Djibouti\u2019s economic performance in the coming years largely depends on how it benefits from Ethiopia\u2019s fast growth and whether Djibouti can mitigate potential port diversions, concludes the International Monetary Fund (IMF) following a staff visit to the tiny coastal nation.<\/p>\n
The IMF projected Djibouti\u2019s 2027 growth at six percent, buoyed by growing revenue from Ethiopia\u2019s increasing use of its ports.<\/p>\n
\u201cEthiopia\u2019s expansive market and upcoming major infrastructure projects are expected to boost demand for Djibouti\u2019s port services, resulting in a positive growth outlook of about six percent 2027 onwards,\u201d reads an IMF statement issued this week.<\/p>\n
It estimates Djibouti\u2019s growth in 2025 at 6.5 percent, driven by robust port activity, vibrant construction, transportation, telecommunications, and retail sectors.<\/p>\n
\u201cThe fiscal deficit for 2025 is estimated to have moderated to about 0.7 percent of GDP, from 2.7 percent in 2024, reflecting expenditure restraint despite revenue shortfalls. The 2026 budget anticipates that the government will have no deficit this year,\u201d reads the statement.<\/p>\n
It also warns Djibouti might face growth setbacks in the face of tensions in the Horn and the possibility that Ethiopia turns towards other alternatives. The IMF recommends that Djibouti and Ethiopia collaborate on joint port developments to curb the economic risks.<\/p>\n
\u201cDjibouti\u2019s economic outlook faces several risks. Rising tensions in neighboring Horn of Africa countries may increase uncertainty and refugee flows amidst reduced humanitarian aid. Potential trade diversion to other regional ports, which could lower revenues, may be mitigated by Ethiopia\u2019s fast growth and ongoing joint infrastructure projects with Djibouti,\u201d said IMF.<\/p>\n
Landlocked Ethiopia depends heavily on Djibouti for its international trade. The administration of PM Abiy Ahmed (PhD) has been engaged in a years-long campaign to secure maritime access, initially through Somaliland\u2019s Berbera and, more recently, through Assab.<\/p>\n
The campaign has, however, been met with fierce opposition.<\/p>\n
Most recently, Djibouti and Egypt reached a preliminary agreement to cooperate in the development of Doraleh port. Analysts say the deal could carry significant consequences for Ethiopia\u2019s interests, and it was likely part of the reason for a visit to Djibouti this week by PM Abiy Ahmed and other senior officials.<\/p>\n","protected":false},"excerpt":{"rendered":"
Djibouti\u2019s economic performance in the coming years largely depends on how it benefits from Ethiopia\u2019s fast growth and whether Djibouti can mitigate potential port diversions, concludes the International Monetary Fund (IMF) following a staff visit to the tiny coastal nation. The IMF projected Djibouti\u2019s 2027 growth at six percent, buoyed by growing revenue from Ethiopia\u2019s […]<\/p>\n","protected":false},"author":42,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"editor_plus_copied_stylings":"{}","ngg_post_thumbnail":0,"footnotes":""},"categories":[2079,1960,13],"tags":[],"class_list":{"0":"post-48692","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-geopolitics","7":"category-latest-news-in-ethiopia","8":"category-latest-ethiopian-political-news"},"acf":[],"_links":{"self":[{"href":"https:\/\/www.thereporterethiopia.com\/wp-json\/wp\/v2\/posts\/48692","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thereporterethiopia.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thereporterethiopia.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thereporterethiopia.com\/wp-json\/wp\/v2\/users\/42"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thereporterethiopia.com\/wp-json\/wp\/v2\/comments?post=48692"}],"version-history":[{"count":0,"href":"https:\/\/www.thereporterethiopia.com\/wp-json\/wp\/v2\/posts\/48692\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.thereporterethiopia.com\/wp-json\/wp\/v2\/media?parent=48692"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thereporterethiopia.com\/wp-json\/wp\/v2\/categories?post=48692"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thereporterethiopia.com\/wp-json\/wp\/v2\/tags?post=48692"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}