8 Agriculture 5.9 1.4 3.5 5.8 5.9 5.8 Industry 6.7 13.9 6.0 6.3 6.0 5.6 Services 2.8 3.7 4.2 3.1 4.5 5.8 Employment rate (% of working-age population, 15 years+) 74.3 74.7 74.7 74.7 74.7 74.7 Inflation (consumer price index) 7.6 10.1 8.4 7.2 5.6 5.1 Current account balance (% of GDP) -17.7 -26.4 -22.1 -19.9 -19.5 -18.0 Fiscal balance (% of GDP) -5.3 -7.1 -2.7 -3.5 -2.3 -2.2 Revenues (% of GDP) 21.4 20.1 19.2 20.3 21.2 21.6 Debt (% of GDP) 53.9 58.8 57.2 57.0 56.1 54.7 Primary balance (% of GDP) -4.4 -6.1 -1.5 -2.2 -0.9 -0.7 1,2 International poverty rate ($2.15 in 2017 PPP) 40.9 27.5 26.4 25.2 23.2 20.9 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 76.0 61.4 61.4 58.9 56.7 53.7 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 95.5 90.0 90.0 89.3 88.0 86.7 GHG emissions growth (mtCO2e) 3.2 3.2 3.1 3.1 3.2 3.2 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2016-HIES. Actual data: 2016. Nowcast: 2017-2024. Forecasts are from 2025 to 2027. 2/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 51 This outlook reflects information available as of April 10, 2025. 1 2 MADAGASCAR Population Poverty million millions living on less than $2.15/day 32.0 18.9 3 4 Life expectancy at birth School enrollment Economic growth remained at 4.2 percent in 2024 sup- years primary (% gross) ported by tourism-related activities and telecommunications. Fiscal balance improved at the cost of limited social and cap- 65.2 135.8 5 6 ital spending. Growth is projected to average 4 percent in GDP GDP per capita the medium term. The poverty rate is expected to slightly current US$, billion current US$ decline but remain high at around 79 percent. Global trade policy uncertainty, underperforming state-owned enterprises, 17.4 545.0 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2012 (2017 PPPs). 3/ 2022. and external shocks pose risks to investment and growth. 4/ 2023. 5/ 2024. 6/ 2024. Reducing persistent poverty and promoting high and resilient Key conditions and challenges growth requires improved governance, a conducive business environment, structural reforms in key sectors (particularly en- Average real incomes have declined over time, with GDP per ergy, mining, and telecommunications) and faster human and capita falling from US$812 to US$456 between 1960 and 2024 physical capital accumulation. (in constant 2015 US dollars). The poverty rate is amongst the highest worldwide. In 2024, 80 percent of the population lived below the new international poverty line of US$2.15 per day at Recent developments 2017 PPP. While rural poverty remains a serious challenge, ur- ban areas have experienced a significant deterioration over the Economic growth is estimated at 4.2 percent in 2024 (1.7 past decade. percent in per capita terms). On the supply side, growth was driven by the services sector, especially tourism-re- Despite an increase since the 2010s, when growth averaged 3 lated activities and telecommunications. Increased air traf- percent per year, current growth remains insufficient to support fic and the entry of new airlines boosted tourist arrivals, job creation and sustain poverty reduction, especially with a pop- surpassing pre-pandemic levels for the first time in 2024. ulation growth of 2.4 percent per year. Growth is constrained The introduction of a new telecom licensing regime fos- by the predominance of low-productivity sectors (such as sub- tered competition and growth. Meanwhile, labor-intensive sistence agriculture), poor infrastructure, and slow human capi- sectors (such as agriculture, agrobusiness, and textiles) tal accumulation. The situation is aggravated by low tax-to-GDP have struggled, due to lower global demand. On the de- ratio (under 11 percent) limiting the provision of public goods. mand side, growth was driven by private investment and Commodity price volatility combined with the lack of export and private consumption. Inflation eased slightly in 2024 but market diversification, climate shocks, and elite capture have all remained high at 7.6 percent, driven by energy, housing, hindered a faster and inclusive growth. and apparels costs. To curtail inflation, the central bank FIGURE 1 / Real GDP growth and demand-side contributions to FIGURE 2 / Actual and projected poverty rates and real GDP per real GDP growth capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 10 100 820000 8 90 800000 6 80 780000 4 70 760000 60 2 740000 50 0 720000 40 -2 700000 30 -4 20 680000 -6 10 660000 2023 2024e 2025e 2026f 2027f 0 640000 Gov. cons. Exports GFCF 2010 2012 2014 2016 2018 2020 2022 2024 2026 Inventories Private cons. Imports International poverty rate Lower middle-income pov. rate Statistical disc. GDP Upper middle-income pov. rate Real GDP pc Sources: Ministry of Economy and Finances and World Bank estimate. Source: World Bank. Notes: See footnotes in table on the next page. 52 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. increased the policy rates (deposit facility and marginal lending rates) by 50 basis points (bps) in August 2024, Outlook in addition to the cumulative increase of 90 bps since October 2022. Growth is projected to average 4 percent over 2025–27, driven by mining and tourism-related services. Over the medium term, in- The external position remained resilient, despite mounting flation is projected to average 8.1 percent due to the high cost of pressures on the current account. The current account deficit food. The monetary policy stance is expected to remain restrictive (CAD) widened from 4.7 to 5 percent in 2024, due primarily to amid persistent inflation. Global trade policy uncertainties are ex- deteriorated merchandise trade driven by lower global demand pected to negatively affect the trade balance and contribute to a and falling prices for major exports (such as vanilla, cloves, widening in the CAD to 6.4 percent of GDP in 2025 before declin- cobalt, and nickel). Goods imports also declined, though to a ing over the medium term. The CAD is expected to be financed by lesser extent. Meanwhile services trade improved. The CAD was increased FDI inflows related to mining. The international poverty mainly financed by foreign direct investment (FDI) and project rate is projected to slightly decrease to 78.7 percent by 2027. grants, which helped bolster international reserves (equivalent of 6.3 months of imports at the end of 2024). After a slight The fiscal deficit is projected to stay around 4 percent of GDP. Un- appreciation against the US dollar in early 2024 (y/y), owing to certain global trade conditions and lower economic growth are ex- external financing inflows, the ariary depreciated by 2.7 percent pected to weigh on tax collection. However, the negative impact by end 2024. on revenue performance is expected to be mitigated by further re- forms in rationalizing tax expenditures and improved tax adminis- The fiscal deficit narrowed to 3.3 percent of GDP in 2024, re- tration. Ongoing reforms of the state-owned utility JIRAMA are like- flecting spending cuts rather than improved revenue. Total rev- ly to improve its financial performance and thus result in a gradual enue and grants were estimated at 13.6 percent of GDP in 2024, decline in fiscal transfers. Reforms supported by the IMF program with the tax-to-GDP ratio declining slightly to 10.8 percent due to are expected to help reduce the fiscal deficit, which is projected to weakened international trade, in a context of generous tax ex- be mainly financed by external borrowing. The public debt stock is emptions. Total expenditure declined to 16.9 percent of GDP in expected to remain below 55 percent of GDP. 2024. Transfers and subsidies remained high, crowding out in- vestment and social spending, and risking further undermining The outlook faces downside risks stemming from heightened productivity and medium-term growth. The debt-to-GDP ratio is trade policy uncertainty, underperforming state-owned enterpris- estimated to slightly decline to 51.3 percent, while the risk of es, and external shocks, notably, commodity price volatility and debt distress remains moderate. adverse weather conditions. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 4.2 4.2 4.2 3.7 3.9 4.4 Private consumption 0.1 4.5 2.6 2.5 2.5 2.5 Government consumption 5.7 -1.1 -4.1 0.2 5.7 6.2 Gross fixed capital investment 4.4 3.3 17.5 18.4 10.9 7.4 Exports, goods and services 26.5 2.4 0.8 -1.9 6.6 5.7 Imports, goods and services 21.2 -4.7 0.9 6.0 8.9 5.3 Real GDP growth, at constant factor prices 3.9 4.2 4.2 3.7 3.9 4.4 Agriculture 2.0 5.3 4.8 2.5 2.8 3.4 Industry 9.3 1.8 3.2 1.0 1.5 2.5 Services 3.4 4.4 4.2 4.9 5.1 5.2 Employment rate (% of working-age population, 15 years+) 83.5 83.6 83.6 83.6 83.6 83.6 Inflation (consumer price index) 8.2 9.9 7.6 8.5 8.1 7.7 Current account balance (% of GDP) -5.4 -4.7 -5.0 -6.4 -6.1 -5.8 Net foreign direct investment inflow (% of GDP) 2.1 2.2 2.8 3.5 2.3 2.4 Fiscal balance (% of GDP) -5.5 -4.2 -3.3 -3.9 -4.2 -3.9 Revenues (% of GDP) 10.8 13.7 13.6 12.1 12.6 13.5 Debt (% of GDP) 50.0 52.7 51.3 53.3 54.2 54.6 Primary balance (% of GDP) -4.9 -3.5 -2.6 -2.9 -3.2 -3.0 1,2 International poverty rate ($2.15 in 2017 PPP) 81.0 80.5 80.0 79.7 79.4 78.7 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 92.6 92.3 92.1 91.9 91.8 91.6 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 98.2 98.1 98.1 98.0 98.0 97.9 GHG emissions growth (mtCO2e) 0.7 1.6 1.3 1.1 1.0 1.0 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2012-ENSOMD. Actual data: 2012. Nowcast: 2013-2024. Forecasts are from 2025 to 2027. 2/ Projection using neutral distribution (2012) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU. Macro Poverty Outlook / April 2025 53 This outlook reflects information available as of April 10, 2025. 1 2 MALAWI Population Poverty million millions living on less than $2.15/day 21.7 13.3 3 4 Life expectancy at birth School enrollment Growth slowed to 1.8 percent in 2024 due to a severe years primary (% gross) drought and is projected at 2.0 percent for 2025 amid a weak recovery and continued foreign currency shortages. 62.9 135.4 5 6 High inflation, driven by deficit financing and escalating food GDP GDP per capita and utility costs, exacerbates poverty and food insecurity. current US$, billion current US$ 71.3 percent of Malawians are expected to be below the $2.15 per day poverty line in 2025. 11.0 508.4 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2019 (2017 PPPs). 3/ 2022. 4/ 2023. 5/ 2024. 6/ 2024. remain critically low, as inflows from official exports, foreign in- Key conditions and challenges vestment, remittances and grants have not kept pace with im- port demand. Consequently, foreign exchange is tightly rationed, In the past three years, per capita income has declined as Malawi's and there is a growing spread between the official exchange rate economic growth lagged population growth. The period has seen and the parallel market rate. widening fiscal and current account deficits, an unsustainable debt burden, increasing capital and price controls, and severe foreign Despite significant progress in reducing child mortality and exchange shortages, hindering economic stabilization efforts. Fre- fertility rates, hunger remains a critical concern due to suc- quent climatic disasters and other exogenous shocks have exacer- cessive weak harvests since 2022. This has hindered human bated these challenges, making it difficult for poor households to capital development, with the rate of stunted children under build resilience. five stagnant at 38.0 percent since 2015. Foreign exchange constraints have also limited imports to compensate for the Despite attempts at stabilization, efforts to address rising fiscal food supply deficit. and external imbalances have stalled, deepening macroeconomic challenges. Structural challenges are compounded by fiscal slip- pages financed by high-cost domestic debt, with debt service Recent developments consuming over 56.0 percent of domestic revenue in 2024. The country remains in external debt distress and the debt-to-GDP In 2024, Malawi’s economy faced significant challenges, with real ratio has reached 90.2 percent. While agreements to restructure GDP growth slowing to 1.8 percent due to a severe drought and official bilateral debt have been reached, progress on restruc- acute foreign exchange shortages. The poverty rate rose to 71.2 turing external commercial debt is advancing slowly. Quasi-fiscal percent. The interplay of external sector imbalances, inflationary activities, such as below-market sales of foreign exchange, have pressures, and fiscal constraints has deepened economic vulnera- increased, posing fiscal risks. Official foreign-exchange reserves bilities, impeding recovery prospects. FIGURE 1 / Actual and projected revenues, expenditures, and FIGURE 2 / Actual and projected poverty rates and real GDP per budget deficit capita Percent of GDP Percent of GDP Poverty rate (%) Real GDP per capita (constant LCU) 35 2 100 390000 0 90 380000 30 -2 80 25 370000 -4 70 60 360000 20 -6 50 350000 15 -8 40 340000 -10 30 10 330000 -12 20 5 10 320000 -14 0 -16 0 310000 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2010 2012 2014 2016 2018 2020 2022 2024 2026 International poverty rate Lower middle-income pov. rate Budget deficit (rhs) Revenues Expenditures Upper middle-income pov. rate Real GDP pc Source: World Bank staff estimates and projections. Source: World Bank. Notes: See footnotes in table on the next page. 54 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. The external sector deteriorated sharply, with the current ac- due to El Niño-induced drought conditions. Additionally, modest count deficit widening to 22.0 percent of GDP in 2024. Imports growth is anticipated in the industrial and services sectors. However, surged to 28.4 percent of GDP, far outpacing exports (10.1 per- these sectors remain subdued due to the continued unavailability of cent of GDP). This imbalance severely strained official foreign ex- foreign exchange, which is constraining the importation of produc- change reserves, which have remained below one month of im- tion inputs. Real GDP growth is projected at 2.4 percent in 2026. This port cover for the past two years, exacerbating the country’s vul- stagnation impedes efforts to reduce poverty. nerability to shocks. Implementation of exchange rate reforms announced in November 2023 has stalled, leading to a widening The budget deficit is expected to widen to 8.7 percent of GDP in spread between official and parallel rates and increasing distor- 2025, driven by election year spending and the need to absorb tions in the foreign exchange market. some critical expenditures previously financed by the United States government. Inflation is expected to remain above 30 percent due Following a period of moderation in late 2024, inflationary pres- to a weaker agricultural recovery, the imposition of new import sures have reemerged, primarily driven by escalating food and bans constraining supply, as well as continued high money supply utility costs, as well as depreciation of the parallel exchange rate, growth. The real appreciation of the official exchange rate will con- with the poorest households and those in urban areas hit hard- tinue to incentivize imports and discourage export growth, deep- est. Headline inflation remains high at 30.7 percent in February ening external imbalances. 2025, largely due to a sharp rise in food prices, disproportional- ly affecting the poorest households. The Reserve Bank of Malawi The number of people living in poverty is expected to increase has maintained the monetary policy rate at 26.0 percent since in 2025 amidst this challenging economic environment and rising February 2024. Concurrently, money supply growth remains ele- food insecurity, with an additional 417,000 people falling below the vated, reaching 37.8 percent in February 2025, driven in part by $2.15 per day threshold, bringing the total number of people living high deficit financing. in poverty to 15.8 million. The fiscal deficit in 2024 remained high at 8.4 percent, driven by The outlook is subject to significant downside risks, including po- overly optimistic revenue projections and expenditure slippages. tential fiscal slippages that could entrench macroeconomic insta- The primary deficit remains high at 1.4 percent of GDP. bility. While direct and indirect effects of recent trade policy shifts have caused a downward shift in growth projections, continued un- certainty and weaker than expected global demand may further Outlook adversely affect Malawi’s growth prospects. Failure to address ex- ternal imbalances may further perpetuate input shortages. Upside Real GDP is projected to grow modestly by 2.0 percent in 2025, which risks include the potential unfreezing of US aid to Malawi, easing would not be sufficient to prevent a fourth consecutive contraction in of trade restrictions, faster-than-expected development of mining per capita income. GDP growth will be driven by a modest recovery mega-projects, and the rapid conclusion of debt-restructuring ne- in the agricultural sector, which experienced negative growth in 2024 gotiations with commercial external creditors. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 0.9 1.9 1.8 2.0 2.4 3.2 Private consumption 0.6 3.8 4.7 4.8 5.6 5.6 Government consumption -5.8 14.8 15.5 0.4 -1.9 2.5 Gross fixed capital investment 12.4 -14.3 -14.2 -11.6 -25.1 -33.8 Exports, goods and services 3.1 3.5 8.8 6.7 6.0 6.0 Imports, goods and services 3.9 3.9 9.6 6.3 3.9 3.9 Real GDP growth, at constant factor prices 1.1 1.7 1.8 2.0 2.4 3.2 Agriculture 0.9 0.7 -0.2 2.2 3.0 3.9 Industry -0.7 2.5 2.1 2.2 2.2 2.7 Services 1.9 1.8 2.6 1.8 2.2 3.1 Inflation (consumer price index) 20.9 28.7 32.3 34.7 27.8 19.4 Current account balance (% of GDP) -17.8 -17.8 -22.0 -21.9 -17.7 -17.1 Net foreign direct investment inflow (% of GDP) 1.7 1.6 1.1 1.0 1.3 1.2 Fiscal balance (% of GDP) -10.8 -13.4 -8.4 -8.7 -7.1 -7.3 Revenues (% of GDP) 17.2 18.7 20.1 21.2 21.7 23.2 Debt (% of GDP) 76.7 90.3 90.2 81.9 78.8 64.9 Primary balance (% of GDP) -6.1 -8.3 -1.4 -0.6 -1.2 -1.6 1,2 International poverty rate ($2.15 in 2017 PPP) 70.6 70.9 71.2 71.3 71.2 70.9 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 89.3 89.4 89.5 89.5 89.5 89.4 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 97.4 97.4 97.4 97.5 97.4 97.4 GHG emissions growth (mtCO2e) 1.5 1.6 1.5 1.5 1.5 1.5 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2019-IHS-V. Actual data: 2019. Nowcast: 2020-2024. Forecasts are from 2025 to 2027. 2/ Projection using neutral distribution (2019) with pass-through = 0.7 (Low (0.7)) based on GDP per capita in constant LCU. Macro Poverty Outlook / April 2025 55 This outlook reflects information available as of April 10, 2025. 1 2 MALI Population Poverty million millions living on less than $2.15/day 24.5 4.7 3 4 Life expectancy at birth School enrollment In 2024, GDP growth is estimated at 4.0 percent (1.0 percent years primary (% gross) per capita), driven by agriculture and services, while elec- tricity shortages continued to hinder industrial production. 59.4 74.4 5 6 Inflation averaged 3.2 percent. Growth is projected to slightly GDP GDP per capita increase in 2025, supported by new lithium production and current US$, billion current US$ telecommunication investments. Poverty remains largely unchanged. The outlook is subject to downside risks from 22.0 898.0 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2021 (2017 PPPs). 3/ 2022. security concerns, climate shocks and debt roll-over. 4/ 2023. 5/ 2024. 6/ 2024. forming the Confederation of Sahel States (AES), have replaced Key conditions and challenges the ECOWAS passport with their own unified passport. However, Malian citizens and businesses retain access to key ECOWAS Mali’s economy remains undiversified and exposed to climate and membership benefits, including the free movement of people commodity shocks. The economic landscape is dominated by low and goods, pending further decisions. The authorities have reit- productivity services and rain-fed agriculture, while manufacturing erated Mali’s intention to remain in the West African Economic is limited to agro-industries and cotton ginning. Gold and cotton and Monetary Union (WAEMU). dominate exports, with the mining sector receiving over half of in- ward foreign direct investment (FDI). Export diversification is con- strained by Mali’s landlocked position, low human capital, and Recent developments weak productivity. GDP growth increased to 4.0 percent in 2024 (estimate), equivalent The security and energy crises continue to affect economic growth. to 1 percent per capita, driven by services and agriculture. Services Insecurity has limited access to rural areas and hindered economic growth accelerated mainly due to investments in transport and activity. The secondary sector has been affected by electricity communication network expansion and modernization. Agricul- shortages since August 2023, caused by challenges in sector man- ture benefited from productivity gains in cereal production as a re- agement and mounting debts to suppliers. Uncertainty around re- sult of agricultural intensification and the application of adapted gional dynamics adds to these challenges. cultivation techniques. On January 29, 2025, Mali formally exited Economic Community A drop in gold production from about 74,300 to 57,800 met- of West African States (ECOWAS) along with Burkina Faso and ric tons, caused by mine closures related to tax disputes, Niger, following a joint withdrawal announcement of January led the secondary sector to contract in 2024. Nevertheless, 2024 and unsuccessful mediation efforts. The three countries, the current account deficit as a share of GDP narrowed from FIGURE 1 / Budget balance and changes in tax revenue and debt FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent of GDP Poverty rate (%) Real GDP per capita (constant LCU) 4 100 270000 90 260000 2 80 70 250000 0 60 240000 50 -2 40 230000 30 220000 -4 20 210000 10 -6 0 200000 2022 2023 2024e 2025p 2026p 2027p 2022 2023 2024 2025 2026 2027 Change in debt Change in tax revenue International poverty rate Lower middle-income pov. rate Fiscal balance WAEMU fiscal balance floor Upper middle-income pov. rate Real GDP pc Sources: Government of Mali and World Bank staff estimates. Source: World Bank. Notes: See footnotes in table on the next page. 56 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. 7.2 to 6.3 percent, due to sustained cotton exports and a no changes in the security situation, some improvement in electric- decline of oil and food imports. ity supply and a stable policy environment. Headline inflation rose to 3.2 percent in 2024, driven by floods, The current account deficit is projected to improve in 2025, driven pests, and security challenges. Agricultural growth barely exceed- by lithium and cotton production and higher gold prices. The fiscal ing the rate of population growth led to poverty at the international deficit is forecast to return slightly below the WAEMU ceiling of 3 poverty line remaining largely unchanged at 21 percent. percent of GDP in 2025 due to increased tax revenue from the ex- tractive sector. The ECOWAS exit is not expected to have significant The WAEMU inflation rate fell to 3.5 percent in 2024 but remained impacts on the economy or prices. above the 1–3 percent WAEMU target band. Regional foreign re- serves increased from 3.5 months of imports in 2023 to 4.7 months The regional inflation rate is expected to align with the WAEMU in 2024, reflecting the resumption of international bond issuances, target band from 2025 onwards (including for Mali), while re- IMF, and World Bank disbursements. The Central Bank of West gional reserves are projected to rise to 5.4 months of imports African States kept its policy interest rates at 3.5 percent for liquid- in 2025, supported by recovering exports, and lower Euro Area ity calls and 5.5 percent for the marginal lending facility. interest rates. The fiscal deficit narrowed to 2.9 percent of GDP in 2024, mainly Consistent with past trends, poverty in 2025 is projected to re- due to delays in government recruitment programs, leading to a main broadly unchanged, as gains from per capita GDP and agri- temporary fall in the public wage bill. Tax digitalization and cus- cultural growth are offset by rising food prices. In Menaka, Kidal, toms measures supported the fiscal consolidation. The fiscal deficit and Mopti, poverty is expected to rise sharply, driven by severe is predominantly financed through domestic borrowing from the food price spikes linked to 2024 flood-related crop losses and re- regional market, where Mali has faced a surge in interest rates, ex- stricted access due to insecurity. In some areas, famine condi- ceeding 9 percent for 12-month bills. Debt roll-over is high, which tions are likely to emerge. poses some risk, but current conditions support a moderate rating for debt distress. Downside risks to the outlook include a persisting electricity crisis, rising insecurity and climatic shocks. Substantial financing needs and elevated borrowing costs could lead to reductions in growth- Outlook enhancing investments amid demands for security spending. Con- tinued disputes with international mining firms and additional tax Real GDP growth is projected to average 4.8 percent over exemptions could affect tax revenues. On the upside, the sustain- 2025–2026, supported by new lithium production, higher gold able resolution of the electricity crisis and improved regional re- prices, agriculture, and telecommunication services. This assumes lations could ease market uncertainty and support investment. