Learn how the World Bank Group is helping countries with COVID-19 (coronavirus). Find Out

Skip to Main Navigation
publication October 9, 2019

Djibouti's Economic Update — October 2019

People browse fruit for sale at a food stall in Djibouti

Economic growth is projected to reach 7.2% in 2019 as international trade normalizes in Ethiopia following the continuing political transition and the 2017 devaluation by 15% of the Ethiopian birr. Growth will be driven by export of transportation and logistics services supported by the newly commissioned trade infrastructure. Container terminal volume increased by 8.3% in the first seven months of 2019 to reach 520,000 TEU, while bulk cargo volume increased by 17.7%, to 3.5 million tons in the same period. Growth in the small secondary sector will also remain strong, supported by the nascent food processing and construction materials industries – signs that domestic value chains related to trade are emerging.

The medium-term economic outlook remains positive, as the Government’s strategy of positioning the country as a regional trade, logistics, and digital hub gains traction. GDP growth is expected to reach 7.5% in 2020 before accelerating to 8.0% in 2021-2023. Growth will remain supported by reexports by free zone companies and exports of transportation, logistics, and telecommunication services. A gradual emergence of non-traditional exports, mainly light manufacturing from the export-processing zones will increase value-added. As trade and investment flows to Ethiopia continue to develop, the need for deeper connectivity will drive capital inflows over the medium term and help increase the utilization of existing logistics facilities. With the starting of production of natural gas in Ethiopia, an export terminal in Djibouti will generate further boosts in activity.