Economics & Development

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.

Eswatini’s GDP growth is expected to edge lower to 3.9 percent in 2026 amid rebounding consumption, slowing investment and unfavorable global impacts. Despite recent robust growth, fiscal pressures and high unemployment persist, with more than half the population living in poverty below the lower-middle-income threshold. Fiscal consolidation is needed over the medium term to ensure sustainability of public finances.

Economic activity in Pakistan gained momentum in FY26 as domestic demand strengthened. However, the conflict in the Middle East will significantly affect the growth outlook as disruptions to energy markets, and trade routes raise Pakistan's import bill, weigh on exports and remittances, and dampen domestic activity. Fiscal discipline, oil price pass through, exchange rate flexibility, and structural reforms are critical to managing risks and sustaining growth.

Growth remained strong at 6.3 percent in 2025, supported by strong private demand, near-zero inflation, and a decade-high trade surplus. Fiscal consolidation reduced the deficit to 3.0 percent of GDP. Despite strong performance, high informality and weak job quality limit poverty reduction. Growth is set to average 6.4 percent over 2026–2028, lowering middle-income poverty amid climate and significant geopolitical risks, especially from the Middle East events.

Sustaining macro-financial stability will depend on disciplined fiscal and monetary policy, expanding the revenue base, enhancing public financial management, and accelerating sector reforms, namely in energy and cocoa. Along with macroeconomic stability, improving the investment environment will enable broader-based growth and job creation, accelerating poverty reduction.

GDP growth is projected to remain subdued in FY26 due to the impact of the Middle East conflict, elevated inflation, and weak investment amid persistent financial sector vulnerabilities. Poverty increased by 1.4 million between FY24–25, with the conflict projected to push an additional 1.2 million into poverty in FY26. Growth is expected to recover gradually in FY27–28 as reforms in domestic resource mobilization, the financial sector, and the business environment accelerate.

The current conflict in the Middle East is expected to significantly affect Maldives, disrupting tourism and driving up import costs. In 2026, growth is projected to slow, inflation to rise, unemployment to increase slightly as service sector earnings fall, and poverty to increase with eroding real incomes. Foreign exchange (FX) liquidity pressures are intensifying, while buffers in the form of usable reserves remain low.

Growth accelerated to 7.6 percent in FY26, driven by private consumption and investment. Poverty has continued to decline since 2011, with lower-middle-income country poverty at 16 percent in 2023. Growth is projected to moderate to 6.6 percent in FY27, due to headwinds from higher oil, gas, and fertilizer prices caused by the conflict in the Middle East. Risks to the outlook hinge on the evolution of the conflict and related energy market disruptions.

Non-hydrocarbon growth remained robust in 2025, supported by strong investment and household consumption, while inflation eased as food prices declined. Fiscal and external deficits widened amid relatively low hydrocarbon prices, rising public spending, and investment-driven imports. Advancing diversification, improving the business climate and the efficiency of public enterprises, and strengthening the macroeconomic framework remain critical for growth and job creation.

Growth in El Salvador accelerated markedly in 2025, supported by strong investment, record remittance inflows, and robust performance in construction and tourism. Over the medium term, growth is expected to stabilize around 3 percent, above its historical average, while poverty is projected to reach 28 percent. Continued progress on its reform agenda will be critical to sustaining this growth trajectory and reducing fiscal and external imbalances.

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.

Growth accelerated to 4.6 percent in 2025 on resilient exports, but it is projected to moderate to 3.6–3.7 percent over 2026–2028 as external demand eases. While fiscal consolidation has continued, revenue growth has flatlined and central government debt remains high at 60.4 percent. Although real wage growth reduced poverty to its lowest rate since 2010, falling participation rates and persistent inequality pose challenges.

After reducing fuel subsidies in late 2025, the new government faces the task of addressing inherited high fiscal deficits, high inflation, and falling living standards. With real GDP estimated to have contracted by 2.1 percent in 2025, Bolivia needs a credible plan to tackle widening imbalances and rebuild fiscal and external buffers to stabilize the economy and reignite growth and poverty reduction.

The economy is estimated to have grown 1.3 percent in 2025, following an expansion of 4.7 percent in 2024. Fiscal consolidation is needed as debt-to-GDP is projected to stabilize around 77 percent over the medium term. Structural reforms, including in revenue mobilization, the financial sector, and social protection, are critical for building fiscal buffers, creating formal jobs, and accelerating poverty reduction.

Following robust GDP growth of 6.6 percent in 2025, growth is expected to moderate to around 4.4 percent in 2026 and 4.1 percent over 2027–2028, supported by solid domestic consumption and strong agricultural performance. This momentum has contributed to a continued decline in poverty, estimated at 17.9 percent in 2025. Reforms to strengthen human capital and infrastructure quality could further boost investment and potential growth.