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 3.5 3.5 4.0 4.8 4.8 4.7 Private consumption 4.0 3.9 4.0 4.0 4.1 4.1 Government consumption 7.6 16.7 -2.2 6.6 5.0 4.7 Gross fixed capital investment 1.0 -3.6 10.1 1.2 7.3 6.2 Exports, goods and services 18.1 -3.9 2.7 10.3 4.8 4.1 Imports, goods and services 0.7 2.3 3.9 5.0 5.1 4.1 Real GDP growth, at constant factor prices 4.3 3.4 4.0 4.8 4.8 4.7 Agriculture 2.4 2.3 4.5 4.7 4.7 4.8 Industry 3.7 2.0 -1.0 2.0 2.5 3.5 Services 5.8 4.9 5.6 5.9 5.7 5.0 Employment rate (% of working-age population, 15 years+) 64.6 64.8 64.8 64.8 64.8 64.8 Inflation (consumer price index) 9.7 2.1 3.2 2.6 2.3 1.9 Current account balance (% of GDP) -7.0 -7.2 -6.3 -4.6 -4.0 -3.0 Net foreign direct investment inflow (% of GDP) 2.6 2.5 2.7 2.7 2.8 2.8 Fiscal balance (% of GDP) -4.8 -3.9 -2.9 -2.7 -2.5 -2.6 Revenues (% of GDP) 19.8 23.6 23.8 24.3 24.0 24.0 Debt (% of GDP) 51.8 53.3 52.6 52.6 51.9 51.3 Primary balance (% of GDP) -3.4 -2.2 -0.9 -1.0 -0.9 -1.0 1,2 International poverty rate ($2.15 in 2017 PPP) 20.7 21.5 21.1 20.7 19.8 18.7 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 55.9 58.3 57.2 56.3 55.3 53.8 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 85.5 87.2 86.4 86.0 85.4 84.5 GHG emissions growth (mtCO2e) 4.6 3.0 4.0 4.9 5.4 5.5 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2021-EHCVM. Actual data: 2021. Nowcast: 2022-2024. Forecasts are from 2025 to 2027. 2/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 57 This outlook reflects information available as of April 10, 2025. 1 2 MAURITANIA Population Poverty million millions living on less than $3.65/day 5.2 1.2 3 4 Life expectancy at birth School enrollment Growth slowed to 5.2 percent in 2024 due to weaker public years primary (% gross) consumption and extractives production. Inflation eased and the fiscal deficit narrowed. Poverty incidence remained at 28.4 64.7 111.8 5 6 percent. Gas production should boost exports and revenues, GDP GDP per capita but outlook risks include regional instability, climate shocks current US$, billion current US$ and weaker global demand due to trade policy uncertainty. Resilience-enhancing reforms and prudent fiscal policies are 10.6 2053.7 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2019 (2017 PPPs). 3/ 2022. required to sustain growth and accelerate poverty reduction. 4/ 2023. 5/ 2024. 6/ 2024. long-term sustainability. Crucial reforms to enable this transition Key conditions and challenges should focus on improving productivity, fostering economic di- versification and promoting inclusive job creation at scale. With- Despite an unfavorable global economic and geopolitical envi- out addressing these challenges, Mauritania risks entrenching its ronment and recurrent climate shocks, Mauritania has main- overreliance on extractives, hindering its broader development. tained robust economic performance. Growth averaged 3.4 per- cent in 2020-2023, the fiscal deficit and the current account Food price instability and low agricultural productivity affect deficit (CAD) narrowed, while the risk of debt distress improved mostly the poor, as food represents 58 percent of their consump- from high to moderate. However, structural weaknesses persist tion and over half of them rely on income from low-productivity due to Mauritania’s dependence on extractives, low investment agriculture activities. implementation capacity, business environment challenges, cli- mate vulnerability and repercussions of regional conflicts, includ- ing refugee inflows. Recent developments If well managed, Mauritania's natural resource wealth, including Economic growth moderated to 5.2 percent in 2024 (2.2 percent iron ore, gold, crude oil and copper, combined with the beginning per capita), down from 6.5 percent in 2023 (3.4 percent per capita), of gas exports from the Greater Tortue Ahmeyim (GTA) project in as weaker public consumption and slower gold and iron ore pro- late 2024, could accelerate growth, improving public finances and duction offset robust export performance and resilient private con- enabling investment that would support the transition to a higher, sumption. Inflation eased to 1.5 percent (y/y) in December 2024 diversified growth path. compared to 1.6 percent (y/y) in 2023, driven by declining food and oil prices and supported by the Central Bank of Mauritania’s (BCM) This momentum should catalyze a transition toward higher- tight monetary policy stance. Throughout 2024, inflation remained value-added sectors, away from extractive-led growth to ensure within a 1.5-3 percent range, enabling the BCM to implement a FIGURE 1 / Evolution of main macroeconomic indicators FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent Percent of GDP Poverty rate (%) Real GDP per capita (constant LCU) 8 54 80 90000 52 70 80000 6 50 60 70000 4 60000 48 50 2 46 50000 40 40000 44 30 0 30000 42 20 20000 -2 40 10 10000 -4 38 0 0 2021 2022 2023 2024 2025 2026 2027 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 GDP growth (lhs) Primary balance (lhs) International poverty rate Lower middle-income pov. rate General government debt (rhs) Upper middle-income pov. rate Real GDP pc Source: World Bank. Source: World Bank. Notes: See footnotes in table on the next page. 58 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. 50-basis-point reduction in the policy rate to 7.25 percent in Octo- 2027, gas production from GTA and rebounding iron ore produc- ber 2024, the first cut since 2022. With lower food inflation but lim- tion from new sites should support a growth recovery to 5.4 per- ited growth in agriculture, poverty decreased slightly from 28.6 in cent. Weak agricultural sector performance and rising inflation may 2023 to 28.4 in 2024 (measured at US$3.65 per day in PPP 2017). result in a slight increase in poverty incidence to 28.6 percent by 2027, pushing an additional 137,000 people into poverty. Fiscal consolidation efforts yielded a narrowing of the fiscal deficit to 0.1 percent of GDP in 2024, compared to 2.4 percent in 2023, The fiscal deficit should grow to 1.4 percent of GDP in 2025, driven by higher revenue collection, reflecting tax measures in the driven by increased capital spending, before resuming the fiscal telecommunications sector and increased withholding taxes from consolidation path from 2026 onwards, supported by higher rev- extractives, alongside controlled recurrent expenditures. enues. Public debt is projected to stabilize at 44.6 percent of GDP by 2027, creating fiscal space for priority investments in in- The debt-to-GDP ratio declined to 44.0 percent in 2024, supported frastructure and social programs. Inflation should decline slightly by fiscal prudence, exchange rate stability, declining nominal exter- to 2.0 percent (y/y) in 2025, reflecting lower commodity prices, nal debt, and stronger nominal GDP growth, as Mauritania remains and average 3.5 percent in 2026-2027, driven by a more accom- at moderate risk of debt distress according to the December 2024 modative monetary policy. WB-IMF Debt Sustainability Analysis. The CAD should widen to 6.1 percent of GDP in 2025 due to lower The CAD narrowed in 2024 reaching 5.8 percent, driven by higher iron ore and gold exports, as trade policy uncertainty may reduce exports and lower hydrocarbons, capital goods and food imports. global demand and lower prices. The CAD is expected to improve Foreign exchange reserves rose slightly, covering 6.4 months of im- slightly in 2026-27 to an average of 5.8 percent of GDP, as global ports. The BCM effectively managed excess liquidity through a new conditions stabilize and iron ore production resumes. overnight deposit facility. The Ouguiya depreciated modestly by 0.8 percent against the US dollar, with reduced volatility, supported by Downside risks to the outlook remain significant. Deteriorating se- the launch of a foreign exchange platform in late 2023. curity in the Sahel could trigger refugee inflows and deter foreign direct investment (FDI). Climate-related shocks threaten agricultur- al productivity and infrastructure, exacerbating poverty and bal- Outlook ance-of-payments pressures. Escalating trade policy uncertainty could induce a sharper-than-expected global economic slowdown, The medium-term outlook is dampened by uncertainty in the glob- which would slow exports, investment, and aid. However, lower al economic environment. GDP growth should slow to 4.9 percent food and oil prices can reduce inflation and stimulate consump- in 2025 due to declining gold and iron ore production and lower tion, while GTA gas production and structural reforms could crowd commodity prices, as reserves deplete in major mining sites. By in FDI and stimulate growth. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 6.8 6.5 5.2 4.9 4.5 5.4 Private consumption 3.9 4.2 4.6 4.9 5.0 5.0 Government consumption 14.3 10.6 1.5 3.7 -2.0 4.1 Gross fixed capital investment 3.4 -15.3 6.4 2.6 9.3 1.8 Exports, goods and services 16.8 3.5 9.7 9.0 7.2 9.2 Imports, goods and services 15.3 -1.5 5.0 6.5 7.0 6.0 Real GDP growth, at constant factor prices 9.8 4.3 5.2 4.9 4.5 5.4 Agriculture 8.7 -1.0 1.5 1.6 1.6 1.6 Industry 12.5 5.8 3.0 6.3 5.7 6.4 Services 8.6 5.8 8.2 5.4 4.9 6.1 Inflation (consumer price index) 9.5 5.1 2.5 2.0 3.5 3.5 Current account balance (% of GDP) -14.9 -9.1 -5.8 -6.1 -6.0 -5.5 Net foreign direct investment inflow (% of GDP) -14.7 8.0 5.1 4.9 4.5 4.2 Fiscal balance (% of GDP) -3.8 -2.4 -0.1 -1.4 -1.3 -1.0 Revenues (% of GDP) 24.7 22.5 24.0 24.7 25.2 26.2 Debt (% of GDP) 48.5 46.4 44.0 44.8 45.2 44.6 Primary balance (% of GDP) -3.0 -1.4 0.9 -0.4 -0.2 0.1 1,2 International poverty rate ($2.15 in 2017 PPP) 6.2 6.4 6.5 6.6 6.8 7.2 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 28.1 28.6 28.4 27.6 28.1 28.6 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 69.7 70.1 69.4 67.7 67.7 67.8 GHG emissions growth (mtCO2e) 2.2 2.6 2.4 2.5 2.6 2.5 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2019-EPCV. Actual data: 2019. Nowcast: 2020-2024. Forecasts are from 2025 to 2027. 2/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 59 This outlook reflects information available as of April 10, 2025. 1 2 MAURITIUS Population Poverty million millions living on less than $6.85/day 1.3 0.2 3 4 Life expectancy at birth School enrollment Economic growth is estimated at 4.7 percent in 2024, dri- years primary (% gross) ven by the services sector, while inflation declined to 3.6 percent. Growth is forecasted to moderate to 3.2 percent 73.5 110.9 5 6 in 2025, amidst higher US trade tariffs and modest public GDP GDP per capita investment spending. The fiscal deficit is expected to ease current US$, billion current US$ to 5.4 percent of GDP, with public debt remaining elevat- ed at 87.5 percent of GDP. Poverty is projected to decline 14.8 11776.4 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2017 (2017 PPPs). 3/ 2022. to 7.2 percent by 2027. 4/ 2023. 5/ 2024. 6/ 2024. on public pensions and tax allowances are draining fiscal re- Key conditions and challenges sources, limiting the fiscal space. Mauritius, an archipelagic country with a population of 1.3 million, has transformed from a low-income mono-crop producer of sugar Recent developments cane to an upper-middle-income diversified economy – driven by tourism, fisheries, manufacturing, and financial services. Poverty The new government revised the 2022 and 2023 GDP in response is projected to have fallen to around 8 percent by 2025 (at the to heightened concern over past growth exaggerations. It also re- $6.85-a-day poverty line), after a considerable increase from 11 to vised 2024 real GDP growth from 6.5 percent to 4.7 percent based 16 percent during COVID-19 in 2020. on less optimistic public investment realizations. While these growth rates remain respectable, sectoral breakdown suggests fur- After the November 2024 general election, a new govern- ther weakening of Mauritius’ traditional growth drivers, agriculture ment introduced a plan to accelerate economic development and manufacturing. Meanwhile, thanks to a sustained tourism in- through diversifying growth sources, improving public sector flux and real estate investments, retail, transport, hospitality, and governance, and promoting climate sustainability. Mauritius financial services have become key in sustaining growth. faces structural challenges related to being an island state and its geographical position. This includes remoteness and Labor market conditions have improved, with the national unem- vulnerability to climate shocks, such as tropical cyclones and ployment rate declining to 5.9 percent by Q3 of 2024, 0.4 percent- prolonged periods of drought. Moreover, the rapidly aging age points lower than last year. Youth unemployment remained population and the mismatch between job aspirations and relatively unchanged at 17.6 percent, down 0.2 percentage points the skills available versus the labor market demands con- relative to the third quarter of 2023. Meanwhile, higher labor de- tribute to labor and skills shortages. The government also mand raised female labor participation by one percentage point to faces immediate macro-fiscal challenges. The commitments 48.6 percent in the same period. FIGURE 1 / Fiscal revenues, expenditure, and financing needs FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent of GDP Percent of GDP Poverty rate (%) Real GDP per capita (constant LCU) 40 12 25 600000 10 500000 30 20 8 400000 15 20 6 300000 4 10 10 200000 2 5 100000 0 0 2019 2020 2021 2022 2023 2024 0 0 Total revenues and grants (lhs) 2012 2014 2016 2018 2020 2022 2024 2026 Total expenditure (lhs) International poverty rate Lower middle-income pov. rate Total borrowing requirement (rhs) Upper middle-income pov. rate Real GDP pc Source: World Bank. Source: World Bank. Notes: See footnotes in table on the next page. 60 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. Stagnant export performance and strong import demand wors- remained elevated, reaching 87 percent of GDP by the end of 2024. ened the current account deficit to 4.9 percent of GDP. Mauritius’ Thus, an effective and gradual fiscal consolidation is needed. export performance has been declining, and renewal uncertainties of the US African Growth Opportunity Act further depressed orders of Mauritius garments and textiles. With international shipping lo- Outlook gistics performing behind the average upper-middle income coun- tries, Mauritius needs a more productive port sector to attract for- Real GDP growth is expected to moderate to 3.2 percent in 2025, eign investments and become more export competitive. Neverthe- reflecting a moderation in public investment and exports – the lat- less, external buffers remain adequate, with the Bank of Mauri- ter stemming from higher US import tariffs and its spillovers to tius’ (BOM) international reserves at USD 8.5 billion in January 2025, global economic growth. The reliance on imports is expected to equivalent to 13.3 months of import cover. sustain the current account deficit at an average of 4.0 percent of GDP in the medium term. Headline inflation is expected to mod- The BOM has taken a more independent policy stance to manage erate to 3.0 percent, backed by lower international commodity inflation and macroeconomic resilience. prices. A fiscal deficit of 5.4 percent of GDP is expected for 2025, with public debt remaining elevated at 87.5 percent of GDP. De- Headline inflation declined to 3.6 percent by the end of 2024, com- spite these challenges, the poverty rate is projected to fall to pared to 7.0 percent a year ago, mostly due to moderation in glob- around 7.2 percent by 2027, supported by public transfers averag- al commodity prices. However, rising service prices and additional ing 7.0 percent of GDP. wage bonuses have kept core inflation relatively sticky at 4.1 per- cent by the end of 2024. As such, BOM increased its key policy rate Risks are tilted to the downside. A further slowdown in global by 50 basis points to 4.5 percent in January 2025. BOM also reined economic activity can be detrimental to Mauritius’ tourism and fi- in disbursements by its investment vehicle, the Mauritius Invest- nancial services. Fiscal slippages can downgrade sovereign credit ment Corporation, to align with its monetary policy stance. ratings, negatively impacting public and private sector borrowing costs. Therefore, aside from fiscal consolidation, Mauritius needs Shortfalls in tax collection and sustained spending have stalled to generate growth by addressing bottlenecks in port logistics and fiscal consolidation, resulting in a primary deficit of 3.3 percent air connectivity, promoting deeper regional economic integration, of GDP and an overall fiscal deficit of 5.8 percent. As growth while attracting private investments in renewable energy and inno- weakened more than expected, income tax and VAT fell short of vative activities. Strengthening the integrity and standards in finan- budget plans by 10.3 percent and 6.8 percent. Also, additional cial services can further boost Mauritius’ reputation as an interna- public sector wage bonuses contributed to higher expenditure in tional financial center. Improving disaster preparedness and fiscal 2024, about 3.3 percent of the target. Consequently, public debt buffers will help cushion the impact of climate shocks. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f 1 Real GDP growth, at constant market prices 8.7 5.0 4.7 3.2 3.0 2.9 Private consumption 3.7 3.4 3.1 2.8 2.6 2.7 Government consumption 6.4 -3.2 6.3 8.3 2.6 4.0 Gross fixed capital investment 6.2 12.5 12.9 8.6 6.3 4.5 Exports, goods and services 41.6 -1.9 2.8 1.4 1.6 1.7 Imports, goods and services 10.4 4.2 5.4 5.0 2.5 2.6 Real GDP growth, at constant factor prices 9.7 4.9 4.6 3.2 3.0 2.9 Agriculture 5.5 13.9 5.9 3.2 2.3 2.4 Industry 6.8 6.7 8.1 3.8 2.8 2.8 Services 10.7 4.0 3.6 3.0 3.0 3.0 Employment rate (% of working-age population, 15 years+) 51.7 52.8 52.8 52.8 52.9 53.0 Inflation (consumer price index) 10.8 7.0 3.6 3.0 2.9 2.9 Current account balance (% of GDP) -11.1 -4.6 -4.9 -4.1 -4.1 -3.8 Net foreign direct investment inflow (% of GDP) -72.4 -3.0 -2.0 -1.5 -1.5 -1.4 2 Fiscal balance (% of GDP) -5.7 -5.7 -5.9 -5.4 -5.5 -5.4 Revenues (% of GDP) 25.4 24.5 24.7 26.9 26.3 26.6 2 Debt (% of GDP) 83.3 87.8 88.3 87.5 87.6 87.7 2 Primary balance (% of GDP) -3.2 -3.1 -3.4 -2.8 -3.1 -3.0 3,4 International poverty rate ($2.15 in 2017 PPP) 0.1 0.1 0.1 0.1 0.0 0.0 3,4 Lower middle-income poverty rate ($3.65 in 2017 PPP) 1.7 1.4 1.2 1.0 0.8 0.7 3,4 Upper middle-income poverty rate ($6.85 in 2017 PPP) 12.7 10.9 9.5 8.8 7.9 7.2 GHG emissions growth (mtCO2e) 4.7 2.8 2.8 0.5 2.0 2.0 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Historical demand-side data is being revised due to a consistency problem. 2/ Fiscal balances are reported in fiscal years (July 1st - June 30th). For the purpose of this report, the fiscal year data has been converted to calendar year data. 3/ Calculations based on 2017-HBS. Actual data: 2017. Nowcast: 2018-2024. Forecasts are from 2025 to 2027. 4/ Projection using neutral distribution (2017) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU. Macro Poverty Outlook / April 2025 61 This outlook reflects information available as of April 10, 2025. 1 2 MOZAMBIQUE Population Poverty million millions living on less than $2.15/day 34.6 22.3 3 4 Life expectancy at birth School enrollment years primary (% gross) Economic growth slowed to 1.8 percent in 2024, partly due to the post-electoral unrest. Liquidity pressures worsened, 59.6 120.0 5 6 driven by a large wage bill and high domestic debt service. GDP GDP per capita GDP growth in 2025 is projected at 3 percent, with the inter- current US$, billion current US$ national poverty rate remaining around 75 percent. Risks to the outlook include further social unrest, limited fiscal con- 22.4 646.8 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2019 (2017 PPPs). 3/ 2022. solidation, global market volatility, and natural hazards. 4/ 2023. 5/ 2024. 6/ 2024. Poverty is estimated to affect about 75 percent of the total popu- Key conditions and challenges lation in 2025 (at the $2.15-a-day poverty line). Inequality is wide- spread, particularly between urban and rural areas, where access The economy has faced persistent challenges since 2015, in- to basic services is limited. The rural population is vulnerable to cluding the hidden debt crisis, cyclones, COVID-19, an ongo- environmental shocks and structural barriers, that hinder poverty ing conflict in the north, and the recent post-electoral unrest. reduction and inclusive growth. Growth remains fragile, heavily reliant on extractives. Real gross national income (GNI) per capita declined by 9 percent between 2016 and 2023. Recent developments Agriculture employs over 70 percent of the population but GDP growth decelerated to 1.8 percent in 2024, down from 5.4 per- struggles with low productivity, climate change-related vulner- cent in 2023, mainly due to post-election disruptions in Q4 2024. abilities, and insufficient investment in infrastructure and in- Heavy rains affected agricultural output, while a slowdown in the puts. Rural poverty remains entrenched, and the informal sec- extractive sector further dampened economic activity. The Coral tor dominates the labor market, accounting for over 80 per- South LNG project reached full capacity in 2023, contributing less cent of employment. Widespread informality, week infrastruc- to growth in 2024. The poverty rate has remained stagnant at ture, and business constraints limits productivity growth and about 75 percent since 2020 due to weak labor-intensive growth. domestic revenue mobilization. Inflation further eased to 3.2 percent in 2024, from 7.1 percent Fiscal pressures have intensified, placing Mozambique at a critical in 2023 and 10.3 percent in 2022 supported by lower global oil juncture. The wage bill and interest payments absorbed 92 percent and food prices, a stable exchange rate, and the Central Bank's of tax revenues in 2024, leaving limited resources for critical public tight monetary policy. The Central Bank started loosening mon- investments in education, healthcare, and infrastructure. etary policy in 2024, reducing the benchmark interest rate from FIGURE 1 / Real GDP growth and sectoral contributions to real FIGURE 2 / Actual and projected poverty rates and real GDP per GDP growth capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 6 100 35000 5 90 30000 80 4 70 25000 3 60 20000 2 50 40 15000 1 30 10000 0 20 5000 -1 10 2021 2022 2023 2024f 2025f 2026f 2027f 0 0 Agriculture Extractive industry 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 Non-extractive industry Services International poverty rate Lower middle-income pov. rate GDP growth Upper middle-income pov. rate Real GDP pc Sources: National Bureau of Statistics and World Bank estimates Source: World Bank. Notes: See footnotes in table on the next page. 62 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. 17.25 percent in January 2024 to 12.25 percent in February 2025, While no change in poverty is expected in 2025, the number of and lowering reserve requirement rates for local currency from people living in poverty is projected to rise by 0.8 million this 39 percent to 29 percent in January 2025. year alone due to rapid population growth. The current account deficit decreased marginally from 13 per- The current account deficit is expected to stabilize at 12 percent of cent to 12 percent of GDP between 2023 and 2024. The trade GDP between 2025–2027, with higher exports of coal and gas offset balance improved, with reductions in both exports and imports. by a recovery of imports of capital goods linked to megaprojects, Foreign Reserves recovered to US$ 3.7 billion (equivalent to five as the construction of the TotalEnergies LNG project is expected to months of imports, excluding mega projects), bolstered by a sta- resume. It is expected to be financed primarily through a combi- ble exchange rate and higher reserve requirements in foreign nation of FDI inflows related to these megaprojects and potential currency in 2024. drawdowns on foreign exchange reserves. The fiscal deficit rose from 2.8 percent of GDP in 2023 to 5.5 per- The fiscal deficit is expected to narrow to 3.6 percent of GDP in cent in 2024. Public debt increased slightly to 94.2 percent of GDP 2025, and it could decline further contingent on the successful im- by year-end. Revenues fell due to reduced economic activity, while plementation of fiscal consolidation measures. Potential reforms expenditures grew during presidential elections, leading to higher include containing the wage bill (through a nominal freeze on domestic borrowing and increased liquidity pressures. salaries, stricter hiring ceilings, overtime, and allowance controls), and enhancing domestic revenue mobilization by eliminating costly tax expenditures and improving tax compliance. Public Outlook debt is projected to gradually increase over the medium term dri- ven by domestic debt. Real GDP growth is projected to reach 3.0 percent in 2025 and to gradually increase to 3.5 percent by 2027 driven by the The outlook faces risks from social unrest, extreme climate events, recovery of agriculture production and a rebound of services, delays in LNG projects, a deteriorating security situation in the the sector most affected by the post-election disruptions. In- North, fiscal consolidation challenges, and heightened global un- flation is expected to increase to 5.5 percent in 2025, amid certainty. US reciprocal tariffs and a subsequent global slowdown higher food prices, and to stabilize at around 4.5 percent dur- could affect Mozambique's exports and foreign investment, partic- ing 2026–2027, supported by favorable global price conditions. ularly in agriculture and extractives. