Djibouti: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Djibouti

Following years of high growth led by public investment, consecutive exogeneous shocks have weighed heavily on Djibouti’s economy and on its debt. Nonetheless, with the peace deal in Ethiopia, growth rebounded strongly in 2023. The normalization of the external environment together with Djibouti’s ongoing debt rescheduling discussions with main creditors are expected to reopen policy space, but restoring debt sustainability would require fully addressing the debt burden through a balanced mix of reforms, new concessional financing, and debt relief.