Economic Situation
In 2025, growth in 2025 is projected at 6.5% (3.1% per capita), driven by oil exports, with inflation at 4.2%, and extreme poverty incidence declining by 2.8 points (projection from microsimulation). In response to fiscal challenges, authorities adopted a revised 2025 budget with conservative revenue estimates and reduced investment. Growth is projected to average 6.7% in 2026-2027, as oil production nears full capacity.
Recent Developments
GDP growth in 2025 is driven by a rise in oil output to 28 million barrels.
Inflation turned negative in the second quarter of 2025 and is estimated to average 4.2% in 2025, down from 9.1% in 2024, reflecting food prices. With robust growth and moderating inflation, the extreme poverty rate is projected to decline from 52.9% in 2024 to 50.1% in 2025, lifting about 310,000 people out of poverty.
The authorities adopted a supplementary budget with conservative revenues and reduced expenditure mainly on investments, alongside broadened VAT exemptions for primary producers and widely consumed goods. The fiscal deficit is projected at 3.2% of GDP in 2025, while the January 2025 Debt Sustainability Analysis indicates a high risk of overall debt distress due to lower revenue projections. Arrears clearance is planned by end‑2025, but rollover risks have risen due to tighter regional bond markets.
Economic Outlook
GDP growth is projected to average 6.7% in 2026–2027, supported by oil output nearing full capacity at 106,000 bpd and stronger demand. Public spending should accelerate after mid‑2026, when repayment of a $400 million oil‑backed loan restores 80% of oil revenues to the budget. Clearing domestic arrears in 2025 and higher oil receipts will bolster investment in 2026.
Inflation is expected to ease to 2% by 2027, within WAEMU’s 1–3% target, aided by lower food prices. With stronger growth, extreme poverty is projected to fall by about 440,000 people by 2027, to 45.6%.