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 4.4 5.4 1.8 3.0 3.5 3.5 Private consumption 7.2 9.1 -6.0 3.9 5.4 3.0 Government consumption 5.1 6.7 -5.4 -4.7 -5.5 -3.9 Gross fixed capital investment 23.8 -43.0 26.7 6.3 7.4 10.5 Exports, goods and services 26.5 -5.3 -3.0 2.0 3.0 3.0 Imports, goods and services 30.9 -25.2 -1.5 3.0 5.0 5.0 Real GDP growth, at constant factor prices 4.5 6.0 1.8 3.0 3.5 3.5 Agriculture 5.5 3.8 1.9 2.4 4.2 4.3 Industry 4.6 13.8 3.0 2.7 4.1 4.1 Services 3.7 3.1 0.9 3.6 2.7 2.6 Employment rate (% of working-age population, 15 years+) 75.9 76.1 76.2 76.4 76.5 76.7 Inflation (consumer price index) 10.3 7.1 3.2 5.5 4.5 4.5 Current account balance (% of GDP) -36.4 -11.6 -11.3 -12.0 -11.9 -12.3 Net foreign direct investment inflow (% of GDP) 13.0 12.0 15.9 11.6 14.0 11.0 1 Fiscal balance (% of GDP) -4.0 -2.8 -5.5 -3.6 -2.6 -2.4 Revenues (% of GDP) 27.8 28.5 27.4 27.4 28.0 28.3 Debt (% of GDP) 96.8 93.9 94.2 96.8 99.4 101.8 1 Primary balance (% of GDP) -1.0 1.1 -1.5 0.8 2.0 2.6 2,3 International poverty rate ($2.15 in 2017 PPP) 75.7 75.0 75.3 75.3 75.1 74.9 2,3 Lower middle-income poverty rate ($3.65 in 2017 PPP) 89.1 88.8 89.0 89.0 88.9 88.8 2,3 Upper middle-income poverty rate ($6.85 in 2017 PPP) 96.4 96.2 96.3 96.3 96.2 96.2 GHG emissions growth (mtCO2e) 1.6 0.9 1.0 1.0 1.1 1.1 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Figure includes once-off capital gains revenues in 2017, estimated at 2.7 percent of GDP. 2/ Calculations based on 2019-IOF. Actual data: 2019. Nowcast: 2020-2024. Forecasts are from 2025 to 2027. 3/ Projection using neutral distribution (2019) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU. Macro Poverty Outlook / April 2025 63 This outlook reflects information available as of April 10, 2025. 1 2 NAMIBIA Population Poverty million millions living on less than $2.15/day 3.0 0.4 3 4 Life expectancy at birth School enrollment GDP growth is projected to weaken to 2.9 percent in 2025, years primary (% gross) reflecting deterioration in the global outlook and heightened uncertainty weighing on FDI prospects. Lower SACU receipts 58.1 133.5 5 6 are expected to negatively affect both fiscal and external ac- GDP GDP per capita counts in 2025, but financing is expected to remain ade- current US$, billion current US$ quate. With lower growth and high unemployment, poverty is expected to remain high at 19.7 percent in 2025, based on 13.4 4414.6 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2015 (2017 PPPs). 3/ 2022. the international poverty line. 4/ 2022. 5/ 2024. 6/ 2024. Recently published census data highlights that despite some Key conditions and challenges progress since independence, socio-economic challenges remain significant. Growth is insufficient to generate significant job gains Since gaining independence in 1990, Namibia experienced and reduce poverty. Only 547,000 people are employed (excluding steady GDP growth, averaging 4.3 percent up to 2015. This own-use production work) out of a working-age population of 1.87 growth was driven by structural and cyclical factors, including million. Unemployment, at 36.9 percent, exacerbated by skills sound macroeconomic management, capital deepening, and shortages, and inequality (Gini index at 59.1) are among the highest spillovers from the commodity super cycle. Resource wealth in the world. The 2023 census found Namibia's population to be was utilized to enhance access to public services, such as about 15 percent larger, with negative implications for income per health and education, and expand social protection, contribut- capita (Figure 1). The evolving trade policy changes and related ing to poverty reduction. Based on the international poverty uncertainty add to preexisting domestic challenges. This backdrop line of $2.15 per day (in 2017 purchasing power parity [PPP] underscores the need for policies that promote faster and more prices), the poverty rate decreased from 35.9 percent in 2003/ inclusive growth, supported by an agenda to improve skills, boost 04 to 15.6 percent in 2015/16. productivity, and encourage more private sector investment. Since 2016, Namibia's economic performance has been uneven, characterized by recession up to 2020 due to recurrent drought, Recent developments the pandemic shock, and declining investment. The rebound from the COVID-19 pandemic was weak and primarily led by the mineral GDP growth is estimated to have slowed to 3.7 percent in 2024, sector that benefited from renewed foreign direct investment (FDI) due to a decline in mining activities, severe drought and weak and favorable commodity prices. GDP is now above pre-COVID lev- demand for diamonds. As diamond production decreased and els, but output in some sectors is still lower. Real per capita income oil exploration activities slowed, non-mining sectors underpinned remains below its 2015 peak. economic growth, especially financial services, transport, and retail FIGURE 1 / Higher population data have reduced measures of per FIGURE 2 / Actual and projected poverty rates and real GDP per capita income capita Real GDP per capita, N$ Poverty rate (%) Real GDP per capita (constant LCU) 70000 80 70000 65000 70 60000 60 60000 50000 50 55000 40000 40 50000 30000 30 45000 20000 20 10 10000 40000 0 0 35000 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 1992 1996 2000 2004 2008 2012 2016 2020 2024 e International poverty rate Lower middle-income pov. rate Based on old population estimate Based on new population Upper middle-income pov. rate Real GDP pc Sources: WDI and World Bank staff estimates. Source: World Bank. Notes: See footnotes in table on the next page. 64 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. trade. Private consumption was firm, supported by a decline in in- environment could negatively affect planned large energy invest- flation to an average of 4.2 percent. Investment contracted from a ment projects, still at feasibility stage. Moderate food prices and high base in 2023 while net exports remained negative. lower fuel prices are expected to keep headline inflation contained at 4.2 percent in 2025. Given weaker growth prospects and elevat- Namibia's twin external and fiscal deficits deteriorated in 2024 but ed unemployment, poverty is expected to remain high at 19.7 per- remained adequately financed. The current account deficit (CAD) cent (around 609,000 people) in 2025 under the $2.15 per day in- increased to about 15.3 percent of GDP mainly driven by higher ternational poverty line (2017 PPP). consumer goods and FDI-related imports. The fiscal balance widened to 3.9 percent of GDP partly due to a larger wage bill, Southern African Customs Union (SACU) revenues are set to de- spending on drought relief measures, and transfers to state-owned cline in 2025,impacting fiscal and external accounts. The fiscal entities (SOE). The public debt ratio (including SOE guarantees) in- deficit is expected to worsen to 5.0 percent of GDP, owing also creased slightly to 70.3 percent of GDP. to lower nontax receipts, not fully compensated by spending re- trenchment after one-off expenditures in 2024/25, including on The Bank of Namibia reduced rates by a cumulative 100 basis points, SOE tax liabilities. High debt service payments and a large public broadly aligning with the stance of the South African Reserve Bank wage bill further limit fiscal space. With the projected GDP growth (SARB). However, the BoN’s policy rate is 75-basis points lower. and use of savings to retire part of the $750 million Eurobond due in October 2025, the debt ratio is expected to decline over the medium term. The large CAD will likely be mainly funded by FDI. Outlook Risks to the outlook are significant. Escalation in trade tensions With a deteriorated global outlook, Namibia's GDP growth is ex- could further diminish growth prospects, put additional downward pected to decline to 2.9 percent in 2025 and average 3.5 percent in pressure on commodity prices and worsen socio-economic chal- the medium term. Uncertainties have increased given potential di- lenges. Uncertainties regarding oil development persist despite re- rect and indirect effects from a weaker global environment. While cent discoveries while climate shocks remain an ongoing risk. Fiscal higher tariffs in US market are expected to have limited direct im- policy is expected to focus on curbing expenditure to support re- pacts as exports to the US account for 3 percent of Namibia’s total duction of the debt ratio in the medium term. Strengthening pri- exports, indirect impacts could be higher as commodity prices de- vate sector investment and closing gaps in education remain cru- cline and global demand wanes. Furthermore, the uncertain global cial for the country’s prosperity. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 5.4 4.4 3.7 2.9 3.4 3.5 Private consumption 9.5 4.7 13.3 4.8 5.2 5.2 Government consumption 0.6 1.3 3.2 1.2 0.7 0.6 Gross fixed capital investment 9.9 68.9 -7.9 3.6 7.9 8.5 Exports, goods and services 23.2 13.3 0.1 -1.6 4.0 4.7 Imports, goods and services 23.0 22.5 7.9 2.5 6.0 6.5 Real GDP growth, at constant factor prices 4.6 4.3 3.2 2.9 3.4 3.5 Agriculture 1.7 -3.2 -2.7 2.8 1.5 1.5 Industry 11.3 9.6 1.0 0.4 3.6 4.0 Services 2.2 3.0 5.0 4.0 3.6 3.6 Employment rate (% of working-age population, 15 years+) 46.6 46.5 46.6 46.1 46.1 46.1 Inflation (consumer price index) 6.1 5.9 4.2 4.2 4.6 4.6 Current account balance (% of GDP) -12.7 -15.3 -15.3 -14.9 -15.4 -15.6 Net foreign direct investment inflow (% of GDP) 8.4 21.1 15.1 8.1 10.2 12.7 Fiscal balance (% of GDP) -5.1 -2.4 -3.9 -5.0 -4.3 -4.2 Revenues (% of GDP) 30.4 35.0 36.5 33.9 33.9 33.7 1 Debt (% of GDP) 71.7 69.4 70.3 68.5 68.1 67.5 Primary balance (% of GDP) -0.7 3.0 1.3 0.2 0.6 0.6 2,3 International poverty rate ($2.15 in 2017 PPP) 20.7 20.3 19.9 19.7 19.2 18.8 2,3 Lower middle-income poverty rate ($3.65 in 2017 PPP) 39.4 38.8 38.3 38.0 37.4 36.9 2,3 Upper middle-income poverty rate ($6.85 in 2017 PPP) 63.3 62.8 62.5 62.3 61.8 61.4 GHG emissions growth (mtCO2e) 2.7 1.1 2.8 4.2 3.6 3.6 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Refers to Public and Publicly Guaranteed debt. 2/ Calculations based on 2015-NHIES. Actual data: 2015. Nowcast: 2016-2024. Forecasts are from 2025 to 2027. 3/ Projection using neutral distribution (2015) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU. Macro Poverty Outlook / April 2025 65 This outlook reflects information available as of April 10, 2025. 1 2 NIGER Population Poverty million millions living on less than $2.15/day 27.0 12.4 3 4 Life expectancy at birth School enrollment In 2024, GDP growth is estimated at 8.4 percent (4.9 per- years primary (% gross) cent per capita) driven by oil exports and agriculture. Despite 9.1 percent inflation, extreme poverty rate was 62.1 68.5 5 6 reduced by 2.5 points due to robust agricultural growth. GDP GDP per capita Debt sustainability was downgraded to high risk due to current US$, billion current US$ weak revenue mobilization and arrears. In 2025 growth is projected at 7.1 percent, with oil production reaching 28 19.7 727.9 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2021 (2017 PPPs). 3/ 2022. million barrels, but risks remain. 4/ 2023. 5/ 2024. 6/ 2024. Following the completion of the Niger-Benin pipeline, large-scale oil Key conditions and challenges export began in May 2024. Total crude oil production is projected to increase from about 15,000 to 107,000 barrels per day by 2025, Niger’s economy relies heavily on agriculture, making it vulnerable significantly boosting oil exports, revenues, and GDP. However, as to climate shocks. With low productivity and high population of March 2025, Niger’s land border with Benin remains closed, with growth, around half of the population lives in extreme poverty. Nigerien authorities citing security concerns. Niger’s relative stability in the Sahel changed with the military coup The humanitarian situation has remained precarious, with heavy on July 26, 2023. It triggered economic and financial sanctions by rains in July and August 2024 causing floods in parts of the country, the Economic Community of West African States (ECOWAS) and the affecting over 160,000 households (1.2 million people). An estimat- West African Economic and Monetary Union (WAEMU) for nearly ed 1.5 million people (5.6 percent of population) were facing food seven months and a pause in development assistance. insecurity in December 2024. On January 29, 2025, Niger formally exited ECOWAS along with Burkina Faso and Mali, following a joint withdrawal announce- Recent developments ment in January 2024 and unsuccessful mediation efforts. The three countries, forming the Confederation of Sahel States GDP growth increased from 2.0 percent in 2023 to 8.4 percent (AES), have replaced the ECOWAS passport with their own in 2024 (4.9 percent per capita), following the lifting of sanctions unified passport. However, Nigerien citizens and businesses and driven by a 48.5 percent rise in (mainly oil) exports. As a retain access to key ECOWAS membership benefits, including result, the current account deficit as a share of GDP declined the free movement of people and goods, pending further from 9.3 to 6.2 percent. Agriculture was the main growth driver decisions. The authorities have reiterated Niger’s intention on the supply side (+11.1 percent) due to a good season follow- to remain in WAEMU. ing a year of inadequate rainfall, pests, and insecurity. Industrial FIGURE 1 / Real GDP growth and demand-side contributions to FIGURE 2 / Actual and projected poverty rates and real GDP per real GDP growth capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 15 100 400000 90 350000 10 80 300000 70 5 250000 60 50 200000 0 40 150000 -5 30 100000 20 -10 10 50000 2022 2023 2024 2025 2026 2027 0 0 Gov. cons. Exports Investments 2022 2023 2024 2025 2026 2027 Inventories Private cons. Imports International poverty rate Lower middle-income pov. rate GDP Upper middle-income pov. rate Real GDP pc Source: World Bank staff estimates. Source: World Bank. Notes: See footnotes in table on the next page. 66 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. output grew by 12.1 percent due to oil production. Bank cus- tomers' reluctance to keep deposits due to sanctions, combined Outlook with government arrears on debts to bank-financed local suppli- ers, has heightened risks, with non-performing loans reaching 24 GDP growth is projected at 7.1 percent in 2025, assuming total percent and the solvency ratio falling from 20.5 percent to 9.8 domestic oil production reaches 28 million barrels. Inflationary percent by September 2024. pressures are expected to ease due to increased food supply fol- lowing a strong 2024 harvest. The fiscal deficit is expected to Headline inflation rose from 3.7 percent in 2023 to 9.1 percent in near the WAEMU target of 3 percent by 2027, as oil-driven rev- 2024, driven by higher food prices due to import disruptions and enues rise gradually despite lower prices stemming from global shortages caused by a deficit in cereal production in 2023. Despite trade uncertainty and expenditures remain contained. Growth is inflation, strong economic growth, particularly in agriculture, led to expected to slow in 2026-27 as oil production reaches full capac- a 2.5 percentage point decrease in the extreme poverty rate (at ity. The ECOWAS exit is not expected to have significant impacts $2.15 in 2017 PPP a day) in 2024, lifting over 270,000 people out of on the economy or prices. extreme poverty. The regional inflation rate is expected to align with the WAEMU target The WAEMU inflation rate declined further to 3.5 percent but re- band from 2025 onwards (for Niger from 2027), while regional re- mained above the 1–3 percent WAEMU target band. Regional for- serves are projected to rise to 5.4 months of imports in 2025, sup- eign reserves increased from 3.5 months of imports in 2023 to 4.7 ported by recovering exports, and lower Euro Area interest rates. months in 2024, reflecting the resumption of international bond issuances, IMF, and World Bank disbursements. The Central Bank Strong growth prospects are expected to gradually reduce the ex- of West African States kept its policy interest rates unchanged treme poverty rate to 36.2 percent by 2027, a 9.1 percentage point throughout 2024 at 3.5 percent for liquidity calls and 5.5 percent drop from 2024. This will decrease the number of people living in for the marginal lending facility. extreme poverty by nearly 1.5 million. However, 2.2 million people (8.1 percent of the population) are projected to face severe food in- The fiscal deficit narrowed to 4.3 percent of GDP due to drastic security between June and August 2025, particularly in the regions cuts in expenditures in response to lower grants and custom-relat- of Maradi and Dosso. ed revenues, and the spike of nominal GDP. Debt service reached over 34 percent of domestic revenues and nearly 20 percent of to- Downside risks to the outlook include climate, insecurity and oil tal expenditure by the end of December 2024. As a result, the joint price shocks. A materialization of banking sector risks could under- Bank-Fund Debt Sustainability Analysis in January 2025 assessed mine private investment. Upside risks include higher oil production the overall risk of debt distress to be high, primarily due to external for exports and an earlier than expected re-opening of the Niger- debt service-to-revenue ratio projections breaching the threshold. Benin border. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 11.5 2.0 8.4 7.1 5.1 4.5 Private consumption 7.0 3.5 3.1 3.3 4.1 4.5 Government consumption -1.2 -7.0 -0.3 7.0 7.0 3.0 Gross fixed capital investment 21.1 -10.4 -0.9 -3.5 2.7 2.3 Exports, goods and services 14.4 -8.1 48.5 42.5 11.2 8.5 Imports, goods and services 6.5 -12.0 -2.0 4.2 5.3 4.1 Real GDP growth, at constant factor prices 11.6 2.1 8.4 7.1 5.1 4.5 Agriculture 27.0 3.1 11.1 5.7 9.2 4.8 Industry -0.9 3.9 12.1 8.5 3.3 3.4 Services 4.9 0.1 3.3 8.0 1.3 4.9 Employment rate (% of working-age population, 15 years+) 72.9 73.1 73.1 73.1 73.1 73.1 Inflation (consumer price index) 3.9 3.7 9.1 5.3 4.7 3.0 Current account balance (% of GDP) -9.8 -9.3 -6.2 -3.9 -4.2 -4.5 Net foreign direct investment inflow (% of GDP) 3.9 3.2 1.5 1.7 1.7 1.6 Fiscal balance (% of GDP) -6.8 -4.4 -4.3 -3.9 -3.4 -3.2 Revenues (% of GDP) 14.9 11.6 9.3 10.5 11.2 10.8 Debt (% of GDP) 51.7 54.7 47.6 44.5 43.0 41.9 Primary balance (% of GDP) -5.8 -3.2 -2.6 -2.7 -2.3 -2.3 1,2 International poverty rate ($2.15 in 2017 PPP) 48.1 47.8 45.3 40.6 38.2 35.8 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 81.7 81.5 80.4 77.4 76.2 74.3 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 95.5 95.4 95.3 94.0 93.8 93.4 GHG emissions growth (mtCO2e) 5.0 4.0 4.9 4.9 4.8 4.7 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2021-EHCVM. Actual data: 2021. Nowcast: 2022-2024. Forecasts are from 2025 to 2027. 2/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 67 This outlook reflects information available as of April 10, 2025. 1 2 NIGERIA Population Poverty million millions living on less than $3.65/day 232.7 130.1 3 4 Life expectancy at birth School enrollment Macroeconomic reforms started stabilizing the economy. years primary (% gross) Inflation remains elevated with tight monetary policy sup- porting a gradual easing. The fiscal position improved due to 53.6 86.7 5 6 a revenue surge largely from the implicit FX subsidy removal. GDP GDP per capita Global economic uncertainty poses a major risk, potentially current US$, billion current US$ impacting fiscal and external balances through lower oil prices and tighter financial conditions. Double-digit inflation 186.2 800.4 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2018 (2017 PPPs). 3/ 2022. continues to affect poverty, which begins stabilizing in 2026. 4/ 2021. 5/ 2024. 6/ 2024. Key conditions and challenges Recent developments The economy has become more resilient as the government con- Nigeria's economic growth has remained moderate, but re- tinues to stay the course on a broadly appropriate macroeconomic silient. Real GDP grew by 3.4 percent in 2024, up from 2.7 policy mix, amid pressing social and humanitarian challenges. percent in 2023, primarily driven by financial and telecommu- Macroeconomic reforms have helped eliminate unsustainable dis- nication services, a continued rebound in oil production, and a tortions and correct course. A unified and market-reflective ex- recovery in transportation. change rate has made the naira competitive, orthodox monetary policy has improved FX liquidity and reduced volatility, and remov- Inflation, especially food, remained high in 2024 but monetary pol- ing FX and Premium Motor Spirit (PMS) subsidies has started to re- icy remained tight supporting a gradual easing. The policy rate was open fiscal space for increased social and capital spending. retained at 27.5 percent in February 2025, a rise of 875 basis points since January 2024. Although headline inflation peaked in 2024, it is The recent bold reforms have enabled Nigeria to avoid a macro- expected to go down in 2025. Labor incomes have not kept up with fiscal crisis. Sustaining the macroeconomic reforms and pursuing inflation, pushing another 10 million Nigerians into poverty such structural reforms are essential to unlock Nigeria’s growth poten- that nearly half of all Nigerians (46 percent measured at the inter- tial. To accelerate and sustain progress, addressing structural bot- national poverty line of US$ 2.15 based on the 2017 PPPs) lived in tlenecks is crucial. Key priorities include strengthening governance, poverty in 2024. improving infrastructure, expanding access to electricity and digital connectivity, enhancing security, reducing trade barriers, and in- A surge in revenues improved the fiscal position at both the Fed- vesting in human capital development. This should be accompa- eral and State levels. In 2024, the consolidated government fiscal nied by robust social protection measures to protect the popula- deficit narrowed to 3.5 percent of GDP, down from 5.4 percent in tion—especially the poorest—against shocks. 2023. This largely reflected the removal of the implicit FX subsidy, FIGURE 1 / Revenues, expenditures, and deficit FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent of GDP Percent of GDP Poverty rate (%) Real GDP per capita (constant LCU) 18 0 100 380000 16 90 370000 -1 14 80 360000 -2 70 12 60 350000 10 -3 50 340000 8 -4 40 330000 6 30 -5 320000 4 20 -6 10 310000 2 0 -7 0 300000 2011 2013 2015 2017 2019 2021 2023 2025 2027 2010 2012 2014 2016 2018 2020 2022 2024 2026 International poverty rate Lower middle-income pov. rate Budget deficit Revenues Expenditures Upper middle-income pov. rate Real GDP pc Sources: Nigerian National Bureau of Statistics, WDI, and World Bank. Source: World Bank. Notes: See footnotes in table on the next page. 68 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. improved tax administration, increased remittances from govern- expected in 2025 before starting to stabilize in 2026. Reforms to ment-owned enterprises and higher internally generated revenues protect the poorest against inflation and to boost livelihoods of all at the state level. Deficit monetization stopped. Public and publicly Nigerians through more productive work are key to reverse high guaranteed debt stood at 53.3 percent in 2024, compared to 45 levels of poverty. With inflation remaining elevated, a tight mon- percent in 2023, mainly due to FX valuation effects. etary policy stance must persist while avoiding any recourse to deficit monetization. The current account surplus experienced a significant increase in 2024 following the depreciation of the naira. Imports of both oil The fiscal outlook remains positive, with rising nominal revenues and non-oil goods declined, while worker remittances increased and supported by ongoing reforms such as domestic revenue mo- due to the FX unification. Financial inflows were supported by for- bilization. The fiscal gains from the PMS subsidy removal can fur- eign portfolio investment, whilst foreign direct investment re- ther generate fiscal space allowing the government to scale up so- mained low. Gross external reserves remain on an overall upward cial and capital spending while keeping debt on a sustainable path. trend standing at US$ 38.4 billion in February 2025 from US$ 32.9 The fiscal deficit is estimated to narrow to 3.4 percent of GDP by billion in December 2023. 