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Kingdom of Eswatini: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Kingdom of Eswatini

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  • International Monetary Fund

Abstract

The 2025 Article IV Consultation discusses that Eswatini’s economic growth moderated from 3.4 percent in 2023 to 2.8 percent in 2024. Economic growth is expected to strengthen in the near term, up to 4.6 percent in 2026, supported by domestically financed investments. Continued fiscal consolidation to reduce financing pressure, complemented by calibrated monetary policy and financial sector reforms, is key to macroeconomic stability. While growth in 2025–26 is forecast to pick up due to public and private investment, as the impulse from this investment wanes and in the absence of decisive structural reforms, growth is expected to slow to 2.8 percent over the medium term, slightly above the historical average of 2.6 percent. It is recommended to remain vigilant to rising capital outflows and close the interest rate gap proactively if reserves come under pressure. Refine the monetary policy instruments and develop the money market. Continue implementing recommendations of the 2023 Financial Sector Stability Review and monitor vulnerabilities in the banking system and non-bank financial institutions. Deep structural reforms to improve the business environment and address infrastructure and skills gaps are essential to unlocking growth potential and reducing unemployment and income inequality.

Suggested Citation

  • International Monetary Fund, 2025. "Kingdom of Eswatini: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Kingdom of Eswatini," IMF Staff Country Reports 2025/279, International Monetary Fund.
    • Handle: RePEc:imf:imfscr:2025/279
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