Economics & Development

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.

Sierra Leone’s economy expanded modestly in 2025, under-pinned by tighter monetary and fiscal policies. Sustained progress will depend on continued fiscal consolidation, prudent debt management, and institutional reforms to strengthen public financial management, governance and improve the investment climate. While extreme poverty remains widespread, it is expected to decrease as inflation eases, reducing cost-of-living pressures on households.

Economic growth is estimated at 5.8 percent in 2025,mainly driven by tourism, with inflation at 0.3 percent and a poverty rate of 7.2 percent using the upper-middle-income poverty line of US$8.30 per day (2021PPP). Growth is projected at 1.1percent in 2026, as visitor arrivals are moderate. The government aims to maintain fiscal consolidation through improved revenue efficiency while expanding social benefits. External shocks and domestic policy uncertainties, however, pose downside risks.

Economic growth is estimated to have slowed in 2025, driven by cuts in foreign aid and adverse climate conditions. Declining foreign aid adversely impacted demand, fiscal performance, constrained humanitarian support, and slowed poverty reduction. Recent oil price shocks are expected to further downsize private consumption and GDP growth while increasing inflationary pressures. The medium-term outlook remains uncertain, with risks tilted to the downside

Real GDP growth stood at 4.5 percent in 2025, driven by strong gold exports and improved fuel availability. Election-related expenses widened the primary fiscal deficit to 4.6 percent, raising debt. High debt service, limited donor support, unforeseen security spending, and weak public financial management constrain government spending on wages and essential services. Extreme poverty rates, at over two-thirds of the population, are high and persistent.

The Palestinian economy experienced an unprecedented contraction after the 2023–25 Gaza conflict. Despite the ceasefire, Gaza still suffers from catastrophic infrastructure destruction, access restrictions, and loss of life. Spillover effects in the West Bank included job losses, service disruptions, and an intensified fiscal crisis. The outlook depends on security stability—locally and regionally—Gaza’s reconstruction, and how Israeli restrictions in the West Bank evolve.

Stronger cashew production, solid private demand, and easing inflation supported 5.5 percent growth in 2025 and reduced poverty to 39.8 percent. The fiscal deficit narrowed less than planned due to weak tax mobilization. Growth is projected to soften in 2026, with headwinds from the conflict in the Middle East, political instability, elevated food and oil prices, and lower international cashew prices.

Economic activity remained resilient in 2025, but pressures intensified from global trade uncertainty, maritime risks, and domestic constraints. GDP growth eased to 6.5 percent from 7.0 percent in 2024, supported by construction, telecommunications, tourism, and Ethiopia-corridor demand. Inflation stayed near zero, supporting household consumption. High public debt constrains fiscal space, and poverty reduction hinges on jobs and climate resilience.

Growth slowed to 2.7 percent in 2025, reflecting lower electricity production and softer tourism. The fiscal deficit widened from 3.3 to 4.3 percent of GDP in 2025, reducing policy space and increasing financing needs. Public debt is about 64 percent of GDP amid sizable upcoming repayments. As European Union (EU) accession advances, stronger fiscal discipline and rebuilding buffers will be key to safeguarding stability and supporting growth.

Growth accelerated from 1.5 percent in 2024 to 2.6 percent in 2025, driven by private consumption and government spending amid expansive fiscal and income policies. Disinflation paused and the fiscal position deteriorated further following the suspension of the fiscal rule. Growth is projected at 2.2 percent in 2026, with poverty edging down to 34.8 percent. Risks include fiscal slippage, inflationary pressures, and geopolitical uncertainty.

Trinidad and Tobago combines strong human development and sizable fiscal buffers with high dependence on a volatile energy sector. Growth is modest and inflation low; the fiscal deficit has narrowed but debt remains elevated. Labor force participation is weak, and gender gaps persist. Medium-term growth should strengthen with energy projects and fiscal improvement, but project implementation risks are significant.