2027. Despite Nigeria’s rising debt to GDP ratio, the overall debt burden remains at moderate levels thanks to the lower debt ser- vice to revenue ratio. Outlook The external balance is expected to maintain a surplus in the medi- Economic activity is expected to grow moderately in the medium um term, standing at 8.9 percent in 2027. The surplus on the bal- term, driven by the services sector. GDP growth is projected to av- ance of payments is expected to be supported by a pick-up in non- erage 3.6 percent between 2025 and 2027, with per capita growth oil agriculture exports and a slowdown in PMS imports, as remit- expected to be around 1.1 percent. Agricultural output is estimated tance inflows are expected to grow modestly. to increase modestly, while the industrial sector is projected to re- main constrained by sluggish crude oil production and structural Risks to the outlook are largely tilted to the downside. Do- bottlenecks such as energy constraints. The services sector, espe- mestically, these include social risks that could impede reform cially financial, and information and communication technology, progress, adverse weather, insecurity in farming areas, higher im- services, will continue to drive growth. port costs for inputs, naira depreciation, and declining oil pro- duction. Globally, heightened uncertainty could sharply lower oil Inflation is expected to moderate but remain high from an average prices and accordingly oil exports and revenues as well as tighten of around 22.1 percent in 2025 tapering to about 15.9 percent in financial conditions. However, a flexible naira could help offset 2027. Consequently, a further increase in poverty to 50 percent is some of these impacts. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 3.3 2.9 3.4 3.6 3.7 3.8 Real GDP growth, at constant factor prices 3.1 2.7 3.4 3.5 3.6 3.7 Agriculture 1.9 1.1 1.2 1.6 1.8 2.1 Industry -4.6 0.7 2.4 2.4 1.9 1.8 Services 6.7 4.2 4.7 4.7 4.9 4.9 1 Inflation (consumer price index) 12.2 17.9 26.6 22.1 18.5 15.9 Current account balance (% of GDP) 0.7 1.6 9.2 7.3 9.4 8.9 Net foreign direct investment inflow (% of GDP) 0.2 -0.6 -0.8 -0.8 -0.6 -0.7 2 Fiscal balance (% of GDP) -4.4 -5.4 -3.5 -4.8 -3.7 -3.4 3 Debt (% of GDP) 35.0 45.0 53.3 55.5 54.7 53.5 Primary balance (% of GDP) -1.4 -2.0 -0.2 -1.1 -0.1 -0.4 4,5 International poverty rate ($2.15 in 2017 PPP) 39.6 41.6 45.8 49.9 52.2 52.7 4,5 Lower middle-income poverty rate ($3.65 in 2017 PPP) 71.2 72.1 74.8 77.2 78.0 78.0 4,5 Upper middle-income poverty rate ($6.85 in 2017 PPP) 92.7 92.7 93.3 93.8 93.6 93.2 GHG emissions growth (mtCO2e) 2.1 2.2 3.3 2.3 2.8 3.2 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ The Consumer Price Index (CPI) series reflects World Bank calculations on the back-casted series following CPI rebasing by the National Bureau of Statistics (NBS). 2/ The fiscal balance is reported in cash basis. 3/ This includes remaining ways and means stock but excludes electricity subsidy arrears, AMCON liabilities and explicit guarantees. 4/ Calculations based on 2018-LSS. Actual data: 2018. Nowcast: 2019-2024. Forecasts are from 2025 to 2027. 5/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 69 This outlook reflects information available as of April 10, 2025. 1 2 RWANDA Population Poverty million millions living on less than $2.15/day 13.9 6.2 3 4 Life expectancy at birth School enrollment Rwanda’s strong economic momentum continued in 2024, years primary (% gross) led by services, manufacturing, and food production. Infla- tionary pressures have eased due to food production im- 67.1 151.9 5 6 provements, lower commodity prices, and tight monetary GDP GDP per capita policy stance. Growth is projected to slowdown in current US$, billion current US$ 2025–2027, as the fiscal consolidation is being fully imple- mented. Poverty is projected to decrease by 1.3pp between 13.6 984.2 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2016 (2017 PPPs). 3/ 2022. 2024-26 driven by solid growth in private consumption. 4/ 2023. 5/ 2024. 6/ 2024. as access to health care, under-five mortality, maternal mortality Key conditions and challenges ratio and fertility rate. In 2014-2023, Rwanda’s GDP per capita increased at a rate of 4.3 percent per year, surpassed only by Ethiopia among SSA Recent developments economies. Rwanda has also achieved substantial gains in edu- cational attainment, health services delivery, and access to ba- Averaging 8.2 percent in 2022-2023, the economy grew by 8.9 per- sic services. However, growth has relied heavily on public invest- cent in 2024, driven by robust private consumption—reflecting the ment—boosted by external aid—that has neither generated suf- creation of close to half a million jobs, especially in rural ar- ficient jobs nor resulted in rapid gains in productivity and rapid eas—and strong investment. On the supply side, growth was dri- poverty reduction. Moving Rwanda to the next stage of develop- ven by continued expansion in services and industry and recovery ment will require greater reliance on private sector investment to in food production. enhance economic activity, raise incomes, and provide the financ- ing needed. Increased market orientation of agricultural support The National Bank of Rwanda (NBR) eased the monetary stance policies and higher efficiency of agricultural markets will also be amidst a gradual decline of inflation. Headline inflation dropped to required to make growth more inclusive. Critical areas to enable 2.5 percent in September 2024—the lowest since January 2022, be- rapid private sector development, include enhancing competition, fore edging up to 6.5 percent in March 2025—but remains within building firms’ capabilities, increasing access to finance, foster- its target bands (5±3 percent). Disinflation was primarily driven by ing development and diffusion of information and communica- lower food prices, reflecting improved supplies of fresh food items, tion technologies, and innovation. An abrupt disruption to access- lower imported inflation and monetary policy tightening. Lower ing concessional development financing could jeopardize Rwan- food inflation eased the pressure on household budgets, especially da’s growth aspirations and human capital developments, such the poor. This has allowed the NBR to lower the policy rate—by FIGURE 1 / Headline and core inflation and central bank rate FIGURE 2 / Actual and projected poverty rates and real private consumption per capita Percent Poverty rate (%) Real private consumption per capita (constant LCU) 25 100 800000 90 700000 20 80 600000 70 15 60 500000 50 400000 10 40 300000 30 5 200000 20 10 100000 0 0 0 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan 2010 2012 2014 2016 2018 2020 2022 2024 2026 2023 2024 2025 International poverty rate Lower middle-income pov. rate Headline inflation Core inflation Central bank rate Upper middle-income pov. rate Real priv. cons. pc Sources: National Institute of Statistics of Rwanda and National Bank of Rwanda. Source: World Bank. Notes: See footnotes in table on the next page. 70 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. 100 basis points cumulatively—from 7.5 percent in April 2024to 6.5 the next three years, reflecting continued reliance on imports and percent in August 2024. Since then, it was maintained at 6.5 per- gradual export growth. Strong FDI inflows and concessional financ- cent. The franc depreciation against the dollar has also eased to ing are expected to continue supporting external financing needs. 9.8 percent in 2024, down from 18 percent in 2023. By December Inflation is projected to remain near the NBR’s medium-term target 2024, official foreign reserves were about 30 percent higher than of 5 percent. Driven by average growth in private consumption of in December 2023 due to the disbursements under World Bank’s 4.3 percent a year in 2025-2026, poverty is projected to decline to development policy financing (US$255 million) and IMF programs 46.3 percent in 2026. (US$170 million). International reserves remained adequate at about 5.4 months of imports at end-2024, despite the widening The government remains committed to fiscal consolidation, current account deficit. focusing on rationalizing spending and improving revenue administration. Efforts include temporary savings by reducing The FY24/25 budget envisages reducing the fiscal deficit in line costs related to official travel and conferences by increasing with fiscal consolidation to preserve fiscal sustainability. The fiscal reliance on virtual meetings and expanding public services deficit is projected to slightly decline, supported with the ongoing digitalization. Additionally, the government is enhancing man- expenditure rationalization—while safeguarding essential spend- agement, oversight, and monitoring of public investments to ing, in particular on investment and social assistance—as well as improve efficiency and ensure that priority projects deliver the recently adopted tax policy measures. Relying largely on con- their intended impact. Revenue administration reforms will fo- cessional loans to finance the deficit, Rwandan’s public debt is sus- cus on broadening the tax base. Public debt is expected to tainable despite recent increases in the stock (Table 1). Using the peak at 86.4 percent of GDP in 2026 before gradually declining international poverty line of $2.15/day in 2017 PPPs, poverty is es- over the medium term. timated at 47.6 percent in 2024. The outlook is subject to substantial downside risks. Volatility in the global and regional economies could reduce demand Outlook for exports. Disruptions to concessional external financing could dampen growth and human capital development. Domestically, GDP growth is projected to ease, averaging 7.2 percent in 2025-27. main risks stem from climate-related shocks to Rwanda’s dom- Services are expected to continue driving growth. Under the sec- inantly rain-fed agriculture sector, which could negatively affect ond National Strategy for Transformation, Rwanda aims to scale up incomes and food security for rural households, and reigniting manufacturing and high-value production, reducing import depen- inflationary food pressures. Slower progress on domestic re- dence while strengthening its position as a global hub for Meetings, source mobilization and the external adjustment could under- incentives, conferences and exhibition (MICE). This will take time, mine the debt path and raise debt service pressures amidst de- and the current account deficit is expected to remain high over clining concessional financing. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 8.2 8.2 8.9 7.0 7.3 7.3 Private consumption 12.1 9.9 4.2 6.2 5.5 5.6 Government consumption 10.6 6.0 12.9 7.8 7.1 11.4 Gross fixed capital investment -12.6 -4.1 19.0 16.5 18.3 13.0 Exports, goods and services 29.4 25.8 16.0 10.0 9.7 8.7 Imports, goods and services 17.9 14.4 11.5 13.0 11.7 10.1 Real GDP growth, at constant factor prices 5.2 16.0 6.2 7.0 7.3 7.3 Agriculture 1.6 1.7 5.3 5.2 5.3 5.3 Industry 4.9 10.2 10.0 9.1 9.2 9.3 Services 7.3 25.3 5.2 6.9 7.4 7.4 Employment rate (% of working-age population, 15 years+) 51.6 52.2 52.4 52.7 52.9 53.2 Inflation (consumer price index) 12.1 15.4 4.8 5.0 5.0 5.0 Current account balance (% of GDP) -9.1 -11.5 -12.7 -13.8 -16.0 -13.5 Net foreign direct investment inflow (% of GDP) 2.6 3.6 4.2 5.4 8.1 7.0 Fiscal balance (% of GDP) -6.2 -4.6 -5.5 -4.8 -3.7 -3.4 Revenues (% of GDP) 24.1 22.5 21.6 22.1 22.6 22.8 Debt (% of GDP) 68.7 73.8 78.8 84.8 86.4 86.4 Primary balance (% of GDP) -4.1 -2.4 -3.2 -2.5 -1.7 -1.6 1,2 International poverty rate ($2.15 in 2017 PPP) 49.2 48.0 47.6 46.9 46.3 45.7 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 76.3 75.5 75.3 74.8 74.4 74.1 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 91.7 91.4 91.4 91.2 91.1 91.0 GHG emissions growth (mtCO2e) 1.6 0.9 2.5 2.3 2.8 2.9 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2010-EICV-III and 2016-EICV-V. Actual data: 2016. Nowcast: 2017-2024. Forecasts are from 2025 to 2027. 2/ Projection using average elasticity (2010-2016) with pass-through = 0.25 based on private consumption per capita in constant LCU. Macro Poverty Outlook / April 2025 71 This outlook reflects information available as of April 10, 2025. SÃO TOMÉ AND 1 2 Population Poverty thousand thousands living on less than $3.65/ day 235.5 93.2 PRÍNCIPE Life expectancy at birth 3 School enrollment 4 years primary (% gross) Economic growth is hindered by structural challenges. In 68.8 105.9 2024, the economy grew by 0.9 percent, supported by 5 6 GDP GDP per capita tourism and improved electricity supply, while facing infla- current US$, billion current US$ tion, weak job creation, and rising emigration. Growth is expected to rebound due to energy reforms and macro- 0.8 3244.8 economic stabilization. Risks from delayed reforms, weak Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2017 (2017 PPPs). 3/ 2022. 4/ 2021. 5/ 2024. 6/ 2024. donor support, commodity price volatility, global trade policy shifts, and vulnerability to natural disasters are high. are not in employment, education, or training, prompting youth, Key conditions and challenges including skilled ones, to emigrate. São Tomé and Príncipe (STP), a small-two island state in the Gulf of Recent economic growth has been hindered by unreliable and Guinea, boasts untapped natural wealth like beaches, rainforests, costly electricity. The electricity sector is dominated by EMAE (Em- and rich biodiversity, offering growth opportunities through the presa de Água e Electricidade), a state-owned enterprise, which re- blue economy. These opportunities, however, are hampered by lies on fuel imports and outdated and poorly maintained diesel structural challenges like limited institutional capacity, low eco- generators. In 2023, STP lost a preferential agreement to purchase nomic diversification, high import dependence, low economies of oil on credit with its main supplier, which caused a balance of pay- scale, and climate change vulnerability. ment shock, severe power outages, and fiscal stress. EMAE’s ac- cumulated debt to ENCO (Empresa Nacional de Combustíveis e Economic growth has been driven by externally financed Óleos), the country’s fuel importer, is estimated at 28.2 percent of public investment, dependent on official development assis- GDP in 2024. tance, which declined from 24 percent of GDP in 2004-08 to 14 percent in 2019-23, challenging the country’s growth mod- el. In addition, spending cuts to restore fiscal sustainability Recent developments have put necessary development spending at risk. Weak GDP per capita growth and limited job opportunities have hin- Real GDP growth recovered from 0.4 percent in 2023 to 0.9 dered poverty reduction and increased vulnerability among percent in 2024, supported by increased electricity generation the poorest, exacerbated by limited access to education, ba- and tourism, with arrivals surpassing pre-pandemic levels. How- sic services, and social protection. Nearly half of the youth ever, limited foreign currency and fiscal consolidation constrained FIGURE 1 / Fuel imports and international reserves FIGURE 2 / Actual and projected poverty rates and real GDP per capita Millions, US$ Poverty rate (%) Real GDP per capita (constant LCU) 80 100 19500 70 90 19000 60 80 18500 70 18000 50 17500 60 40 17000 50 30 16500 40 20 16000 30 15500 10 20 15000 0 10 14500 Jan-24 Mar-24 May-24 Jul-24 Sep-24 Nov-24 0 14000 Foreign bonds Deposits 2010 2012 2014 2016 2018 2020 2022 2024 2026 Special Drawing Rights Others International poverty rate Lower middle-income pov. rate Fuel imports* Upper middle-income pov. rate Real GDP pc Source: Central Bank of São Tomé and Príncipe. Source: World Bank. Notes: See footnotes in table on the next page. Note: *Fuel imports (12-month rolling sum). 72 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. economic activity. Real GDP growth remains below population access to inputs, the resumption of delayed infrastructure invest- growth, leading to lower real income per capita. ments, tourism arrivals and energy sector reforms. Annual inflation averaged 14.5 percent in 2024, down from 21.4 Annual inflation is projected to average 9.6 percent in 2025 and percent in 2023, but stagnated towards the year’s end. It fell from then stabilize around 5 percent, as reforms alleviate supply bottle- 19.2 to 11.4 percent between April and October, mostly due to necks and monetary policy remains tight. With tight macroeconom- smaller contribution from food prices. However, overall inflation ic policies and weak job creation, progress in poverty reduction is has increased since November, driven by imported food prices. expected to be limited. The poverty rate is projected at 15.5 per- cent over 2025-27, based on the international poverty line. The external sector strengthened in 2024, with the current ac- count deficit estimated at 7.1 percent of GDP, down from 12.6 Supported by the IMF program, the primary balance (commitment percent in 2023. Tourism exports nearly doubled, which along basis) is expected to increase from 1.8 percent of GDP in 2024 to higher cocoa prices and lower fuel imports, supported a reduc- 3.9 percent by 2027. Revenues, including grants, are projected to tion in the trade deficit. International reserves strengthened to- remain close to 24 percent of GDP over 2024-27; expenditures are wards the end of 2024 thanks to disbursements from the IMF, planned to drop from 23 to 20.4 percent of GDP, while preserving the World Bank and Portugal. social spending. Central government debt, excluding EMAE’s debt to ENCO, is expected to decline from 45.7 to 31.6 percent of GDP in The private sector remains weak and underdeveloped, with an 2024-27. However, contingent liabilities from EMAE’s debt are ex- employment rate of 21.7 percent. Sluggish growth and high in- pected to stay high, projected at 24 percent of GDP by 2027. flation continued to strain households’ purchasing power, leav- ing 15.8 percent of the population on less than US$2.15/day. Despite declining foreign official transfers, a reduced trade-in- About 18 percent of the population lives abroad, and depar- goods deficit, mostly from lower fuel imports, is expected to de- tures from STP increased by more than 70 percent in 2022-23 crease the current account deficit to 5.7 percent of GDP by 2027. compared to 2019. Lower fuel imports and temporary capital flow management mea- sures should help strengthen international reserves. Outlook Downside risks include delayed energy sector reforms, changes in donor support, commodity price volatility, and vulnerability to Growth is expected to accelerate as reforms bolster macroeco- natural disasters. Although the direct impacts of the recent glob- nomic stability and drive structural change. Real GDP growth is pro- al trade policy shifts are expected to be limited, STP is vulnerable jected to reach 3.1 percent in 2025 and average 4 percent in the to adverse indirect growth outcome in the European Union, its medium term, driven by agricultural exports facilitated by better main trade partner. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 0.2 0.4 0.9 3.1 4.8 4.1 Real GDP growth, at constant factor prices 1.2 -1.1 0.9 3.1 4.8 4.1 Agriculture -13.6 -12.4 -6.2 1.0 2.0 3.0 Industry 6.4 -2.1 3.3 9.5 4.9 5.0 Services 1.5 0.0 0.9 1.9 5.0 4.0 Employment rate (% of working-age population, 15 years+) 21.5 21.5 21.7 21.6 21.4 21.3 Inflation (consumer price index) 18.0 21.1 14.4 9.6 6.3 5.0 Current account balance (% of GDP) -14.7 -12.6 -7.1 -6.0 -6.0 -5.7 Net foreign direct investment inflow (% of GDP) 23.9 3.0 7.8 6.0 5.5 5.6 Fiscal balance (% of GDP) -1.2 -0.1 0.7 3.9 2.1 3.3 Revenues (% of GDP) 27.4 22.2 23.9 27.3 23.5 23.8 Debt (% of GDP) 68.8 50.7 45.7 40.3 36.6 31.6 Primary balance (% of GDP) -0.7 0.6 1.8 4.5 2.7 3.9 1,2 International poverty rate ($2.15 in 2017 PPP) 15.6 15.7 15.8 15.7 15.5 15.3 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 44.8 45.0 45.1 45.0 44.7 44.5 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 79.3 79.6 79.8 79.6 79.1 78.7 GHG emissions growth (mtCO2e) 0.6 0.4 0.5 1.6 2.2 1.8 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Projection using point to point elasticity at regional level with pass-through = 0.7 based on GDP per capita in constant LCU. 2/ Actual data: 2017. Nowcast: 2018-2024. Forecasts are from 2025 to 2027. Macro Poverty Outlook / April 2025 73 This outlook reflects information available as of April 10, 2025. 1 2 SENEGAL Population Poverty million millions living on less than $2.15/day 18.5 1.7 3 4 Life expectancy at birth School enrollment GDP growth is estimated at 5.8 percent in 2024, up from 4.3 years primary (% gross) percent in 2023, driven by hydrocarbon production, while solid agricultural growth and lower inflation—averaging 0.8 per- 67.9 82.6 5 6 cent—reduced extreme poverty incidence to 8.4 percent. An GDP GDP per capita audit confirmed significant under-reporting of fiscal deficits current US$, billion current US$ and public debt between 2019–2023. Emerging macro-fiscal management complexities, trade policy shifts and rising global 34.3 1856.1 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2021 (2017 PPPs). 3/ 2022. uncertainties pose challenges to Senegal’s economic outlook. 4/ 2023. 5/ 2024. 