Burundi: Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Burundi's economy was still recovering from the 2015 political crisis when it was hurt by the COVID-19 pandemic that broke out in 2020. After contracting by -1% in 2020, GDP grew at a rate of 2.4% in 2021, boosted by a rebound in primary and tertiary sector activities which benefited from relaxed restrictions measures (IMF). Economic recovery should strengthen further in 2022, with GDP growth projected at 3.6% according to IMF’s latest estimates (down from a previous estimate of 4.2%). All sectors are expected to support economic growth, but the war in Ukraine will slow it down. Initially forecast at 4.7% in 2023, GDP growth is exposed to downside risks resulting from uncertainties surrounding the geopolitical situation in Europe, the end of the pandemic, and natural disasters (IMF).

After entering into recession in 2020, Burundi's economy rebounded in 2021, but the pandemic exacerbated pre-existing economic challenges and created sizable fiscal financing needs (IMF). Fiscal deficit, which doubled between 2019 and 2020, remained high in 2020/2021, estimated at -9% GDP by Coface and -7.9% GDP by the IMF. It is projected to narrow at -4.6% GDP in 2021/2022 according to the IMF, driven by an improvement in revenue collection, an increase in grants and a decrease in current spending. Coface projects a budget deficit of -8% GDP over the same period. Increased public investment are expected to negatively impact fiscal deficit in 2022/2023. Public debt increased from 67% GDP in 2020 to 72.4% GDP in 2021, and is expected to decrease but remain high in 2022 (71.2% GDP) and 2023 (67.7% GDP) (IMF). The structural trade deficit and increase in domestic debt put Burundi at a risk of debt distress (AfDB). The country benefited from a debt relief from the IMF under the Catastrophe Containment and Relief Trust, and from the disbursement of USD 76 million under the Rapid Credit Facility. Inflation increased to 8.3% in 2021, driven by higher food prices, and could accelerate to 9.2% in 2022 due to rising commodity prices (including oil prices), triggered by the crisis in Europe (IMF). However, a good harvest, positive effects of the regulation of strategic product prices, and import substitution initiatives could dampen imported inflation (IMF). Recurrent foreign exchange shortages and continued currency depreciation are major challenges (Coface). The government priorities remain supporting economic and social recovery and addressing external financing and fiscal needs. The macroeconomic policies focus on a prudent fiscal policy, price and financial sector stability, external sustainability and increased foreign exchange reserves coverage, improved competitiveness and stronger governance (IMF).

The weak economic growth in relation to the population growth is leading to a continuous rise in the poverty rate, which reached an estimated 87.1% in 2021 (World Bank). Burundi ranks 185th out of 189 countries on the Human Development Index. Unemployment is also rampant, especially among young citizens, although according to the World Bank, unemployment rate was 1.7% of the total labor force in 2020 (modeled ILO estimate). Life expectancy at birth is low, at around 61 years (World Bank). Moreover, one adult out of 15 is HIV positive and medical supplies are insufficient. Severe and moderate malnutrition affects 50% of the population and malaria cause many death each year.

Monetary Indicators	2016	2017	2018	2019	2020
Burundi Franc (BIF) - Average Annual Exchange Rate For 1 GHS	414.69	397.43	377.51	354.92	342.24

Source: World Bank - Latest available data.

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Latest Update: February 2023