Economics & Development

Growth strengthened in 2025, driven by highway construction and services. Rising wages, together with food and services price increases kept inflationary pressures elevated. Revenue shortfalls and an increasing debt stock highlight the need for timely fiscal consolidation. Outlook projections are contingent on sustained reform implementation and subject to significant downside risks, including uncertainty stemming from the Middle East conflict.

Macroeconomic policies have contributed to disinflation, reduced external imbalances, higher reserves, and moderate economic growth. Growth is projected at 2.8 percent in 2026 and 3.7 percent in 2027. Continued progress on disinflation requires preserving tight monetary stance and further tightening fiscal policy. Poverty and unemployment reduction has somewhat been offset by high cost of living. Uneven welfare gains call for social protection measures for vulnerable groups.

Although growth decelerated in 2025, the economy showed resilience amid heightened uncertainty. Intensifying price pressures weighed on activity, while a widening merchandise trade gap further strained the current account. The outlook is subject to downside risk, including uncertainty stemming from the impact of the Middle East conflict. Prudent fiscal management is key to maintain strong fiscal buffers and prioritize growth-enhancing spending.

In 2025, GDP growth is estimated at 6.7 percent, driven by new oil and gas production and agriculture. Low inflation at 1.4 percent and the rebound in agriculture are estimated to have reduced poverty to 36.2 percent. The fiscal deficit declined sharply to 8.1 percent of GDP supported by GDP growth. Senegal’s economic outlook is constrained by debt sustainability risks and the conflict in the Middle East.

The economy shows early signs of recovery, supported by the return of displaced populations, pickup in economic activity, and easing supply constraints. Modest improvements in trade flows, localized market activity, and price stabilization in secure areas indicate nascent gains. However, the outlook remains uncertain. Recovery prospects depend on restoring peace and stability and rebuilding institutional capacity.

Economic growth is estimated at 3.2 percent in 2025, driven by tourism, financial services, and information and communication technologies (ICT). Growth is forecast at 2.5 percent in 2026, as key service sector activities maintain momentum. The poverty rate is projected to fall from 12 percent to 9.5 percent by 2028. Fiscal consolidation is expected to be gradual, with public debt likely to rise. A possible sovereign rating downgrade could weigh on investor confidence.

Growth is expected to contract by 2.0 percent in FY2025/26, despite modest signs of recovery. Inflation moderated to 18.8 percent in December 2025, while the current account improved mainly on import compression and remittances. Conflicts in the Middle East could raise energy costs, adding to inflation and external pressures. Growth is forecast at 2 percent in FY2026/27, constrained by conflicts in the Middle East and domestic structural issues.

Gabon’s growth decelerated to an estimated 2.5 percent in 2025 amid maturing oilfields and challenges facing the wood and manganese sectors. Lower oil production and high spending needs pose significant fiscal challenges. To create more jobs and reduce poverty substantially, it will be key to prioritize energy, transport, and social sectors, while aligning public investments with fiscal space and creating better business conditions for firms.

Growth remained robust in 2025, supported by tourism and public investment. Inflation edged up but remains well anchored. Privatization receipts improved the fiscal position markedly. Consolidation should continue, although the 2026 electoral cycle brings uncertainty. Growth is set to soften in 2026, reflecting headwinds from the conflict in the Middle East. Increased price pressures could slow down poverty reduction, though remittances should provide some cushioning.

Congo’s growth is recovering slowly, but poverty remains persistently high. The country is in debt distress and continues to face significant liquidity pressures. Over the medium term, the conflict in the Middle East is expected to increase growth volatility, making business-climate reforms essential to establishing non-oil sectors as genuine engines of economic expansion.

Cameroon’s growth slowed to 3.2 percent in 2025 amidst post-election unrest, with poverty remaining unchanged at just over 28 percent. Revenue dropped, widening the deficit to 2.2 percent of GDP, with public debt at 43.8 percent of GDP. Near-term growth relies on improved power supply and private investment, but downside risks remain from the slow pace of reforms, limited donor funding, and volatile commodity prices.