6/ 2024. surge in crude oil extraction. Senegal’s non-oil GDP growth Key conditions and challenges slowed to 3.5 percent in 2024, down from 4.3 percent in 2023, largely due to political turmoil surrounding the 2024 presiden- Despite healthy economic growth driven by new hydrocarbon tial election which disrupted economic activity, particularly in production, fiscal management challenges now dominate Sene- the tertiary sector. The agricultural sector performed well, sup- gal’s development path. On 12th February, a Court of Auditors’ ported by adequate rainfall, though affected by severe flooding report requested by the incoming government in a push for in the north and northeast. The start of hydrocarbon produc- transparency showed higher historical deficit and debt levels. tion significantly boosted growth, offsetting much of the non-oil Costly energy subsidies add strain to public finances. Meanwhile, sector's weak performance. structural issues, including human capital deficits, weak formal employment, low labor productivity, and high youth emigration, Inflation pressures eased significantly, dropping to 0.8 per- persist alongside external shocks like climate change and region- cent from 5.9 percent in 2023, driven by moderating global al instability, impeding growth and poverty reduction. To ensure commodity and domestic food prices. The West African Eco- sustained and inclusive development, assertive fiscal consolida- nomic and Monetary Union (WAEMU) inflation rate declined tion is needed alongside government’s commitment to trans- further in 2024 to 3.5 percent but remained above the 1–3 parency, improving the investment climate and managing natural percent WAEMU target band. Regional foreign reserves in- resources effectively. creased from 3.5 months of imports in 2023 to 4.7 months in 2024, reflecting the resumption of international bond is- suances, IMF, and World Bank disbursements. The Central Recent developments Bank of West African States (BCEAO) kept its policy interest rates unchanged throughout 2024 at 3.5 percent for liquidity Overall, real GDP growth is estimated at 5.8 percent (3.4 per- calls and 5.5 percent for the marginal lending facility. With cent in per capita terms) in 2024 driven by a +15.5 percent higher labor incomes driven by stable agricultural growth FIGURE 1 / Evolution of main macroeconomic indicators FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent, percent of GDP Percent of GDP Poverty rate (%) Real GDP per capita (constant LCU) 9 0 100 1200000 6 90 -5 1000000 80 3 70 800000 0 -10 60 50 600000 -3 -15 40 -6 400000 30 -20 20 -9 200000 10 -12 -25 0 0 2019 2020 2021 2022 2023 2024e 2025p 2026p 2027p 2011 2013 2015 2017 2019 2021 2023 2025 2027 GDP growth (lhs) Primary fiscal balance (lhs) International poverty rate Lower middle-income pov. rate Current account balance (rhs) Upper middle-income pov. rate Real GDP pc Sources: National Bureau of Statistics and World Bank staff estimates. Source: World Bank. Notes: See footnotes in table on the next page. 74 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. and lower (food) inflation, extreme poverty is expected to have declined to 8.4 percent (measured at the international Outlook poverty line of $2.15 per day PPP 2017) in 2024, compared to 9.8 percent in 2023. Economic growth is projected to average 6.8 percent in 2025–2027, driven by increased hydrocarbon production, while inflation re- Senegal’s fiscal position has deteriorated following significant un- mains below 3 percent amid declining food and energy prices. der-reporting of fiscal deficits and public debt over 2019–2023. The CAD is projected to narrow to 8.4 percent over 2025–2027, al- The Court of Auditors’ report assessed Central Government debt beit higher than previously projected due to the impacts of global at 99.7 percent of GDP at end-2023, over 20 percentage points trade policy shifts and commodity price uncertainties. Weak non- more than previously reported official figures driven by both ex- hydrocarbon exports add pressure on regional foreign exchange ternal and domestic debt. Official data reports that the fiscal reserves. Regional currency reserves are expected to rise gradually, deficit reached 11.5 percent of GDP in 2024, driven by domestic supported by the resumption of international bond issuances, re- revenue shortfalls, increased interest payments, additional covering exports and monetary policy easing in the Euro Area. The spending related to energy subsidies, the legislative elections, regional inflation rate is expected to align with the WAEMU tar- and responses to floods. The deficit was financed by new borrow- get band from 2025 onwards, while regional reserves are project- ing on regional and international markets, pushing up general gov- ed to rise to 5.4 months of imports in 2025, supported by recov- ernment debt to 105.9 percent of GDP at end-2024. The deteriora- ering exports, and lower Eurozone interest rates. Stable agricultur- tion of the fiscal position stemming from the 2019–23 misreporting al growth, and rising output in the services sector are expected to and 2024 pressures led to downgrades in creditworthiness and the decrease poverty to 7.5 percent in 2025, and 6.2 percent in 2027. rise of sovereign debt yields. Nonetheless, structural impediments to poverty reduction persist, requiring investments in health, education and private sector-led The current account deficit (CAD) is projected to narrow sig- job creation. Growing economic uncertainty will persist with high nificantly to 12.0 percent of GDP, down from 18.9 percent in fiscal deficit and debt levels. Fiscal consolidation measures, in- 2023, following the start of hydrocarbon production, which has cluding the elimination of energy subsidies, lower capital spend- begun to reshape the country’s external trade dynamics by bol- ing, and increased tax revenues, should enable the fiscal deficit to stering export revenues. The CAD has been financed by foreign decline towards the regional convergence criteria of 3 percent of direct investments and portfolio investments, remittances, and a GDP in the medium term and reduce debt levels, while protecting mix of external credits and regional borrowing. The BCEAO has growth and the poor. Risks to debt sustainability and macro sta- kept its policy interest rates unchanged since December 2023 at bility will persist as financing conditions remain tight and escalat- 3.5 percent for liquidity calls and 5.5 percent for the marginal ing trade policy uncertainty could hamper export and growth more lending facility. than currently anticipated. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 3.9 4.3 5.8 7.9 5.9 6.7 Private consumption 3.8 5.0 4.6 4.1 4.7 5.2 Government consumption 1.7 5.0 -4.8 -1.5 -0.7 2.9 Gross fixed capital investment 11.0 9.3 7.5 5.9 10.7 11.3 Exports, goods and services 3.7 -6.0 18.1 25.8 5.0 3.2 Imports, goods and services 14.4 -0.4 7.0 6.5 5.3 5.1 Real GDP growth, at constant factor prices 3.6 4.5 5.8 7.8 5.9 6.7 Agriculture 0.2 5.9 6.0 6.2 6.3 6.4 Industry 2.5 5.2 13.0 23.4 4.9 4.7 Services 5.1 3.8 2.6 0.8 6.4 8.0 Inflation (consumer price index) 9.7 5.9 0.8 2.0 2.0 2.0 Current account balance (% of GDP) -19.9 -18.9 -12.0 -10.0 -8.4 -7.0 Fiscal balance (% of GDP) -12.6 -12.3 -11.5 -7.6 -5.8 -4.2 Revenues (% of GDP) 20.0 20.7 19.3 20.0 20.2 20.6 Debt (% of GDP) 86.6 99.7 105.9 99.9 93.4 88.2 Primary balance (% of GDP) -10.2 -9.0 -7.5 -2.9 -1.9 -0.4 1,2 International poverty rate ($2.15 in 2017 PPP) 9.8 9.8 8.4 7.5 6.7 6.2 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 36.3 36.7 34.2 32.1 30.3 29.6 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 76.0 76.6 74.5 73.2 71.4 71.1 GHG emissions growth (mtCO2e) 1.2 1.0 3.5 6.3 3.1 3.1 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2021-EHCVM. Actual data: 2021. Nowcast: 2022-2024. Forecasts are from 2025 to 2027. 2/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 75 This outlook reflects information available as of April 10, 2025. 1 2 SEYCHELLES Population Poverty thousand thousands living on less than $6.85/ day 121.4 6.5 3 4 The economy grew by 2.4 percent in 2024, driven by the ser- Life expectancy at birth School enrollment years primary (% gross) vices sector despite a moderation in tourism. Growth is pro- jected to increase to 3.1 percent in 2025, supported by high- 73.8 97.1 er consumption and public investment linked to the hosting 5 6 of sporting events, along with expansions in telecommunica- GDP GDP per capita current US$, billion current US$ tions and construction. Poverty is expected to decrease from 6.2 percent in 2024 to 5.9 percent in 2025, based on the 2.2 17878.6 $6.85-per-day poverty line. Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2018 (2017 PPPs). 3/ 2022. 4/ 2023. 5/ 2024. 6/ 2024. at 3.2 percent and extreme poverty has nearly been eliminated, Key conditions and challenges socioeconomic vulnerabilities persist. Substance abuse, teenage pregnancy, declining education outcomes, and high unemploy- Seychelles, an archipelago of 115 islands with a population of ment among youth and single female parents threaten human cap- 121,354, has the highest Gross National Income (GNI) per capita ital development, long-term economic sustainability, and house- in Africa. Its economy relies primarily on tourism and fisheries, hold welfare. Unemployment among youth was 12.2 percent in the and on related activities that support these sectors. Since 2008, second quarter of 2024, compared to 10.2 percent in the second key macroeconomic and structural reforms to liberalize the ex- quarter of 2023. change rate and factor markets have contributed to the country’s economic development. However, Seychelles’ geography—charac- terized by its small size, geographic dispersion, remoteness, and Recent developments vulnerability to climate shocks—presents inherent structural chal- lenges. A high dependence on a few sectors and imports exposes The economy grew by an estimated 2.4 percent in 2024, supported the economy to external shocks, including fluctuations in interna- by the service sectors, despite a moderation in tourism. New sea- tional travel demand and volatility in food, fuel, and freight prices. sonal scheduling by key airlines reduced the number of flights to Additionally, geographic constraints drive up production costs, hin- the islands, resulting in a 0.5 percent increase in visitor arrivals der export competitiveness, and limit economic diversification, in- which was 1.5 percent below the government’s target. Despite creasing reliance on the public sector and state-owned enterprises weak tourism growth, the telecommunications sector played a key for essential services. role in supporting overall economic performance, with increased mobile subscriptions and data traffic contributing a cumulative 5.6 Seychelles faces growing climate risks, including more intense and percentage points to GDP growth by the third quarter of 2024, frequent monsoon rains and rising sea levels, which lead to floods, compared to the same period in 2023. Furthermore, the services landslides, and coastal erosion. While unemployment remains low sector experienced growth, primarily driven by administrative and FIGURE 1 / Public debt and primary balance FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent of GDP Percent of GDP Poverty rate (%) Real GDP per capita (constant LCU) 100 5 12 300000 80 10 250000 0 8 200000 60 -5 6 150000 40 4 100000 -10 20 2 50000 0 0 0 -15 2013 2015 2017 2019 2021 2023 2025 2027 2019 2020 2021 2022 2023 2024 International poverty rate Lower middle-income pov. rate Debt (lhs) Primary balance (rhs) Upper middle-income pov. rate Real GDP pc Source: Ministry of Finance, National Planning and Trade. Source: World Bank. Notes: See footnotes in table on the next page. 76 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. support services, along with the financial and insurance sectors, events, including the FIFA Beach Soccer World Cup, the Indian contributing 2.1 and 1.0 percentage points to GDP growth, respec- Ocean Youth and Sport Commission Games, and infrastructure tively, over the same period. However, a continued reliance on im- projects ahead of the September elections. However, weaker eco- ports widened the current account deficit to 8.7 percent of GDP in nomic growth in Seychelles’ key tourism markets is expected to 2024 from 8.4 percent in 2023. dampen growth prospects in the wake of US imposed tariffs. Con- currently, lower global commodity prices are projected to ease im- In January 2024, the Public Utilities Corporation raised tariffs for port costs, contributing to modest improvements in the current ac- water and sewerage by 9.2 percent and gradually increased elec- count deficit, estimated at 8.6 percent of GDP in 2025. Lower com- tricity tariffs cumulatively to 8.4 percent by year-end. These adjust- modity prices are expected to moderate domestic inflation, which ments contributed to a rise in headline inflation to 0.3 percent. is projected at 1.0 percent for the year. As a result, the Central Bank However, core inflation remained negative at -0.6 percent. Conse- is likely to maintain an accommodative monetary policy stance. quently, the Central Bank maintained the monetary policy rate at 1.75 percent following a 25-basis-point reduction in April 2024. While the government plans to increase capital investments (in- cluding for climate adaptation), continued efforts to strengthen On the fiscal side, under execution of primary and capital expen- revenue mobilization are expected to support fiscal consolidation, diture resulted in a primary budget surplus of 3.2 percent of GDP with a projected primary surplus of 1.0 percent of GDP in 2025. No- in 2024, up from 1.7 percent in 2023. Social assistance remained tably, the digital modernization of tax and customs administration steady at 4.6 percent of GDP, continuing to support the most vul- is expected to enhance revenue collection. Additionally, amend- nerable members of society. Meanwhile, tax collection remained ments to transfer pricing legislation will further support revenue strong, with VAT and business tax performing in line with budget efforts. Due to public transfers and social programs, the poverty expectations. In parallel, sound debt management practices result- rate is projected to decline from 6.2 percent in 2024 to 5.9 percent ed in a stable public debt-to-GDP ratio of 60 percent by the third in 2025, based on the $6.85-per-day poverty line. quarter of 2024, whereby domestic and external debt were evenly distributed, each accounting for 29 percent of GDP. However, risks to the outlook remain, reflecting the uncertain glob- al environment. Key factors include geopolitical tensions, evolving trade policies—particularly the indirect impact of US tariffs—and Outlook climate-related risks. Weaker economic growth in key tourism mar- kets, coupled with increased global financial market volatility, could Economic growth is projected at 3.1 percent in 2025, supported weigh on tourism arrivals. Domestically, political developments by higher consumption and public investment tied to major ahead of the September 2025 elections may exacerbate risks. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 12.7 2.3 2.4 3.1 3.0 2.9 Private consumption -0.3 -0.1 4.4 4.7 4.5 4.5 Government consumption -12.8 26.1 4.1 9.1 -5.3 -2.3 Gross fixed capital investment 23.7 17.6 -5.6 -9.4 10.2 4.2 Exports, goods and services 26.6 -4.1 2.8 3.1 3.0 3.0 Imports, goods and services 8.6 2.4 2.9 3.3 3.1 3.1 Real GDP growth, at constant factor prices 12.8 2.2 2.4 3.1 3.2 2.9 Agriculture 14.1 9.1 0.7 0.9 0.8 0.8 Industry 7.9 14.4 1.6 2.0 1.8 1.8 Services 13.6 -0.2 2.6 3.4 3.6 3.2 Inflation (consumer price index) 2.6 -1.0 0.3 1.0 1.4 1.9 Current account balance (% of GDP) -9.1 -8.4 -8.7 -8.6 -8.5 -8.5 Net foreign direct investment inflow (% of GDP) 11.2 12.8 11.8 12.1 9.7 9.7 Fiscal balance (% of GDP) -1.4 -1.1 -0.4 -1.6 -1.0 -0.4 Revenues (% of GDP) 30.5 31.8 33.8 37.0 34.2 33.5 Debt (% of GDP) 62.6 57.0 59.9 58.5 56.4 55.7 Primary balance (% of GDP) 0.6 1.7 3.2 1.0 1.7 2.4 1,2 International poverty rate ($2.15 in 2017 PPP) 0.5 0.5 0.5 0.5 0.4 0.4 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 1.2 1.2 1.1 1.1 1.0 1.0 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 6.7 6.3 6.2 5.9 5.6 5.6 GHG emissions growth (mtCO2e) 2.7 2.9 3.0 2.9 3.1 3.1 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2018-HBS. Actual data: 2018. Nowcast: 2019-2024. Forecasts are from 2025 to 2027. 2/ Projection using neutral distribution (2018) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU. Macro Poverty Outlook / April 2025 77 This outlook reflects information available as of April 10, 2025. 1 2 SIERRA LEONE Population Poverty million millions living on less than $2.15/day 8.6 2.0 3 4 Life expectancy at birth School enrollment The economy has been set back with recurrent policy slip- years primary (% gross) pages exacerbating macroeconomic conditions and damp- ening policy credibility. Poverty is expected to peak in 2025, 60.4 153.1 5 6 slowly reducing as inflation declines. Stronger macroeco- GDP GDP per capita nomic management, improved governance and increased current US$, billion current US$ productivity are needed to accelerate inclusive growth and restore macroeconomic stability and policy credibility. 7.6 878.1 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2018 (2017 PPPs). 3/ 2022. 4/ 2023. 5/ 2024. 6/ 2024. Key conditions and challenges Recent developments Sierra Leone continues to grapple with heightened macroeco- Growth is estimated to have slowed to 4.0 percent in 2024, down nomic challenges, including weak fiscal discipline, persistent (al- from 5.7 percent in 2023, largely due to falling global iron ore beit easing) inflationary pressures and unbalanced growth dri- prices which contributed to slower mining production. Despite ac- vers. The economy has recovered post-pandemic, but growth counting for 7 percent of the economy’s output, the mining sector remains concentrated in the extractives sectors, while agricul- had the highest contribution to growth among all sectors. Services ture and services remain subdued. A less benign global en- recovered modestly but agricultural output was affected by flash vironment will have a bearing on small open economies like floods. On the demand side, slower mineral export growth, cou- Sierra Leone that heavily depend on global demand and favor- pled with high import growth driven by mineral oil and lubricants able financial conditions. contributed to the slowdown. Private consumption growth picked up a bit, while investments, particularly through the expansion of Chronic expenditure overruns have eroded budget credibility and production in two major iron ore mines and the lifting of mining ex- increased borrowing costs, while the energy sector poses a fiscal ploration ban, supported growth. risk. The country remains at high risk of debt distress, with debt service to revenue exceeding 100 percent, and high rollover risks. The overall fiscal deficit reached 4.8 percent of GDP in 2024, Fiscal dominance continues to hinder monetary policy transmis- exceeding the budgeted target by a wide margin. Weaknesses sion and constrain private sector credit growth. Sierra Leone faces in commitment control and oversight institutions, including high poverty due to low agricultural productivity, limited jobs, low supreme audit institutions and parliament, coupled with legisla- human capital and weak social protection. Approximately 32.7 per- tive deficiencies in public finance management, contributed to in- cent of the population lived on less than US$2.15 per person per efficiencies in budget execution. Revenues improved sharply to day (2017 PPP) in 2024. 8.8 percent of GDP (from 7.4 percent in the previous year) due to FIGURE 1 / Real GDP growth and contributions to real GDP growth FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant million LCU) 50 100 9 40 90 8 30 80 7 20 70 6 10 60 5 0 50 4 -10 40 -20 3 30 -30 20 2 -40 10 1 2000 2003 2006 2009 2012 2015 2018 2021 2024 2027 0 0 Gov. cons. Exports GFCF 2011 2013 2015 2017 2019 2021 2023 2025 2027 Inventories Private cons. Imports International poverty rate Lower middle-income pov. rate Statistical disc. GDP Upper middle-income pov. rate Real GDP pc Sources: Statistics Sierra Leone and World Bank. Source: World Bank. Notes: See footnotes in table on the next page. 78 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. tax policy reforms—a trend that must continue to finance Sierra global trade policy. The modest projected growth is expected to Leone’s vast financing needs. The deficit was primarily financed be driven by resilience of the services sector, improvements in through domestic short-term securities. Debt distress risks re- agricultural productivity and continued growth in mining. Lower mained high, with the cost of domestic debt rising to an average inflation is likely to help household spending and retail trade, of 40 percent annual interest rate. while agricultural value chain development and initiatives under the ‘Feed Salone’ will bolster productivity. Additionally, invest- Monetary policy was tightened by 250 bps during 2024 to address ments in the mining sector, including expansion of production inflation, which progressively decelerated throughout the year, capacities and explorations of new mines, are expected to boost from 52.2 percent in December 2023 to 13.8 percent by December production and export performance. 2024. The inflation slowdown was further supported by a stable ex- change rate, alongside a decline in international food and energy The fiscal deficit is expected to remain elevated, though gradually prices. Fiscal dominance limited private sector credit, while Bank of narrowing. Debt remains at high risk of distress, underscoring the Sierra Leone’s (BSL) purchases of government securities hindered need for credible fiscal consolidation and tighter expenditure con- the effectiveness of monetary policy operations. trols. Priorities include curbing subsidies, streamlining tax expendi- tures, avoiding recurrent budget overruns, and improving budget Despite improvements in the current accounts, gross international planning and execution with stronger oversight. The current ac- reserves declined to cover only 2 months of imports in 2024, com- count deficit is projected to narrow only in the medium term, dri- pared to 2.6 months of imports in 2023. Foreign direct investment ven by slower import growth and a potential rise in mining-related (FDI) remained low and concentrated in the mining sector. FDI as global uncertainties ease. Persistent economic challenges, including high inflation, and Poverty is projected to gradually decline to 33.8 percent by 2027. limited job opportunities and social protection coverage have Sierra Leone must curb inflation through sound fiscal and mone- increased poverty substantially from its pre-COVID-19 level of tary policies to protect households from a further erosion of pur- 24.0 percent, measured at the US$2.15 per person per day chasing power. Additionally, reforms are needed to foster inclu- (2017 PPP) international poverty line. In 2024, approximately sive growth, strengthen social protection through targeted inter- 32.7 percent of the population lives in poverty, based on pro- ventions, and ensure investments into human capital to improve jections that use a robust methodology that accounts for both long-term livelihoods. growth and inflation. This outlook is subject to several downside risks. Persistent fiscal overruns could undermine both fiscal and debt sustainability, ulti- Outlook mately jeopardizing macroeconomic stability. External risks include global commodity prices fluctuations, weaker global demand, and Growth is projected to remain subdued at around 4 percent in 2025, higher imported inflation. Additionally, weather shocks may hinder held back in part by ongoing shifts and heightened uncertainty in agricultural growth and poverty reduction. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 5.3 5.7 4.0 4.1 4.2 4.2 Private consumption 7.4 1.8 2.8 3.7 3.9 3.9 Government consumption -0.7 0.5 0.8 1.1 2.7 5.9 Gross fixed capital investment 22.2 12.8 21.8 11.0 11.4 8.3 Exports, goods and services 9.0 7.0 6.5 5.1 7.0 7.0 Imports, goods and services 15.8 9.3 12.0 7.6 9.5 8.0 Real GDP growth, at constant factor prices 5.3 5.7 4.0 4.1 4.2 4.2 Agriculture 3.0 2.4 2.4 3.0 3.0 3.1 Industry 9.9 14.4 4.7 4.3 5.0 5.1 Services 5.4 4.7 4.9 4.8 4.7 4.6 Inflation (consumer price index) 24.9 47.2 29.1 18.0 15.5 12.0 Current account balance (% of GDP) -4.8 -5.0 -3.9 -3.7 -3.1 -2.7 Net foreign direct investment inflow (% of GDP) 4.7 3.1 3.0 2.8 2.9 2.9 Fiscal balance (% of GDP) -5.4 -4.8 -4.8 -4.5 -4.1 -3.9 Revenues (% of GDP) 10.7 10.4 11.7 11.9 12.0 12.0 Debt (% of GDP) 53.5 46.2 41.8 37.9 36.0 33.3 Primary balance (% of GDP) -3.6 -2.5 -2.2 -1.2 -0.9 -1.2 1,2 International poverty rate ($2.15 in 2017 PPP) 22.6 28.2 32.7 34.5 34.4 33.8 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 59.8 62.5 63.6 64.1 61.8 60.0 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 87.8 87.9 87.6 87.5 86.0 84.3 GHG emissions growth (mtCO2e) 3.8 -0.2 -0.2 0.3 0.8 0.9 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2018-SLIHS. Actual data: 2018. Nowcast: 2019-2024. Forecasts are from 2025 to 2027. 2/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 79 This outlook reflects information available as of April 10, 2025. 1 2 SOMALIA Population Poverty million millions living under natl. poverty line 16.2 9.7 3 4 Life expectancy at birth School enrollment The Somali economy continued overall strong performance years primary (% gross) in 2024. Growth remained near 4 percent, supported by im- proved agriculture. Inflation fell below 6 percent, and a slight 56.1 25.0 5 6 fiscal surplus was driven by improvements in revenue collec- GDP GDP per capita tion. Reliance on external financing continues. Poverty re- current US$, billion current US$ mains high and widespread, with high vulnerability to climat- ic shocks. Similar economic performance is expected over 12.1 745.9 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2022. 3/ 2022. 4/ 2023. 5/ 2024. the medium term, barring major climate or security shocks. 6/ 2024. The latter includes accelerating domestic revenue mobilization re- Key conditions and challenges forms, improving the effectiveness of spending in social sectors, containing the wage bill, efficient security spending, advancing The economy continued to rebound from the severe 2018-22 Public Finance Management reforms, and further strengthening drought seasons. Progress on state and institution building has of debt management. Macroeconomic stability and development further strengthened the growth environment. Further progress in Somalia are expected to continue requiring a sustained and hinges on continued economic reform progress, an improving substantial flow of concessional finance over the medium term. security situation (including international support following the end of the African Union Transition Mission in Somalia (ATMIS) Poverty is high and widespread. The national poverty rate was 54 and building buffers against shocks to which Somalia is currently percent in 2022, ranging from 46 percent for the urban population highly exposed. Multiple and overlapping climate-related and ex- to 78 percent among the nomadic population. In addition, there ternal shocks have interrupted the country’s growth trajectory was very little progress in poverty reduction between 2017 and and slowed the transition from fragility. Real GDP growth av- 2022, coinciding with a lack of per capita economic growth due to eraged only 2.4 percent annually in 2019–24 with an average inconsistent economic growth and high exposure to shocks. negative real GDP per capita growth of 0.4 percent. Given the high rates of economic inactivity and unemployment, current growth does not generate sufficient jobs, which is fundamental Recent developments for poverty reduction. Economic growth remains strong, standing at 4.0 percent in 2024 Now that Somalia has graduated from the Heavily Indebted Poor compared to 4.2 percent in 2023, driven by agriculture produc- Countries (HIPC) Initiative, it will be essential for the authorities to tion, livestock exports and household consumption. Improved cli- maintain macroeconomic stability, support a resilient private sec- matic conditions boosted export recovery, with exports of goods tor and continue prudent public finance policy implementation. and services increasing by 15 percent in 2024, mostly on account FIGURE 1 / Total revenue and wage bill FIGURE 2 / Real GDP growth and contributions to real GDP growth Percent of GDP Percent, percentage points 8 15 7 10 6 5 5 0 4 3 -5 2 -10 1 -15 2020 2021 2022 2023 2024 2025e 2026f 2027f 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 Imports, goods and services Exports, goods and services Private consumption Government consumption Domestic revenue Grants Wage bill Gross fixed investment GDP at market prices Sources: Somalia Authorities and World Bank staff estimates. Sources: Somalia National Bureau of Statistics and World Bank staff estimates. 