Economic Outline

flag Burundi Burundi: Economic Outline

Economic Indicators

Burundi's economic environment is characterized by a fragility trap, compounded by entrenched poverty. Persistent vulnerabilities include political instability, weak institutions, rapid population growth, and environmental degradation. Economic hurdles encompass low productivity, heavy reliance on foreign aid, insufficient infrastructure, and limited diversification. Agriculture constitutes 40% of GDP and employs over 90% of the workforce, while industrialization remains minimal, with exports primarily focused on coffee and tea. In 2023, economic growth picked up pace to reach 2.7%, marking an increase from 1.8% in 2022. This was supported by favorable rainfall and ongoing public and private investment. Economic growth is forecasted to reach 3.8% in 2024, driven by favorable rainfall, a gradual revival of investment in the mining sector, strategic public investment initiatives, and the cascading impacts of reforms in fiscal, monetary, and foreign exchange policies (World Bank).

In 2023, expenditure cutbacks contributed to a reduction in the fiscal deficit to 7.7% of GDP, down from 10.7% the previous year. The deficit was mainly funded through domestic short-term, high-interest loans from banks and Central Bank advances, indicating a reliance on domestic debt instruments. Consequently, public debt increased to 72.4% of GDP from 68.4% in 2022. The current account deficit (CAD) remained elevated at 13.9% of GDP in 2023, driven by surging oil prices and sluggish exports due to delayed mining contract negotiations. Remittances declined, leading to a reduction in net current transfers, although the capital account balances benefited from increased project grants. The fiscal deficit is anticipated to decrease to 4.7% of GDP in 2024 and further to 3.2% by 2026, driven by the digitization of tax administration and a reevaluation of non-essential expenditures, with support from the IMF ECF program. Public debt is forecasted to decline by 6 percentage points from its 2022 level, reaching 58.8% of GDP by 2026. Inflation averaged 27.1% in 2023, up from 18.8% the previous year. However, it is expected to decrease in 2024 and beyond, partly due to lower food prices resulting from favorable agricultural production and the declining trend in commodity prices. The government's priorities remain supporting economic and social recovery and addressing external financing and fiscal needs. The macroeconomic policies focus on a prudent fiscal policy, price and financial sector stability, external sustainability, and increased foreign exchange reserves coverage, improved competitiveness, and stronger governance (IMF).

The weak economic growth in relation to population growth is leading to a continuous rise in the poverty rate, with 62% of the population living below the World Bank's poverty measure of USD 2.15 per day in 2023. Based on the current trajectory, poverty is expected to persist at 61.9% in 2024. Significant structural reforms are imperative to stimulate growth in the private nonfarm sector, enhance agricultural productivity, and ensure a well-educated and healthy population. The country’s GDP rate per capita (PPP) was estimated at USD 836 in 2022 by the World Bank, the lowest level in the world. Unemployment is also rampant, especially among young citizens, although official World Bank figures point to a 0.9% unemployment rate in 2023.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 3.923.193.063.423.79
GDP (Constant Prices, Annual % Change) 1.83.36.05.95.7
GDP per Capita (USD) 311246229248267
General Government Gross Debt (in % of GDP) 68.472.765.861.356.6
Inflation Rate (%) n/a20.116.110.110.2
Current Account (billions USD) -0.61-0.60-0.63-0.68-0.68
Current Account (in % of GDP) -15.6-18.7-20.7-19.9-17.8

Source: IMF – World Economic Outlook Database - October 2021.

Note: (e) Estimated Data


 
Monetary Indicators 20162017201820192020
Burundi Franc (BIF) - Average Annual Exchange Rate For 1 MUR 46.5550.1451.0151.9948.67

Source: World Bank - Latest available data.

 

Main Sectors of Industry

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 85.9 3.6 10.5
Value Added (in % of GDP) 27.6 10.6 45.4
Value Added (Annual % Change) -0.8 3.2 3.1

Source: World Bank - Latest available data.

 

The Active Population in Figures

201820192020
Labour Force 4,822,3744,987,3905,134,416

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 79.80%79.94%80.00%
Men activity rate 78.03%78.19%78.25%
Women activity rate 81.51%81.63%81.69%

Source: International Labour Organization, ILOSTAT database

 

Return to top

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
49,9/100
World Rank:
161
Regional Rank:
40

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Not Free
Political Freedom:
7/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
147/180

Return to top

Sources of General Economic Information

Useful Resources
Presidency website
Ministry of Finance, Budget and Economic Development
National Bank
 
 

Return to top

Any Comment About This Content? Report It to Us.

 

© eexpand, All Rights Reserved.
Latest Update: May 2024