The economic growth of Burundi, which began recovering from 1.8 percent in 2022 to 2.7 percent in 2023, is set grow by 4.3 percent, this year according to the International Monetary Fund (IMF).
“…Growth is projected to accelerate to 4.3 percent in 2024, supported by strong agricultural production, productive investment, and the ongoing reforms. Increases of pump prices and higher fuel import volume helped reach cost-recovery pricing to contain implicit fuel subsidies and decrease fuel shortages,” said, IMF in its statement that followed visit of its team led by Ms. Mame Astou Diouf, Mission Chief for Burundi, visited Bujumbura during January 11−21, 2024.
“While inflation pressures were high in 2023, with average inflation estimated at around 27 percent, they have started receding since the last quarter of the year. Average inflation is projected to decrease to around 22 percent in 2024,” it said.
IMF stated that external sustainability remains challenging. “The current account deficit remained large in 2023 (13.3 percent of GDP) while FX reserves are low ($96.4 million or 0.8 month of imports at end-2023), owing to the high import bill. Strong remittance inflows, gold exports, the IMF’s first ECF disbursement and other donor financing have helped relieve pressures.”
“The 38-percent depreciation of the official ER operated by the BRB on May 4, 2023 temporarily reduced the parallel FX market premium (about 40 percent on May 4). However, the premium has widened since then, recently hovering beyond 55 percent. The financial sector has shown resilience,” IMF said.
“Agile monetary policy. While the monetary policy (MP) tightening started in 2023 has helped ease inflation pressures, further tightening may be needed. The modernization of the MP framework, including the adoption of a policy rate and quarterly press releases, is expected to improve MP transmission. Limiting monetary financing will support inflation easing and external policy recalibration efforts.”