80 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. of livestock. Imports of goods and services grew at a slower remain strong supported by a favorable growth outlook in several pace, supported by high demand for construction materials and host countries. lower food and oil imports. Thus, trade deficit grew up slightly as imports consistently exceed exports; nevertheless, the current However, Somalia is highly exposed to climate risks, which can account deficit narrowed to 8.9 percent of GDP in 2024 on the quickly worsen food insecurity and dampen economic activity. back of strong growth in livestock exports. However, food secu- Despite improved climatic conditions in recent years, seasonal rity remains a major concern, with nearly 4.6 million people in rainfall is forecast to be below normal in the first half of 2025. Somalia likely to experience high levels of acute food insecurity These worsening climatic conditions may expose existing vulner- in April-June 2025. abilities to climatic shocks, especially among the poor. Risks also emanate from lower global growth, higher commodity prices, the Inflationary pressures have eased but despite falling food prices, ATMIS transition, and political risks linked to federalism. As So- annual inflation remained sticky. Inflation averaged 5.5 percent in malia is highly dependent on external aid, planned reduction in 2024 compared to 6.1 in 2023. This inflation is for Mogadishu only donor support from US and other development partners would and Somaliland and other State continue to face higher inflation. negatively impact growth, poverty reduction, and fiscal accounts. Recent global trade policy uncertainty drives additional downside The Federal Government of Somalia (FGS) budget ended in a risks to growth and inflation. small surplus of 0.1 percent of GDP in 2024 on account of con- tinued improvements in revenue collection and prudent spend- The current account deficit is forecast at 8.7 percent of GDP in ing. Measures to expand the tax base and digitalize tax collec- 2025, due to increased livestock exports and mainly financed tion have resulted in significant improvement in collection of in- through a combination of foreign direct investment and grants. come and sales taxes. The wage bill and security costs account- Inflation is projected at 4.2 percent in 2025, as commodity ed for the bulk of FGS spending, but social spending increased prices soften. at a faster pace. Government’s ability to deliver basic services to the population, however, remains limited and dependent on A fiscal deficit of 0.1 percent of GDP is expected in 2025, as the external funding. FGS is planning to expand provision of public services. New in- come tax legislation, continuing modernization and harmoniza- tion of customs, implementation of the revenue administration Outlook information system, and other reforms are expected to boost do- mestic revenue collection. Growth is projected to remain near 4 percent over the medium term, though with significant downside risks such as climate Poverty, measured using the national poverty line, is forecast to shocks, insecurity, and slow domestic revenue growth. Macroeco- decrease throughout 2025 to 2027 by roughly a percentage point nomic and structural reforms implemented in the context of HIPC each year. However, potential shocks, including the scaling back Completion Point are expected to start paying off and support sus- of humanitarian aid and climatic shocks, may slow this projected tained growth, albeit modestly due to continuing fragility. The re- poverty reduction. Accelerating poverty reduction will require covery of agricultural production and exports is expected to con- strengthening climate resilience, especially for the rural and no- tinue in 2025. The agriculture sector, however, is likely to remain madic population, and promoting inclusive growth through job cre- vulnerable to climate-related shocks. Remittances are projected to ation and increased human capital. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 2.7 4.2 4.0 4.0 4.1 4.1 Private consumption 4.7 4.5 6.0 4.6 4.4 3.5 Government consumption 12.2 5.0 10.2 3.1 0.5 1.0 Gross fixed capital investment 31.5 8.7 9.8 10.2 10.4 10.0 Exports, goods and services 13.7 17.5 10.7 8.2 8.0 8.0 Imports, goods and services 18.8 9.5 11.4 7.8 7.3 6.0 Inflation (consumer price index) 6.8 6.2 5.5 4.2 3.6 3.4 Current account balance (% of GDP) -8.6 -9.3 -8.9 -8.7 -9.8 -10.0 Fiscal balance (% of GDP) 0.0 0.1 0.1 -0.1 -0.5 0.6 Revenues (% of GDP) 7.1 6.7 7.6 7.9 6.6 7.5 Debt (% of GDP) 38.2 7.0 6.4 6.2 6.0 5.8 Primary balance (% of GDP) 0.1 0.2 0.2 0.0 -0.4 0.7 1 National poverty line 54.4 53.2 51.1 50.3 49.2 48.2 GHG emissions growth (mtCO2e) -0.8 -0.2 0.2 0.2 0.1 0.0 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Projections are based on applying private consumption growth to household consumption, with a neutral distribution. Macro Poverty Outlook / April 2025 81 This outlook reflects information available as of April 10, 2025. 1 2 SOUTH AFRICA Population Poverty million millions living on less than $6.85/day 63.9 34.3 3 4 Life expectancy at birth School enrollment In a fragile and more unpredictable global environment, South years primary (% gross) Africa’s GDP growth is expected to remain subdued at 0.7 per- cent in 2025, notwithstanding some supportive cyclical factors 61.5 96.1 5 6 and easing structural constraints. Growth is insufficient to im- GDP GDP per capita prove socio-economic outcomes, with job creation expected to current US$, billion current US$ remain slow and poverty projected to remain around 63.5 per- cent based on the upper-middle-income line. A large public 400.3 6266.2 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2014 (2017 PPPs). 3/ 2022. debt burden necessitates continued fiscal consolidation. 4/ 2022. 5/ 2024. 6/ 2024. of $6.85. This suggests an increase of roughly 3.9 million more Key conditions and challenges poor people compared to pre-Covid times. Weak job creation has hindered poverty reduction. South Africa's economy has been experiencing prolonged low growth, with GDP increasing by an average of only 0.7 percent over To move away from a path of low growth, high poverty, and the past decade. The population has grown faster than the econo- high unemployment, greater urgency is needed to foster an envi- my, resulting in a decline in real income per capita to 2007 levels. ronment of faster and more inclusive economic growth. Reforms Several structural constraints, such as infrastructure bottlenecks, to address binding structural constraints to growth, strengthen a weak business environment, and low productivity, along with a market competition, and make institutions more efficient are cru- decline in the efficiency of fiscal policy, have impeded economic cial to improving economic performance and the welfare of citi- growth. Increased public spending has contributed to a rapid rise zens. Those reforms require building consensus under a complex in public debt. political context. Socio-economic challenges have intensified over the past decade due to the weak economy, erosion of state capacity exacerbated Recent developments by governance failures, fiscal deterioration, and heightened in- frastructure bottlenecks. Approximately 8 million people in the Despite a substantial improvement in electricity supply, South labor force are unemployed (32.6 percent). Inequality (Gini index Africa’s economy expanded only 0.6 percent in 2024. Growth was of 63) remains among the highest in the world. The bottom 40 mainly underpinned by financial services while output in six of the percent of the population accounts for 11.5 percent of total in- ten sectors contracted. From the spending side, growth was dri- come, while the top 20 percent accounts for 59.9 percent. In ven by stronger consumption and net exports. Leading indicators 2025, it is projected that 63.5 percent of the population will be suggest growth remained subdued in 2025Q1, while recent global living in poverty, based on the upper-middle-income poverty line trade policy shifts have increased uncertainty. FIGURE 1 / Real GDP growth and sectoral contributions to real FIGURE 2 / Actual and projected poverty rates and real GDP per GDP growth capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 6 70 80000 4 60 78000 2 50 76000 0 40 74000 -2 30 72000 -4 20 70000 -6 10 68000 -8 0 66000 1994 1997 2000 2003 2006 2009 2012 2015 2018 2021 2024 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 Agriculture Other sectors International poverty rate Lower middle-income pov. rate Financial services Real GDP Upper middle-income pov. rate Real GDP pc Sources: WDI and World Bank staff estimates. Source: World Bank. Notes: See footnotes in table on the next page. 82 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. The economy continued to struggle to create jobs at a sufficient moderation in the depreciation rate of the rand. GDP growth re- pace, keeping the unemployment rate high. The labor force ex- mains insufficient to substantially boost employment, and socio- panded by 450,000 individuals while 355,000 jobs were created. economic indicators are expected to remain weak. Consequently, With rising interest payments, weak revenue growth and persisting the poverty rate, based on the UMIC poverty line, is expected to re- expenditure rigidities, the fiscal balance widened to 5.9 percent of main around 63.5 percent between 2025 and 2027, with the pover- GDP from 5.5 percent in 2023. In concert, the public debt ratio in- ty headcount increasing to 41.8 million in 2027. creased to 76.3 percent of GDP. Weaker import demand drove the current account deficit to narrow from 1.6 percent of GDP in 2023 Notwithstanding high gold prices and a decline in international oil to 0.6 percent. On a subdued inflation environment, the central prices, sharply lower metal prices could translate to less favorable bank (SARB) reduced its policy rate by a cumulative 75 basis points terms of trade, leading the current account deficit to widen to 1.1 since September. Headline inflation averaged 4.4 percent in 2024, percent of GDP in 2025. within the midpoint of the 3-6 percent target. The fiscal balance is projected to widen to 6.5 percent of GDP, amid added wage pressures and a higher interest bill, before narrowing Outlook from 2026 onwards as the Eskom debt relief ends. The public debt is projected to rise to 78.8 percent of GDP, exacerbated by weak- Reflecting a weak outlook for major trading partners and low po- er growth. Strengthening efficiency of public spending, limiting in- tential growth, the economy is expected to expand by 0.7 percent crease of the wage bill and improving monitoring mechanisms, re- in 2025, before growing on average by 1 percent in the medium mains critical to support fiscal consolidation. term. The outlook is highly uncertain due to the unfolding trade policy changes. Although only 7 percent of exports go to the US, of Risks to the outlook are significant. Escalating global trade tensions which about 36 percent are exempted from the new tariff regime, and a worse global outlook could weaken growth prospects fur- indirect effects are expected to compound the impact on growth. ther. Domestic risks may arise from factors that may affect the Progress on structural reforms remains crucial for sustaining private sector’s expansion and the government’s ability to ensure growth. However, the impasse on the 2025 budget highlights diffi- fiscal sustainability, such as the pace of structural reforms and culties in reaching consensus within the ruling Government of Na- unbudgeted expenditure pressures. Climate shocks, geopolitical tional Unity. Inflation is projected to be around 4 percent in 2025, risks, and vulnerabilities in global financial markets could also neg- influenced by lower global oil prices and stable food costs, and a atively impact the baseline outlook. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 1.9 0.7 0.6 0.7 1.1 1.3 Private consumption 2.5 0.7 1.0 1.3 1.2 1.2 Government consumption 0.6 1.9 0.4 1.2 0.2 0.2 Gross fixed capital investment 4.8 3.9 -3.7 -1.4 3.6 4.2 Exports, goods and services 6.8 3.7 -2.0 -1.1 2.8 3.1 Imports, goods and services 15.0 3.9 -6.3 0.3 3.7 3.8 Real GDP growth, at constant factor prices 1.9 0.7 0.6 0.7 1.1 1.3 Agriculture 2.0 -4.8 -8.0 7.4 2.0 2.0 Industry -2.6 -0.4 -0.4 -1.0 0.9 1.3 Services 3.4 1.2 1.2 0.9 1.1 1.2 Employment rate (% of working-age population, 15 years+) 39.0 40.8 41.2 40.8 40.9 41.0 Inflation (consumer price index) 6.9 6.0 4.4 4.1 4.6 4.6 Current account balance (% of GDP) -0.5 -1.6 -0.6 -1.1 -1.7 -2.0 Net foreign direct investment inflow (% of GDP) 1.7 1.7 0.9 0.3 1.2 1.5 1 Fiscal balance (% of GDP) -3.6 -5.5 -5.9 -6.5 -5.5 -5.3 Revenues (% of GDP) 28.1 27.5 27.2 27.6 27.6 27.7 Debt (% of GDP) 70.5 74.1 76.3 78.8 80.5 81.7 Primary balance (% of GDP) 0.9 -0.4 -0.7 -1.0 0.1 0.3 2,3 International poverty rate ($2.15 in 2017 PPP) 22.1 22.3 22.4 22.5 22.5 22.4 2,3 Lower middle-income poverty rate ($3.65 in 2017 PPP) 41.9 42.1 42.3 42.4 42.4 42.4 2,3 Upper middle-income poverty rate ($6.85 in 2017 PPP) 63.1 63.3 63.4 63.5 63.5 63.4 GHG emissions growth (mtCO2e) 0.2 -2.1 -2.0 1.7 0.9 0.9 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ The Eskom debt-relief arrangement is reported above the line, in expenditures. 2/ Calculations based on 2014-LCS. Actual data: 2014. Nowcast: 2015-2024. Forecasts are from 2025 to 2027. 3/ Projection using neutral distribution (2014) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU. Macro Poverty Outlook / April 2025 83 This outlook reflects information available as of April 10, 2025. 1 2 SOUTH SUDAN Population Poverty million millions living under natl. poverty line 11.9 8.4 3 4 Life expectancy at birth School enrollment An acute macroeconomic and fiscal crisis triggered by the years primary (% gross) closure of a key oil route through conflict-affected Sudan is being further exacerbated by lower global oil prices, with 55.6 81.9 5 6 GDP projected to contract by more than 30 percent in GDP GDP per capita 2025. High inflation, cuts in aid, and public sector salary current US$, billion current US$ arrears, amid severe fiscal strains, exacerbate extreme poverty and food insecurity. Elevated political tensions also 6.5 543.9 Sources: WDI, MFMod, and official data. 1/ 2022. 2/ 2022. 3/ 2022. 4/ 2022. 5/ 2024. present risks to the 2018 peace agreement. 6/ 2024. a decline in GDP and exacerbated the humanitarian crisis in the Key conditions and challenges country. Food insecurity affects nearly half the population, with over two million children at risk of malnutrition (IPC, 2024). Poverty As the world’s youngest nation, South Sudan faces numerous so- is widespread and remains among the highest in the world. cio-economic challenges due to nascent institutions, weak gover- nance, systemic fragility, and high dependence on external support for basic services. These issues are further exacerbated by recur- Recent developments rent conflict and climate shocks. Amid macroeconomic instabili- ty, political uncertainty has increased with the repeated postpone- Oil production dropped from nearly 160,000 barrels per day (bpd) ment of elections resulting in a delayed political transition, contrary prior to the oil pipeline shutdown to an average of 60,000 bpd the to the expectations of the 2018 peace agreement (R-ARCSS). year after, leading to a 7.2 percent drop in GDP in FY24. The con- flict in Sudan has disrupted trade routes and triggered the influx South Sudan's dependency on oil -which accounts for over 60 per- of over 1 million refugees and returnees. Nonetheless, returnee cent of its GDP, 99 percent of exports and 90 percent of gov- households have engaged in farming, which boosted agriculture ernment revenues- makes it vulnerable to price and production output and prevented an even more severe contraction. The coun- shocks. The shutdown of the Dar Blend oil export pipeline in Febru- try is in the grip of high inflation, driven by currency depreciation, ary 2024, which transported 60 percent of the country’s oil through supply disruptions, and monetization of the fiscal deficit. Poverty war-torn Sudan, led to a collapse in domestic oil production, deep- has increased to 92 percent in FY24, representing close to an addi- ening the macroeconomic crisis. tional 2.6 million people falling into poverty. Even prior to the oil shutdown, multiple, overlapping shocks such Domestic demand declined amid high inflation and growing strain as the COVID-19 pandemic and catastrophic flooding - which dis- on public finances. The fiscal balance shifted from surplus in FY23 placed 330,000 people in 2024 alone - had already contributed to to deficit in FY24, despite the accumulation of nearly 13 months of FIGURE 1 / Exchange rate developments FIGURE 2 / Actual and projected poverty rate and real GDP per capita SSP/US$ Percent Poverty rate (%) Real GDP per capita (constant LCU) 6000 300 100 1400 90 5000 250 1200 80 4000 200 70 1000 60 800 3000 150 50 40 600 2000 100 30 400 1000 50 20 200 10 0 0 0 0 2022 2023 2024 2025 2026 2027 National poverty rate Real GDP pc Premium (rhs) Official EXR (lhs) Parallel EXR (lhs) Source: Ministry of Petroleum. Source: World Bank. Notes: See footnotes in table on the next page. 84 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. public salary arrears that weighed on household consumption. The recovery in oil production is expected to support a The sharp drop in oil revenues led to the resumption of mone- growth rebound in FY26 (41.0 percent) and reduce the cur- tary financing of the deficit and put pressure on already inade- rent account deficit, although recovery would be slower than quate spending on essential public services like health and ed- previously expected due to the delays in DPOC resumption. ucation. To conserve resources, financing for the opaque oil-for- Longer-term growth is expected to be modest as oil pro- roads scheme has been curtailed, leading to a 4.3 percent of GDP duction stabilizes at lower than pre-shutdown levels, amid drop in capital expenditure. maturing oil fields and inadequate maintenance and invest- ment. Inflation should average 180 percent in FY25 and re- Lower oil production coupled with a decline in oil prices associated main high in FY26 as deficit monetization continues, but with currently heightened global economic uncertainty is expected gradually ease in FY27 as foreign exchange inflows improve to push the current account into an 9.2 percent of GDP deficit and monetary policy tightens. in FY25, and worsen fiscal strains. Market-based foreign exchange auctions, which had facilitated currency unification in 2021, were Lower oil revenues, alongside the anticipated clearance of salary suspended between October 2024 and January 2025. As a result, arrears, would keep the fiscal deficit high in FY26. Given limited fi- the official currency has depreciated by around 260 percent since nancing sources and amid slower pace of deficit monetization, the the DPOC shutdown, and a sizable and persistent parallel market deficit is expected to narrow to 1.7 percent in FY27. Declining glob- premium has emerged. al aid is expected to continue to impact social spending which is largely financed by external donors. Outlook Key downside risks include lower-than-expected revenues due to long-running practices of pre-selling oil, slower pace of oil ex- The economy is projected to contract for the fifth consecutive port resumption, and further weakness in global oil prices due year, but with a steep drop of over 30 percent in FY25. Although to global trade shocks. Major risks are also presented by cli- neighboring Sudan lifted the force majeure on oil transportation mate shocks. The non-fulfillment of the peace agreement would in January 2025, full resumption of oil exports through the re- worsen domestic tensions, heighten risks of conflict and add to stored DPOC pipeline from Port Sudan is expected to take time. already acute governance, macroeconomic and service delivery Real GDP per capita in FY25 is expected to decline to half its val- challenges. This highlights the urgency for bold reforms to ad- ue in FY20, with poverty and vulnerability being near universal at dress fiscal pressures, reduce inflation, and implement the 2018 national standards. peace agreement. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices -2.3 -1.3 -7.2 -34.7 41.1 21.2 Agriculture -1.8 -1.7 8.0 0.5 1.0 2.0 Industry -4.8 -4.3 -11.6 -50.0 77.6 31.1 Services 1.7 3.6 2.3 -2.9 1.1 2.0 Inflation (consumer price index) 22.0 18.0 35.0 179.8 66.4 16.8 Current account balance (% of GDP) 4.7 6.1 4.0 -9.2 -4.6 0.0 Net foreign direct investment inflow (% of GDP) 1.0 0.6 1.7 4.7 3.3 3.2 Fiscal balance (% of GDP) -5.9 3.3 -6.6 -7.8 -7.2 -1.7 Revenues (% of GDP) 28.8 32.7 26.7 18.1 24.3 27.8 Debt (% of GDP) 56.9 39.5 46.0 55.6 56.4 56.2 Primary balance (% of GDP) -3.8 3.7 -6.6 -5.7 -5.7 -0.5 1,2 National poverty line 75.9 83.9 92.1 99.8 100.0 99.9 GHG emissions growth (mtCO2e) 0.2 0.9 0.9 0.0 1.7 1.4 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2022 HBS. Actual data: 2022. Nowcast: 2023-2024. Forecasts are from 2025 to 2027. 2/ Projection using microsimulation. Macro Poverty Outlook / April 2025 85 This outlook reflects information available as of April 10, 2025. 1 2 SUDAN Population Poverty million millions living on less than $3.65/day 49.4 19.3 3 4 Life expectancy at birth School enrollment Two years since the conflict started, Sudan continues to face years primary (% gross) a worsening economic, social, and humanitarian crisis. The ongoing violence has resulted in the world’s largest displace- 65.6 77.8 5 6 ment crisis, severe food insecurity and famine, and a col- GDP GDP per capita lapse of economic activity, state capacity, and critical infra- current US$, billion current US$ structure. Without swift conflict resolution and better aid ac- cess, the country faces generational human capital losses, 49.9 1011.2 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2014 (2017 PPPs). 3/ 2022. perpetuating poverty and undermining any future recovery. 4/ 2018. 5/ 2024. 