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. After contracting by -0.3% in 2020, GDP grew at a rate of 3.1% in 2021, boosted by a rebound in primary and tertiary sector activities which benefited from relaxed restrictions measures (IMF). Economic recovery strengthened further in 2022, with GDP growth projected at 3.6% according to the IMF’s latest estimates. For 2023 and 2024, the IMF projects growth to pick up to 4.1% and 4.9%, respectively, supported by low statistical base effects, new projects in the agricultural and mining sectors, and higher government spending. However, GDP growth is exposed to downside risks resulting from uncertainties surrounding the geopolitical situation in Europe and natural disasters (IMF), and the country continues to face macroeconomic challenges, such as worsening terms of trade and rising domestic inflation, which pose a threat to the already difficult living conditions.

Since 2015, the budget deficit has been growing, mainly financed by borrowing from the local banking system, and the pandemic exacerbated pre-existing economic challenges and created sizable fiscal financing needs (IMF). Coface estimated Burundi’s government budget deficit at 7.4% of GDP in 2022, with a slightly better forecast for 2023 (-6.2%) thanks to an improvement in revenue collection. The debt-to-GDP ratio stood at 66.4% as of 2022, with the IMF expecting it to remain stable over the forecast horizon (67.6% in 2023 and 65.5% the following year). Nevertheless, there is a significant risk to debt sustainability due to the substantial stock of accumulated debt and deficits that are still projected to exist. This risk is further compounded by the high exposure of the local banking sector to the national public debt, which poses a systemic risk. The country benefited from 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. New consultations with the IMF were concluded in July 2022; however, no funded programme is expected in 2023. The conflict in Ukraine has led to an increase in the prices of essential goods like food and fuel, resulting in an overall inflation rate of 20.9% as of September 2022, up from 10.5% as of August 2021. The IMF estimated the average yearly inflation rate at 17.3% in 2022, forecasting a gradual reduction to 8.3% this year and 4.5% in 2024. Recurrent foreign exchange shortages and continued currency depreciation are major challenges (Coface). The government's 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 population growth is leading to a continuous rise in the poverty rate, with 87% of the population living below the World Bank's poverty measure of USD 1.90 per day in 2021. The country’s GDP rate per capita (PPP) was estimated at USD 865 in 2022 by the IMF, the lowest level in the world. Unemployment is also rampant, especially among young citizens, although according to the World Bank, the unemployment rate was 1% of the total labour force in 2020 (modelled ILO estimate). Life expectancy at birth is low, at around 62 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 deaths 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: September 2023