Djibouti’s Economy Shows Resilience Amid Global Uncertainty

DJIBOUTI, May 7, 2026 — Djibouti’s economy remained resilient in 2025, sustaining growth and macroeconomic stability despite a challenging global environment, according to the Spring 2026 edition of the Djibouti Economic Monitor: Labor Market Structure and the School-to-Work Transition, released today by the World Bank Group.

Economic growth remained strong, with real GDP estimated at 6.5 percent in 2025, following a period of solid economic performance in recent years. Growth continued to be driven by services linked to Djibouti’s role as a regional logistics and trade hub, while domestic demand gained momentum as private consumption and investment strengthened in a context of low inflation. At the same time, Djibouti’s high exposure to trade and transport links leaves the economy particularly vulnerable to external shocks. Against this backdrop, the report documents recent labor market conditions and employment patterns.

Inflation remained low over the past year, supported by Djibouti’s stable exchange-rate framework reflecting economic conditions observed in 2025. Public finances also improved, with the budget returning to surplus and public debt continuing to decline, helping to strengthen confidence in the economy. Djibouti maintained a solid external position, supported by trade and services activity, even as global conditions became increasingly uncertain and port traffic moderated from the exceptionally high levels recorded in the previous year.

Looking ahead, growth is expected to remain close to 6 percent, driven by private consumption and investment. However, external developments, including regional security conditions, disruptions to maritime trade routes, and higher global energy prices, continue to create uncertainty.

"In a period marked by heightened uncertainty and external pressures, Djibouti’s economy has shown resilience," said Ilyas Moussa Dawaleh, Minister of Economy and Finance in charge of Industry. "Our priority now is to turn this performance into better living conditions by supporting households and widening opportunities for young people and women."

Beyond the macroeconomic outlook, the report places a strong emphasis on people and jobs, examining labor market outcomes and the transition from school to work. Drawing on evidence from Djibouti’s first nationally representative Labor Force Survey, the report shows that more than half of the working-age population remains outside the labor force, unemployment is particularly high among young people and women, and nearly 46 percent of youth aged 16 to 24 are NEET (Not in Education, Employment, or Training). Informal employment remains widespread, limiting job quality and income prospects.

"This edition brings new nationally representative evidence on labor market participation, informality, and school-to-work transition in Djibouti," said Fatou Fall, World Bank Group Joint Resident Representative for Djibouti. "It provides a solid empirical basis to inform evidence-based discussions on employment and labor market challenges."

About The World Bank

The World Bank Group has a bold vision: to create a world free of poverty on a livable planet. In more than 100 countries, the World Bank Group provides financing, advice, and innovative solutions that improve lives by creating jobs, strengthening economic growth, and confronting the most urgent global challenges. For more information, please visit www.worldbank.org, www.miga.org, and www.ifc.org.