6/ 2024. disease outbreaks—including cholera, dengue fever, and malar- Key conditions and challenges ia—severely impact the most vulnerable populations, further exacerbated by the destruction of health, water, sanitation, and Prior to the outbreak of the conflict in April 2023, Sudan faced a se- hygiene infrastructure. vere macroeconomic crisis, driven by a 75 percent revenue loss af- ter South Sudan’s separation and further exacerbated by limited in- The collapse of public institutions has disrupted spending, while vestment in physical and human capital, stalled structural reforms displacement and reduced economic activity have shrunk the tax and high vulnerability to climate related shocks. base, sharply lowering revenues. The conflict also disrupted offi- cial data production by key government institutions, such as the The conflict has worsened existing challenges, resulting in signifi- Central Bank, Ministry of Finance and Economic Planning, and the cant human losses, economic damage, and a decline in state ca- Central Bureau of Statistics. pacity. This has led to the collapse of local markets, essential infra- structure, and key public services like health and education. Conse- quently, the services and industrial sectors in Khartoum have been Recent developments severely impacted. GDP is estimated to have contracted by 13.5 percent in 2024 fol- Sudan is experiencing the world’s worst displacement crisis, with lowing a 29 percent contraction in 2023. Critical shortages of seeds, 12.9 million people forcibly displaced—seeking refuge both inter- fertilizers, and fuel, along with disrupted trade routes, have signif- nally and across borders since the conflict erupted in April 2023, icantly hindered food production and distribution causing an esti- heightening the risk of instability in a fragile region. Famine is mated 7.6 percent contraction in the agriculture sector in 2024. The widespread affecting 10 areas, with approximately 24.6 million industrial sector has declined by 13 percent, reflecting damage to people acutely food insecure, and 638,000 people—the highest infrastructure, factories and disruptions in supply chains. Services, number globally—facing catastrophic levels of hunger. Multiple heavily concentrated in Khartoum, declined by 22 percent. Private FIGURE 1 / Real GDP growth and sectoral contributions to real FIGURE 2 / Actual and projected poverty rates and real GDP per GDP growth capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 15 100 800 10 90 700 5 80 600 0 70 -5 60 500 -10 50 400 -15 40 300 -20 30 200 -25 20 10 100 -30 0 0 -35 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2018 2019 2020 2021 2022 2023 2024 2025 2026f 2027f International poverty rate Lower middle-income pov. rate Agriculture Industry Services Real GDP Upper middle-income pov. rate Real GDP pc Sources: Central Bureau of Statistics and World Bank staff estimates. Source: World Bank. Notes: See footnotes in table on the next page. 86 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. consumption is estimated to have dropped by 16 percent due to is expected to recover by 5 percent in 2025, with a stronger income losses and mass displacement. rebound in 2026, as security improves, and services recover. Due to the household survey being over a decade old, and The shrinking tax base and decline in fiscal revenues (to 4.1 percent the recent conflict, there is significant uncertainty in forecasting of GDP in 2024) resulted in reduced government spending, includ- poverty. Nevertheless, extreme poverty is anticipated to remain ing substantial cuts to salaries and current transfers. The current high in the medium term. account deficit is estimated to have widened to 12 percent of GDP in 2024, as bank collapses impacted remittances, which reported- Inflation is expected to remain in double digits due to continued ly declined by $4 to $6 billion since the conflict started. Exports in- budget deficit monetization in the near term but is expected to creased to 10 percent of GDP in 2024, primarily as the government gradually ease as supply capacity improves and monetization is regained control over mining areas. Imports, however, declined in phased out. The current account deficit is projected to narrow, with line with domestic demand. stronger exports and remittances. The country continues to experience hyperinflation, with prices ris- Should the conflict be resolved, the fiscal outlook is expected to im- ing by 188 percent (year-on-year) in December 2024, indicating the prove, as revenue collection recovers, although revenues will likely severe depreciation of the Sudanese Pound (which devalued by remain below pre-conflict levels. Public debt is projected to decline 233 percent in official markets and 355 percent in the parallel mar- but stay elevated, with longer term fiscal sustainability depending ket since April 2023), and conflict-related disruptions to food, hous- on structural reforms and debt relief. ing, transport, and trade. Extreme poverty, defined as the share of the population living with less US$2.15 a day has more than dou- Recovery to pre-conflict GDP levels will take years to ma- bled from 33 percent in 2022 to 71 percent in 2024. To restore terialize due to economic scarring and capital losses, with banking functionality, the central bank established a joint portfolio the pace hinging on reconstruction and reforms. Delays in with commercial banks to fund essential imports and issued a new conflict resolution and rising tensions, including the RSF's 1000-pound note to combat counterfeiting and limit cash outside declaration of a parallel government, pose significant risks the banking system, though this has led to liquidity constraints, to the outlook. negatively impacting donor activities. Although direct effects from global trade policy shifts are likely limited due to minimal trade ties, broader spillovers Outlook remain uncertain. Sudan would benefit from lower oil prices and higher gold prices, however tighter fiscal space Sudan’s economic outlook remains highly uncertain and faces in key partners could hinder availability of support for major risks. Assuming the conflict is resolved in 2025, GDP post-conflict reconstruction. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices -1.0 -29.4 -13.5 5.0 9.3 4.1 Private consumption -0.8 -28.4 -16.2 3.7 6.8 2.5 Government consumption 1.9 -27.1 -0.6 4.8 23.2 13.9 Gross fixed capital investment 1.2 -20.0 -15.0 2.0 4.0 2.0 Exports, goods and services 12.0 -37.1 16.4 18.8 8.0 10.0 Imports, goods and services 8.7 -12.7 -21.5 -8.0 4.0 6.0 Real GDP growth, at constant factor prices -1.0 -28.5 -13.5 5.0 9.3 4.1 Agriculture 1.0 -14.9 -7.6 4.7 8.5 4.4 Industry -0.7 -25.8 -13.1 2.0 7.5 3.7 Services -3.0 -43.2 -22.0 8.9 12.4 4.2 Employment rate (% of working-age population, 15 years+) 40.0 37.7 37.7 37.7 37.7 37.7 Inflation (consumer price index) 164.2 65.8 170.0 89.4 33.1 20.0 Current account balance (% of GDP) -6.0 -6.2 -12.0 -4.8 -1.5 3.6 Net foreign direct investment inflow (% of GDP) -1.3 -0.7 -1.4 -1.1 -0.9 -1.0 Fiscal balance (% of GDP) -1.7 -3.8 -4.1 -3.7 -3.7 -3.4 Revenues (% of GDP) 10.0 4.8 4.7 5.6 6.2 6.8 1 Debt (% of GDP) 183.6 167.3 147.4 142.7 124.2 106.4 Primary balance (% of GDP) -1.6 -3.7 -4.0 -3.6 -3.6 -3.3 2,3 International poverty rate ($2.15 in 2017 PPP) 33.3 59.1 71.0 69.2 65.1 63.8 2,3 Lower middle-income poverty rate ($3.65 in 2017 PPP) 69.9 87.5 91.9 91.3 89.8 89.4 2,3 Upper middle-income poverty rate ($6.85 in 2017 PPP) 93.6 97.8 98.5 98.4 98.2 98.1 GHG emissions growth (mtCO2e) -0.3 -1.8 -2.2 1.0 3.2 0.8 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Debt projections do not include any restructuring achieved during the HIPC process. 2/ Calculations based on 2014-NBHS. Actual data: 2014. Nowcast: 2015-2024. Forecasts are from 2025 to 2027. 3/ Projection using neutral distribution (2014) with pass-through = 1 (High (1)) based on GDP per capita in constant LCU. Macro Poverty Outlook / April 2025 87 This outlook reflects information available as of April 10, 2025. 1 2 TANZANIA Population Poverty million millions living on less than $2.15/day 68.6 25.8 3 4 Life expectancy at birth School enrollment Tanzania maintained macroeconomic stability supported years primary (% gross) by prudent macroeconomic management, natural endow- ments, and favorable demographics. Growth accelerated 66.8 93.1 5 6 to 5.5 percent in 2024 due to increased exports, favorable GDP GDP per capita weather, and improved access to electricity. Growth is current US$, billion current US$ expected to accelerate further, but uncertainty to this outlook increased with global policy risks. Poverty at the 78.8 1149.1 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2018 (2017 PPPs). 3/ 2022. International Poverty Line was estimated at 42.9 percent. 4/ 2023. 5/ 2024. 6/ 2024. workers in the low-productivity agriculture sector. While poverty Key conditions and challenges remains predominantly rural, poverty rose relatively faster in ur- ban areas post-Covid. Although Tanzania has urbanized faster than Tanzania has built a track record of macroeconomic stability even its neighbors, migration to towns and cities has not been an engine amid serious economic shocks. Growth remained robust, fiscal bal- for poverty reduction. ances manageable, and inflation below targets despite the interna- tional disruptions that characterized the early 2020s. High natur- al endowments and favourable demographics support high invest- Recent developments ment levels that strongly contributed to growth. Growth accelerated in 2024 promoted by expanding exports, a Tanzania nevertheless contends with structural and policy barriers good agricultural season, and increased electricity supply. Higher to accelerating inclusive growth. High government investment in global demand for Tanzanian goods like gold, tourism, and agricul- infrastructure, combined with below-potential domestic resource tural commodities improved terms of trade. Tanzanian production mobilization limits fiscal space for expanding crucial public ser- was able to meet additional demand as an enhanced business en- vices. Strengthening the business environment is a policy priority vironment had led to investments increasing productive capacity. for growth acceleration. Supporting the country’s external re- Tanzania’s current account deficit likely narrowed to 2.3 percent of silience through a more flexible exchange rate regime, which is cur- GDP in 2024, a long-term sustainable level given the increased lev- rently characterized by a preference for asymmetric exchange rate els of FDI and highly concessional finance Tanzania attracts. flexibility, is a macroeconomic policy area that can be improved. Electricity supply grew rapidly in 2024 with the Julius Nyerere Economic growth has been concentrated in few sectors with lim- Hydropower Plant adding capacity to the growing grid. The first ited workforce absorption and scant wage employment creation. phase of Tanzania’s largest investment project—the Standard- Slow structural transformation has kept two-thirds of Tanzanian gauge Railway (SGR) across the country and into neighbouring FIGURE 1 / Real GDP growth and contributions to real GDP growth FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant million LCU) 10 100 2.5 8 90 6 80 2.0 70 4 60 1.5 2 50 0 40 1.0 -2 30 20 0.5 -4 10 -6 0 0.0 2022 2023 2024 2025 2026 2027 2011 2013 2015 2017 2019 2021 2023 2025 2027 GFCF Imports Exports International poverty rate Lower middle-income pov. rate Private cons. Gov. cons. GDP Upper middle-income pov. rate Real GDP pc Source: World Bank staff estimates and projections (2020-2026). Source: World Bank. Notes: See footnotes in table on the next page. 88 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. Burundi —also started operating passenger services between Dar disruptions in development assistance, and increased uncertainty es Salaam, the commercial hub, and the capital Dodoma. Cargo on global trade policy. The conflict in DRC affects Tanzania's export services are yet to commence highlighting the need for an inte- and transport sectors since traffic to the DRC has historically ac- grated transport policy approach. counted for 14 percent of volumes at Tanzania’s largest port. The disruption of development assistance will negatively impact Tanza- While El Niño led to droughts in many neighbouring countries, Tan- nia’s economy, especially the health sector. While direct and indi- zania enjoyed above-average rains, record harvests, and a boost to rect effects of recent trade policy shifts have caused a downward downstream sectors. Large harvests also depressed domestic food shift in growth projections, continued uncertainty and weaker than prices, leading to significant welfare gains for the poorest and en- expected global demand may further adversely affect Tanzania’s hanced food security. Overall inflation also remained low amidst growth prospects. moderate monetary tightening. Additionally, the economy closing in on its potential tightened the labour market. Poverty at the Interna- Policy risks include Tanzania’s increased spending ambitions tional Poverty Line of US$2.15 2017 PPP/day (about 2,080 nominal against the background of still weak domestic revenue mobiliza- TSH in 2024) is estimated to have decreased to 42.9 percent in 2024. tion. While double digit increases in planned expenditures in the next two years are an opportunity to enhance service delivery and avoid underinvestment in human capital in the face of uncertain Outlook donor support, they also necessitate careful prioritisation, partic- ularly in public investment, and improvements in revenues to en- Secular effects are expected to drive continued economic expan- sure fiscal and macroeconomic sustainability. sion and macroeconomic stability. Abundant opportunities, includ- ing in the extractives sector, improvements to the business envi- Real per capita growth of 2 to 3 percent is expected to reduce the ronment, and the increasing use of public-private partnerships will poverty rate to 41.0 percent by 2027, though there is a downside risk drive investment and thus spur economic growth. Simultaneously, to global economic growth due to the U.S. tariffs. This is driven more macroeconomic risks are expected to be contained through pru- by growth in the service and industry sectors, and less by agriculture. dent macroeconomic decision making. In addition to mitigating risks to the overall economy negatively im- pacting vulnerable populations, it is important to improve the re- However, three prominent external risks emerged in early 2025: silience of Tanzanian households through the creation of better- renewed conflict in eastern Democratic Republic of Congo (DRC), quality jobs and strengthening the social safety net system. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 4.6 5.1 5.5 5.7 5.9 6.1 Private consumption 4.6 2.2 3.1 3.4 4.5 6.3 Government consumption 8.4 10.7 9.5 15.1 8.3 4.3 Gross fixed capital investment 9.6 5.7 5.3 6.3 6.6 6.3 Exports, goods and services 10.2 13.2 16.4 5.2 5.7 7.4 Imports, goods and services 23.7 7.5 9.2 6.2 5.7 7.4 Real GDP growth, at constant factor prices 4.6 5.1 5.5 5.7 5.9 6.1 Agriculture 3.3 3.6 4.1 3.5 3.6 3.7 Industry 4.3 4.8 5.2 5.9 7.4 7.5 Services 5.6 6.2 6.7 6.8 6.1 6.5 Employment rate (% of working-age population, 15 years+) 81.5 81.6 82.2 82.6 82.7 82.8 Inflation (consumer price index) 4.4 3.8 3.1 3.6 4.0 4.0 Current account balance (% of GDP) -7.3 -3.8 -2.3 -3.5 -3.3 -3.1 Net foreign direct investment inflow (% of GDP) 1.9 2.1 2.0 1.9 2.1 2.2 Fiscal balance (% of GDP) -3.7 -4.1 -2.8 -3.4 -3.5 -3.1 Revenues (% of GDP) 15.2 14.9 16.1 16.8 16.8 16.9 Debt (% of GDP) 44.2 46.0 50.3 51.2 50.1 49.1 Primary balance (% of GDP) -1.9 -2.0 -0.3 -0.5 -0.8 -0.5 1,2 International poverty rate ($2.15 in 2017 PPP) 43.9 43.5 42.9 42.3 41.7 41.0 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 73.6 73.2 72.8 72.3 71.8 71.3 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 91.3 90.9 90.3 89.8 89.2 88.5 GHG emissions growth (mtCO2e) 0.4 0.7 0.9 1.1 1.1 1.2 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2009-, 2024-, and 2018-HBS. Actual data: 2018. Nowcast: 2019-2024. Forecasts are from 2025 to 2027. 2/ Projection using point to point elasticity at regional level with pass-through = 0.7 based on GDP per capita in constant LCU. Macro Poverty Outlook / April 2025 89 This outlook reflects information available as of April 10, 2025. 1 2 TOGO Population Poverty million millions living on less than $2.15/day 9.5 2.4 3 4 Life expectancy at birth School enrollment Fiscal consolidation efforts and a decelerating external de- years primary (% gross) mand amid rising trade uncertainty are expected to result in growth moderating to 4.9 percent in 2025, from 5.3 percent 61.6 120.2 5 6 in 2024, before recovering gradually in 2026-27. Extreme GDP GDP per capita poverty is projected to decrease by 1.4 percentage points current US$, billion current US$ over the same period. Escalating geopolitical and trade poli- cy uncertainty, debt refinancing pressures, and climate 10.0 1049.6 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2021 (2017 PPPs). 3/ 2022. shocks are key downside risks to this outlook. 4/ 2023. 5/ 2024. 6/ 2024. Key conditions and challenges Recent developments Togo’s economy has been resilient, with annual growth av- GDP growth is estimated to have slowed to 5.3 percent in 2024 (3 eraging 6.1 percent between 2021 and 2023, thanks to fis- percent in per capita terms). On the demand side the government cal stimulus measures implemented in the post-COVID pe- focused on rapid fiscal deficit reduction and external demand de- riod and robust private investment. However, high inflation celerated, while private investment and consumer spending were and disparities in access to basic services between rural and the main drivers of growth, aided by a drop in inflation to 2.9 per- urban areas have hindered poverty reduction, while fiscal cent in 2024 (from 5.3 percent in 2023). On the supply side, indus- space has been strained by growing transfers and high lev- trial activity moderated while the services and agriculture sectors els of capital spending. helped maintain growth close to its decade-average (5.1 percent). The international extreme poverty rate, measured at $2.15, 2017 The medium-term outlook remains positive in Togo, but in- PPP threshold for low-income countries, is estimated to have de- creased global headwinds and fiscal consolidation efforts are ex- clined to 24.8 percent in 2024 from 26.0 percent in 2023. pected to result in a temporary slowdown. Boosting the coun- try’s growth potential and tackling global trade policy uncertain- Expenditure cutbacks and revenues-boosting efforts reduced the ty would require strengthening Togo’s attractiveness as a trade budget deficit from 6.6 percent of GDP in 2023 to 4.5 (6.1 percent and investment hub, improving agriculture productivity, enhanc- including recapitalization of the state-owned bank UTB - Union To- ing access to energy, and strengthening resilience to climate and golaise de Banque) although security spending to address northern economic shocks. border instability with Burkina Faso remained high. The budget FIGURE 1 / Revenues, expenditures, and deficit FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent of GDP Percent of GDP Poverty rate (%) Real GDP per capita (constant LCU) 30 4 100 700000 2 90 25 600000 80 0 70 500000 20 60 400000 -2 15 50 -4 40 300000 10 30 200000 -6 20 5 100000 -8 10 0 0 0 -10 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 International poverty rate Lower middle-income pov. rate Budget deficit (rhs) Revenues (lhs) Expenditures (lhs) Upper middle-income pov. rate Real GDP pc Source: World Bank. Source: World Bank. Notes: See footnotes in table on the next page. 90 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. deficit was financed primarily through issuances on the WAEMU re- the current account deficit broadly stable around 3 percent of gional debt market, with a shift to shorter-dated securities and ris- GDP in 2026-27 amidst trade policy uncertainties. The regional ing yields. The current account deficit (CAD) stabilized at 3.2 per- inflation rate is expected to align with the WAEMU target band cent of GDP in 2024, as slower export growth was offset by im- from 2025 onwards, while regional reserves are projected to rise proved terms of trade and rising remittances. to 5.4 months of imports in 2025, supported by recovering ex- ports, and lower Euro Area interest rates. The WAEMU inflation rate declined further in 2024 to 3.5 percent, above the 1-3 percent WAEMU target band. Regional foreign re- The 2025 budget aims to reduce the deficit to 3 percent of GDP serves increased from 3.5 months of imports in 2023 to 4.7 months and maintain it at that level in subsequent years, aligning with in 2024, reflecting the resumption of international bond issuances, WAEMU and IMF program targets. Total revenue is projected to and IMF and World Bank disbursements. The Central Bank of West increase by 0.5 percent of GDP per year with the implementation African States maintained its policy interest rates throughout 2024 of tax and customs reforms as well as reduced tax exemptions. at 3.5 percent for liquidity calls and 5.5 percent for the marginal Combined with cuts in public investment and transfers, these lending facility. measures will help lower public debt to 66.7 percent of GDP in 2026 and 65.2 percent in 2027. Despite these efforts, high refi- nancing needs and domestic debt service costs will continue to Outlook represent a source of fiscal vulnerability. Economic growth is expected to moderate further to 4.9 percent The outlook is subject to growing downside risks. In particular, fur- in 2025, as fiscal consolidation efforts and trade policy uncer- ther global trade policy uncertainty and regional insecurity could tainty will tend to dampen both domestic and external demand. have more severe effects on the growth prospects than currently Ongoing private investment projects and a continued recovery envisaged, while potentially slowing the pace of budget deficit and in consumer spending will support aggregate demand. Assuming public debt reduction in coming years. Moreover, climate shocks global policy uncertainty dissipates, growth will strengthen to 5.4 represent an ongoing threat that could impact food security and percent in 2026 and 5.5 percent in 2027. In this context, the ex- amplify fragility risks in more exposed rural areas. In contrast, a treme poverty rate is projected to decline further to 20.5 percent faster-than-expected easing of financing conditions and reform im- by 2027. Import demand and exports should moderate, leaving plementation could stimulate private investment. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 5.8 6.4 5.3 4.9 5.4 5.5 Private consumption 4.7 4.3 5.4 5.4 5.0 4.8 Government consumption 7.2 6.3 5.7 1.4 6.8 6.0 Gross fixed capital investment 11.3 12.0 4.4 5.1 6.4 8.0 Exports, goods and services 2.8 6.8 5.8 5.4 5.8 7.0 Imports, goods and services 5.3 5.8 5.4 5.2 6.0 7.0 Real GDP growth, at constant factor prices 6.3 6.6 5.3 4.9 5.4 5.5 Agriculture 5.1 4.2 4.1 4.5 4.5 4.9 Industry 6.4 6.7 4.2 3.9 6.2 7.0 Services 6.8 7.6 6.2 5.4 5.4 5.1 Employment rate (% of working-age population, 15 years+) 57.0 57.0 56.7 56.7 56.7 56.8 Inflation (consumer price index) 7.5 5.3 2.9 2.6 2.7 2.4 Current account balance (% of GDP) -3.0 -3.3 -3.2 -3.2 -3.1 -3.0 Net foreign direct investment inflow (% of GDP) 0.3 0.4 0.4 0.5 0.5 0.5 Fiscal balance (% of GDP) -8.3 -6.6 -6.1 -3.0 -3.0 -3.0 Revenues (% of GDP) 17.8 18.2 19.0 19.4 19.2 19.4 Debt (% of GDP) 67.1 67.2 69.7 68.4 66.7 65.2 Primary balance (% of GDP) -5.8 -4.4 -3.4 -0.5 -0.5 -0.5 1,2 International poverty rate ($2.15 in 2017 PPP) 26.2 26.0 24.8 23.4 21.9 20.5 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 58.2 57.1 55.9 54.1 52.5 50.4 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 86.8 86.1 85.6 84.7 83.8 82.4 GHG emissions growth (mtCO2e) 2.6 2.5 5.0 5.2 5.3 5.0 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2021-EHCVM. Actual data: 2021. Nowcast: 2022-2024. Forecasts are from 2025 to 2027. 2/ Projections using microsimulation methodology. Macro Poverty Outlook / April 2025 91 This outlook reflects information available as of April 10, 2025. 1 2 UGANDA Population Poverty million millions living on less than $2.15/day 50.0 18.1 3 4 Life expectancy at birth School enrollment Uganda’s economy remained resilient, supported by years primary (% gross) broad-based growth in services, industrial, and agricultural sectors. Headline inflation declined, driven by declining 63.6 105.5 5 6 food prices, tight monetary policy, and a stable exchange GDP GDP per capita rate. However, both fiscal deficit and external sector ba- current US$, billion current US$ lance remain high, posing a key challenge in case oil pro- duction stands delayed. Poverty is high but could decline 46.6 931.1 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2019 (2017 PPPs). 3/ 2022. if oil revenues are invested in human capital. 4/ 2017. 5/ 2024. 