Burundi’s economic recovery faces test as IMF urges tougher reforms

Burundi’s economic recovery is gathering pace, helped by a surge in coffee and gold exports, but the International Monetary Fund has warned that persistent foreign-exchange shortages and weak fiscal capacity leave the country exposed to a renewed crisis.

The IMF expects the economy to expand by 3.9 per cent this year and by an average of 4.3 per cent between 2027 and 2031, after growth reached 4.2 per cent in 2025. The improvement was driven largely by stronger export earnings, particularly from coffee and gold, which helped ease constraints on imports and support economic activity.

Inflation has also fallen sharply. After reaching about 45 per cent in April 2025, consumer-price inflation declined to 8.6 per cent a year later, helped by tighter fiscal policy and the central bank’s suspension of monetary financing of the government.

But the IMF’s assessment highlights the fragility beneath the improvement. Burundi’s foreign-exchange reserves stood at only $214mn at the end of 2025, equivalent to 1.6 months of imports, while the official exchange rate remains substantially overvalued. The current-account deficit was 6.6 per cent of GDP in 2025.

The fund is calling on Bujumbura to maintain fiscal restraint, tighten monetary policy and move towards a unified and more flexible exchange-rate regime. Without reform of the foreign-exchange market, the IMF says, external imbalances are likely to remain significant.

The government adopted a macroeconomic stabilisation plan in January aimed at restoring stability through tighter fiscal and monetary policies, exchange-rate reforms and changes to agriculture and mining. The IMF welcomed the direction of policy but urged the authorities to sustain the adjustment.

Debt pressures have eased, with public debt falling from 53 per cent of GDP at the end of 2024 to 42 per cent a year later. The IMF nevertheless continues to classify Burundi as being at high risk of both external and overall debt distress.

The fund also sees a political risk ahead. Its downside scenario includes a possible fiscal slippage around the presidential election scheduled for 2027, combined with weaker prices for Burundi’s key exports and higher fuel and fertiliser costs. Under such conditions, growth could weaken substantially and inflation could rise again.

For now, the IMF expects inflation to average 14.5 per cent in 2026 before gradually declining to 11.5 per cent by 2031. Foreign-exchange reserves are projected to rise to the equivalent of 2.8 months of imports by 2031, while public debt is expected to fall to about 32 per cent of GDP.

The central question for Burundi is therefore whether the recent improvement marks the beginning of a durable economic adjustment or merely reflects a favourable upswing in the prices of its main exports. The IMF’s message is that stronger institutions, higher domestic revenues and exchange-rate reform will be needed to turn the current recovery into sustained, private-sector-led growth.