Djibouti’s Economy Grows 6.5% Amidst Regional Turmoil

By Zamzam Osman - Reporter

Djibouti, 16 January 2026 Djibouti's economy grew by 6.5 per cent in 2025, driven by strong port activities and increased infrastructure projects, according to the International Monetary Fund (IMF).

A report issued by the IMF following a mission visit to Djibouti from January 11 to 15, 2025, highlighted that the growth was primarily driven by port activities, though slightly below the levels of 2024 due to a decline in transshipment activities. Additionally, the report noted, sectors like construction, transportation, telecommunications, and retail also played a significant role in the impressive growth.

The IMF noted that the vast market in Ethiopia and major infrastructure projects between the two countries will likely boost demand for Djibouti’s port services, leading to a continued positive growth outlook in the years beyond 2027, with an estimated growth rate of about 6 per cent.

Regarding inflation, the IMF stated that it has decreased to 0 per cent in 2025, down from 2.1 per cent in 2024, largely due to a decline in food prices. Moreover, the government’s fiscal deficit dropped to about 0.7 per cent of GDP, reflecting expenditure control despite revenue shortfalls.

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However, the IMF warned that tensions in neighboring Horn of Africa countries could increase uncertainty, refugee flows, and a reduction in humanitarian aid, all of which could pose risks to Djibouti’s broader economic outlook.

The report also urged Djibouti’s government to continue strengthening fiscal discipline, boosting tax revenues, and finalizing debt negotiations to ensure debt sustainability and maintain the stability of the currency board.

The IMF commended the Djiboutian government for its close cooperation and open discussions and expressed hope for continued engagement between both parties.