6/ 2024. more in human capital, alongside measures to reduce inequal- Key conditions and challenges ity and strengthen resilience, can reduce poverty. Maintaining prudent macroeconomic management, adhering to the fiscal In recent years, the speed of reforms slowed down hindering rules in the Charter of Fiscal Responsibility, enhancing revenue Uganda's economic growth and poverty reduction efforts. mobilization, and avoiding “Dutch disease” are crucial in antici- Poverty estimates show that 42 percent of Ugandans were be- pation of oil revenues. low the poverty line (US$2.15 2017PPP) in 2019/2020. Persis- tent human capital deficit and a significant productive jobs agenda given a growing working-age population, remain key Recent developments challenges. The services sector, despite its significant GDP share, has low job intensity compared to the agricultural sec- Growth accelerated to 6.1 percent in FY24 up from 5.3 percent in tor, which employs two-thirds of the workforce and faces low FY23. Net exports have been the key driver along with stronger productivity, limited modernization, and climate vulnerability public sector investment, particularly in the oil sector. Robust glob- with minimal adaptation efforts. al demand and easing supply chain disruptions provided further impetus to growth. To promote economic growth and reduce poverty, Uganda should focus on structural transformation, shifting labor to Headline and core inflation declined to 3.2 and 3.0 percent, respec- more productive employment, and increasing agricultural pro- tively, in FY24, from 8.8 and 7.4 percent in FY23, remaining below ductivity where the poor are concentrated. Reforms should the Central Bank target of 5 percent. This decline was supported stimulate private sector investment by lowering business costs, by favorable weather conditions leading to lower food crop prices, improving access to finance, and promoting digital and innov- which grew by 3.3 percent in FY24 compared to 22.7 percent in ative technologies. The government must rebalance fiscal con- FY23, easing global economic conditions, exchange rate stability solidation by shifting spending into social sectors. Investing and tight monetary policy. FIGURE 1 / Real GDP growth and contributions to real GDP growth FIGURE 2 / Actual and projected poverty rates and real private consumption per capita Percent, percentage points Poverty rate (%) Real private consumption per capita (constant million LCU) 15 100 3.0 12 Annual average growth 90 9 2.5 80 6 70 2.0 3 60 0 50 1.5 -3 40 1.0 -6 30 20 0.5 -9 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 10 0 0.0 FY18 '19 '20 '21 '22 '23 '24 '25 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 Agriculture Industry Services International poverty rate Lower middle-income pov. rate Net taxes Real GDP Upper middle-income pov. rate Real priv. cons. pc Source: Bureau of Statistics (UBOS). Source: World Bank. Notes: See footnotes in table on the next page. 92 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. The current account deficit (CAD) remained elevated at 7.7 percent surplus in FY27. Continued implementation of the domestic rev- in FY24, up from 7.4 percent in FY23. Further worsening of the CAD enue mobilization strategy is projected to generate additional tax was driven by increased import demand for infrastructure pro- revenue, estimated at 0.5 and 1.3 percent of GDP in FY25 and FY26, jects, oil-related investments and higher freight costs. Even though, respectively. With limited scope to alter tax rates, the focus will be the growth in merchandise exports remained strong, supported by on improving tax administration efficiency through enhanced use higher exports of coffee and gold, trade deficit remained elevated. of technology and improving the fairness of the tax system. Public debt to GDP is projected to moderately rise to 52.7 percent of GDP The fiscal deficit of CG marginally narrowed to 5.1 percent of GDP in FY25 before decreasing to 51 percent in FY27. in FY24 from 5.2 percent in FY23, driven by continued fiscal consoli- dation efforts. The primary deficit decreased by 0.1pp of GDP to 1.6 The CAD as a percent of GDP is expected to remain elevated in percent in FY24, as tax revenues continued to underperform due the near term, reflecting capital imports for oil production. In the to laxed enforcement on the use of the electronic fiscal receipting medium term, the CAD is expected to improve as oil exports com- and invoicing system. Fiscal consolidation has primarily focused on mence, and the oil refinery becomes operational. Export growth is expenditure cuts, mainly capital spending, impacting essential so- further expected to benefit from a recovery in global demand and cial programs. There is an urgent need to improve the quality of increased regional trade, public infrastructure developments are fiscal consolidation by improving spending efficiency and enhanc- likely to drive import growth. Foreign direct investment flows are ing domestic revenue mobilization. Moreover, the fiscal deficit was projected to remain strong in the near term. financed mostly by domestic financing. Poverty projections show that 41 percent of Ugandans were poor in 2024. Poverty is projected to marginally decline in FY25, with the pace of reduction expected to improve as growth accelerates in the medi- um term. If oil revenues are invested in social services, infrastruc- Outlook ture, and human capital, poverty could fall to 38 percent by 2027. Growth is projected to modestly increase to 6.2 percent in FY25, Downside risks for Uganda include a timing mismatch between driven by agriculture and services. Over the medium term, growth oil production and pipeline completion, threatening revenue gen- is projected to accelerate significantly to 10.4 percent in FY27 as oil eration. Reliance on rain-fed agriculture increases vulnerability production begins, before returning to around 6 percent as the oil to climate shocks, potentially derailing poverty reduction without production plateaus. Developments in the oil sector are expected sufficient climate adaptation investment. Export earnings could to drive growth in the medium term, however, uncertainty in glob- be affected by the EU deforestation-related import ban and trade al trade policy could impact investment, and commodity price de- policy uncertainty. Geopolitical tensions in the region and the clines may compound the potential effects of trade uncertainty. Middle East could disrupt global demand and impact economic growth. The 2026 elections pose a risk to budget credibility, po- The primary balance is expected to deteriorate to -2.3 percent in tentially leading to fiscal slippages if spending is not aligned with FY25, improve slightly in FY26, and eventually post a 0.1 percent the approved budget. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 4.7 5.3 6.1 6.2 6.2 10.4 Private consumption 3.4 4.4 4.5 5.5 5.7 6.7 Government consumption -17.4 5.1 12.9 5.0 5.2 6.2 Gross fixed capital investment 20.1 5.5 -6.7 8.9 7.9 17.7 Exports, goods and services -18.6 7.0 38.0 8.4 8.5 14.4 Imports, goods and services -8.9 3.2 4.7 9.0 8.5 8.0 Real GDP growth, at constant factor prices 4.7 5.3 6.1 6.2 6.2 10.4 Agriculture 4.4 5.0 5.4 5.5 5.6 5.8 Industry 5.4 3.9 5.3 5.6 5.6 12.0 Services 4.4 6.3 6.9 6.9 6.8 11.8 Inflation (consumer price index) 3.7 8.8 3.2 3.7 5.0 5.0 Current account balance (% of GDP) -7.9 -7.4 -7.7 -7.1 -6.9 -4.2 Net foreign direct investment inflow (% of GDP) 3.1 5.9 5.7 6.3 6.0 4.6 Fiscal balance (% of GDP) -8.4 -5.2 -5.1 -6.4 -6.5 -5.5 Revenues (% of GDP) 16.4 17.0 15.2 16.6 16.9 18.0 Debt (% of GDP) 56.2 55.4 50.1 52.7 53.7 51.0 Primary balance (% of GDP) -5.0 -1.7 -1.6 -2.3 -1.6 0.1 1,2 International poverty rate ($2.15 in 2017 PPP) 42.1 41.8 41.3 40.7 39.5 38.3 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 71.8 72.0 72.4 72.8 73.7 74.6 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 91.0 91.5 92.3 93.3 95.1 97.0 GHG emissions growth (mtCO2e) 2.3 2.7 2.8 3.0 3.4 4.7 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2016-UNHS and 2019-UNHS. Actual data: 2019. Nowcast: 2020-2024. Forecasts are from 2025 to 2027. 2/ Projection using annualized elasticity (2016-2019) with pass-through = 0.7 based on private consumption per capita in constant LCU. Macro Poverty Outlook / April 2025 93 This outlook reflects information available as of April 10, 2025. 1 2 ZAMBIA Population Poverty million millions living on less than $2.15/day 21.3 13.0 3 4 Life expectancy at birth School enrollment Following a severe drought, Zambia’s economy showed re- years primary (% gross) silience in 2024. It grew at 4.0 percent, driven by mining recov- ery and acceleration in services despite electricity shortages 61.8 94.8 5 6 and low food supply that fueled inflation. Despite the uncertain GDP GDP per capita global environment, growth is expected to average 6.6 per- current US$, billion current US$ cent in 2025-27 due to agricultural recovery, improved min- ing, and services momentum. However, extreme poverty will 26.0 1219.1 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2022 (2017 PPPs). 3/ 2022. remain high due to insufficient per capita income growth. 4/ 2020. 5/ 2024. 6/ 2024. energy sector improvements, should help Zambia achieve long- Key conditions and challenges term fiscal sustainability. At the same time, Zambia has tremen- dous natural resources, and its rich green mineral deposits are Zambia's economy, predominantly reliant on mining and sub- in demand due to the global energy transition. With effective sistence agriculture, faced significant challenges due to cholera fiscal management, Zambia can capitalize on its vast renewable and a severe drought. The ineffectiveness of growth in reduc- and non-renewable natural resources, generating substantial fis- ing poverty contributes to high inequality. Debt restructuring is cal revenues to support growth and pro-poor policies. Howev- nearing completion after four years. However, the protracted er, the country must continue strengthening fiscal management debt restructuring has heightened sovereign risks and dimin- by expanding its narrow tax base and enhancing its natural re- ished foreign direct investment, depreciating the local curren- source management framework. cy and fueling inflation during the drought. This situation has placed Zambia below its growth potential and limited its fi- nancing options. The lack of access to international commercial Recent developments lending has reduced the fiscal capacity needed to implement countercyclical fiscal policies and public investments vital for Despite gloomy predictions for 2024 following the historic growth and poverty reduction. drought, Zambia’s economic activity proved more resilient than expected. Mining production grew for the first time in three Debt restructuring agreements with official bilateral creditors years, rising by 12 percent following resumed operations at in October 2023, international bondholders in June 2024, and Konkola Copper Mine, improvements at Mopani, and increased recent in-principle agreements with two major Chinese private output from several mines. Coupled with growth in construction creditors have resulted in agreements on over 90 percent of and services, this expansion supported real GDP growth, pre- debt expected to be treated. Completing debt restructuring and liminary estimated at 4.0 percent in 2024 (subject to revision). implementing policy reforms, including debt management and Business confidence improved, as evidenced by the Purchasing FIGURE 1 / Inflation, exchange rate, and monetary policy rates FIGURE 2 / Actual and projected poverty rates and real GDP per capita Percent, ZMW/USD Poverty rate (%) Real GDP per capita (constant LCU) 35 100 10000 30 90 9000 80 8000 25 70 7000 20 60 6000 15 50 5000 40 4000 10 30 3000 5 20 2000 0 10 1000 Aug'21 Feb'22 Aug'22 Feb'23 Aug'23 Feb'24 Aug'24 Feb'25 0 0 6-8% target band Headline inflation 2010 2012 2014 2016 2018 2020 2022 2024 2026 Food inflation Non-food inflation International poverty rate Lower middle-income pov. rate Exchange rate (zmw/$) BOZ policy rate Upper middle-income pov. rate Real GDP pc Source: World Bank estimates. Source: World Bank. Notes: See footnotes in table on the next page. 94 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. Managers' Index returning to the expansion zone from Decem- ber 2024, recovering from its lowest point in September. The Outlook rekindling in copper exports, driven by the recovery in produc- tion, helped to reduce the current account deficit despite high Annual real GDP growth is projected at 6.2 percent in 2025 and av- imports of intermediate and capital goods for the mining sector, erage 6.6 percent in 2026-27. This reflects anticipated record agri- as well as maize and electricity due to the drought. cultural harvests on the back of good rainfall in 2025, supporting crop performance, improved reservoir levels, and enhanced elec- Still, the impact of the drought continues, with about 5.8 mil- tricity generation. Over the medium term, growth will benefit from lion individuals estimated to face high acute food insecurity broad-based momentum across agriculture, industry (particularly (the Integrated Food Security Phase Classification, Phase 3 or mining and agrifood processing), and services related to mining, above) between October 2024 and March 2025. Inflation con- agriculture, and tourism. Poverty is expected to resume a down- tinues to edge upward, reaching 16.8 percent in February, ward trajectory, but from a high base and at a slow pace, reaching driven by higher food prices and exchange rate depreciation 62 percent in 2025. Inflation is anticipated to decrease as the food (over 30 percent in 2024)—denting households’ real incomes. supply improves. The Bank of Zambia (BoZ) raised the monetary policy rate by 350 basis points since February 2024, reaching 14.5 percent Key growth drivers include net foreign direct investment inflows in in February 2025. The increase in the statutory reserve ratio the mining sector, restoring debt sustainability, and completing re- by BoZ and the Government consolidating deposits into a forms to support private sector competitiveness and regain macro- single treasury account constrained market liquidity in early economic stability. Investments in mining have reached US$9.3 bil- 2024, reducing government securities subscriptions. Howev- lion since 2023, with additional pledges of US$1.0 billion, aiming to er, liquidity improved in the second half due to the resump- boost copper production to the government's 3 million metric tons tion of open market operations, government payments, and annual target. The shift towards low-carbon energy and the updated higher export earnings. mining fiscal regime also contribute to a positive mining outlook. Private sector credit growth slowed to 20.7 percent year-on- The outlook faces significant risks due to lower global growth amid year by December 2024 from 29.7 percent in September, mainly emerging uncertainty in trade policies. Zambia's direct impacts are due to a sluggish manufacturing industry. Gross international expected to be small. However, indirect effects like volatile commod- reserves increased from 3.4 months of imports in 2023 to 4.1 ity prices, higher business costs, and supply chain disruptions cloud in 2024, supported by mining receipts and external financing the medium term. There are some mitigating factors. Lower oil from multilateral organizations. Preliminary figures show that prices, reflecting the combined effects of global growth concerns the fiscal position improved in 2024 due to revenue recovery and a large increase announced in OPEC production, bode well for from mining expansion and resilient growth despite constrained Zambia’s significant fuel imports and inflation. Copper, the coun- spending on goods, services, and capital amid subdued domes- try’s main export, is currently exempted from reciprocal tariffs, and tic financing. Higher domestic interest payments and resumed prices are expected to remain elevated. Still, adverse climate condi- Eurobonds debt service raised interest payments, further crowd- tions, a sharp reduction in commodity prices, and associated fiscal ing out productive spending. challenges could swiftly worsen fiscal and external balances. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 5.2 5.4 4.0 6.2 6.8 6.4 Private consumption 5.6 5.7 4.3 7.0 7.5 7.0 Government consumption 6.7 7.3 6.6 8.6 9.0 7.7 Gross fixed capital investment 4.5 5.3 3.3 4.9 5.6 5.5 Exports, goods and services 4.6 3.3 3.7 5.0 5.4 5.5 Imports, goods and services 4.0 4.5 3.1 4.0 4.4 4.5 Real GDP growth, at constant factor prices 5.4 5.7 3.8 6.4 6.7 6.3 Agriculture -11.0 -15.9 -9.2 27.4 13.3 13.3 Industry -2.2 1.7 3.5 4.1 6.0 6.8 Services 12.0 10.0 5.0 5.9 6.4 5.5 Employment rate (% of working-age population, 15 years+) 57.1 57.1 57.1 57.1 57.1 57.1 Inflation (consumer price index) 11.0 10.9 15.0 14.2 9.2 8.0 Current account balance (% of GDP) 3.8 -2.9 -1.2 1.3 1.4 3.9 Net foreign direct investment inflow (% of GDP) 0.7 1.1 3.6 3.9 4.6 3.7 Revenues (% of GDP) 20.4 21.6 22.3 22.4 22.3 22.2 1,2 International poverty rate ($2.15 in 2017 PPP) 64.3 63.5 63.1 62.1 60.8 59.7 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 81.0 80.4 80.2 79.4 78.4 77.6 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 93.2 92.9 92.8 92.4 91.9 91.5 GHG emissions growth (mtCO2e) 0.5 0.8 1.2 1.3 1.4 1.5 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2022-LCMS-VIII. Actual data: 2022. Nowcast: 2023-2024. Forecasts are from 2025 to 2027. 2/ Projection using neutral distribution (2022) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU. Macro Poverty Outlook / April 2025 95 This outlook reflects information available as of April 10, 2025. 1 2 ZIMBABWE Population Poverty million millions living on less than $3.65/day 16.6 9.9 3 4 Life expectancy at birth School enrollment Growth slowed to 2 percent in 2024, primarily driven by the years primary (% gross) El Niño-induced drought, which led to steep decline in agricultural output and rising food prices, while hydro- 59.4 95.8 5 6 electric power shortages constrained manufacturing. Fiscal GDP GDP per capita challenges exerted pressure on the newly introduced ZiG current US$, billion current US$ currency. A recovery to 6 percent growth is expected in 2025, driven by agricultural recovery, investments in 35.2 2117.8 Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2019 (2017 PPPs). 3/ 2022. mining and steel production, and moderated inflation. 4/ 2022. 5/ 2024. 6/ 2024. management, growth-enhancing structural reforms, and resolu- Key conditions and challenges tion of external arrears. Macroeconomic vulnerabilities and a business environment raise Poverty reduction has been constrained by structural factors in- the cost of doing business in Zimbabwe, increasing informality cluding macroeconomic volatility, dependence on low-productiv- and limiting the pace of structural transformation. In 2024, El ity agriculture combined with high correlation between weather Niño-induced drought triggered a state of National Disaster sig- shocks and agricultural production, low coverage of social as- nificantly affecting agriculture, an important sector of Zimbab- sistance programs, and high inequality in income and human we’s economy which largely depends on rainfed crops. The in- capital endowment. vestment climate is further hampered by inadequate electricity supply, as the drought has resulted in power shortages at the Kariba hydro-power station. Recent developments Public debt remains high, unsustainable, and in distress, limiting In 2024, Zimbabwe’s economy was undermined by the El access to international financing. Due to accumulation of exter- Niño-induced drought, which led to a steep decline in agri- nal arrears and legacy debts, total public debt reached US$21.2 cultural output. The drought also affected hydroelectric pow- billion in 2023 (96.6 percent of GDP). Fiscal risks remain ele- er generation at Lake Kariba, worsening electricity shortages vated due to wage bill pressures and borrowing on non-con- and constraining growth in the manufacturing sector. Macro- cessional terms. Persistent challenges in deficit financing have economic instability continued to undermine formal sector exerted pressure on the newly introduced ZiG currency. To re- businesses operating in local currency, while risks related to store debt sustainability, there is need for increased domestic price stability, exchange rates, and climate change-induced resource mobilization, fiscal consolidation, improved public debt disasters persisted. FIGURE 1 / Official and parallel market exchange rate, parallel FIGURE 2 / Actual and projected poverty rates and real GDP per premium capita ZiG/US$ Percent Poverty rate (%) Real GDP per capita (constant LCU) 45 150 100 7 40 90 125 6 35 80 70 5 30 100 60 4 25 75 50 20 3 40 15 50 30 2 10 20 25 1 5 10 0 0 0 0 4/8/24 6/8/24 8/8/24 10/8/24 12/8/24 2/8/25 2017 2019 2021 2023 2025 2027 International poverty rate Lower middle-income pov. rate Parallel rate Interbank rate Parallel premium (rhs) Upper middle-income pov. rate Real GDP pc Sources: Reserve Bank of Zimbabwe and World Bank estimates. Sources: World Bank. Notes: See footnotes in table on the next page. 96 Macro Poverty Outlook / April 2025 This outlook reflects information available as of April 10, 2025. The fiscal deficit declined from 6.4 percent in 2023 to 2.5 percent in 2024, as capital spending returned to historical Outlook average levels. Revenue increased, rising from 14.6 to 17 percent of GDP between 2023 and 2024, due to macroeco- Zimbabwe's economy is projected to grow by 6 percent in 2025, dri- nomic stabilization and tax policy measures. Fiscal risks re- ven by a post-drought recovery in agriculture, while investments in main elevated due to a growing wage bill, and challenges to gold, lithium, iron, and steel manufacturing are expected to boost finance the deficit persist. industrial output. Yet current global uncertainties could affect Zim- babwe’s exports directly and indirectly (as lower global demand In April 2024, the Reserve Bank of Zimbabwe (RBZ) introduced could depress global mineral prices). Greater uncertainty may also the ZiG currency, initially stabilizing the exchange rate and raise gold prices, positively affecting exports, while a depreciat- keeping inflation in single digits between May and August 2024. ing USD could benefit Zimbabwe’s largely dollarized manufacturing Yet, fiscal pressures led Treasury to borrow RBZ funds, resulting sector’s trade. in a sharp depreciation of the ZiG on the parallel market and a spiking parallel premium (Figure 1). In response, RBZ devalued Monetary policy conditions are expected to improve in 2025. Tight the currency in late September, bringing the parallel premium monetary policy since October 2024 has contributed to improved in- back down. A tighter monetary policy stance eventually result- flation dynamics, and ZiG inflation is expected to decline from 736 ed in a more stable formal and parallel market rate in Novem- percent in 2024, down to 84 percent in 2025, and to 8 percent in the ber and December. medium term. Yet, Zimbabwe is significantly dollarized (as reflect- ed by Foreign Currency Accounts making up 83 percent of broad The current account remained positive, at 0.4 percent of money supply in December 2024). USD inflation in 2025 is expect- GDP in 2024. While exports grew, driven by higher com- ed to be in single digits, and so the weighted USD-ZiG inflation rate modity prices (particularly gold), imports grew more from is improving even more rapidly. The parallel market premium has drought-related maize, rising fuel and electricity imports. Yet, also decreased in recent months, easing currency pressures. the current account remained in surplus, as a widening trade deficit is outweighed by growing household remittance in- Poverty is expected to decrease in 2025 due to higher growth, but it flows, which increased from 5 to 7 percent of GDP between is subject to the downside risk of current global uncertainties. Zim- 2023 and 2024. babwe’s weak 2024 growth, combined with a low growth elastici- ty of poverty reduction hampered poverty reduction. Despite rel- Due to the low GDP growth in 2024, the poverty rate at atively high human capital, creation of good jobs has been ane- the international poverty line of $2.15 per person per day mic, while informality remains high. The El Nino-drought highlights (PPP) declined marginally to 37.7 percentage points. The poor households’ vulnerability to changes in temperature and rain- contraction of the agriculture sector due to drought is ex- fall patterns. Strengthening the social protection system through pected to have affected rural and agricultural households broader and targeted coverage of safety sets can improve house- the most. hold ability to cope with shocks. Recent history and projections 2022 2023 2024e 2025f 2026f 2027f Real GDP growth, at constant market prices 6.1 5.3 2.0 6.0 4.6 3.6 Private consumption 5.1 -0.1 3.0 6.0 4.6 3.6 Government consumption 70.1 13.9 45.6 4.8 -5.2 2.6 Gross fixed capital investment 21.8 14.4 -25.7 11.0 16.9 8.3 Exports, goods and services 43.4 -8.4 -1.3 5.7 5.7 4.5 Imports, goods and services 54.0 -11.0 2.0 6.0 5.0 5.1 Real GDP growth, at constant factor prices 6.2 5.5 2.0 6.0 4.6 3.6 Agriculture 6.2 6.3 -15.0 12.8 7.1 6.9 Industry 5.2 3.2 2.7 5.1 4.4 4.5 Services 6.9 6.7 5.6 5.2 4.2 2.4 Inflation (consumer price index) 160.2 667.4 736.1 84.9 16.9 8.0 Current account balance (% of GDP) 0.9 0.4 0.7 0.9 0.7 0.8 Net foreign direct investment inflow (% of GDP) 1.0 1.6 1.3 1.4 1.4 1.4 Fiscal balance (% of GDP) 0.1 -6.4 -2.5 -2.7 -2.4 -2.3 Revenues (% of GDP) 16.6 14.6 16.4 17.2 17.3 17.7 Debt (% of GDP) 1229.2 96.6 93.3 64.6 59.0 57.7 Primary balance (% of GDP) 0.2 -6.3 -2.5 -2.7 -2.2 -2.2 1,2 International poverty rate ($2.15 in 2017 PPP) 39.3 37.8 37.7 36.0 34.9 34.1 1,2 Lower middle-income poverty rate ($3.65 in 2017 PPP) 64.0 62.8 62.7 60.8 60.0 59.4 1,2 Upper middle-income poverty rate ($6.85 in 2017 PPP) 84.9 84.3 84.2 83.5 82.8 82.4 GHG emissions growth (mtCO2e) 1.0 0.2 -0.6 -1.0 0.5 0.1 Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise. 1/ Calculations based on 2019-PICES. Actual data: 2019. Nowcast: 2020-2024. Forecasts are from 2025 to 2027. 2/ Projection using neutral distribution (2019) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU. Macro Poverty Outlook / April 2025 97 MPO