Djibouti Economic Outlook
- Growth of about 7.4% is forecast for 2016, compared to 6.7% in 2015 and 6% in 2014, an improvement which has not prevented widespread poverty or unemployment.
- The budgetary deficit improved in 2015, but the country’s level of debt remains critical, with a service economy centred on transport.
- Activities and jobs are largely concentrated in the capital, which has led the government to contemplate the development of economic hubs in the country’s interior.
Djibouti has a dual economy. On the one hand, it has a modern sector, based on rental revenue from the ports and military bases rented by foreigners. On the other hand, it still has a large informal sector. The economy is focused on services, in particular transport and related services, due to the country’s geostrategic position on the Gulf of Aden, at the intersection of maritime corridors important to the transport of goods and oil. The construction, hotel and telecommunication sectors are growing but are not yet significant. The Chinese investment of the past three years could change the economy’s structure, given the development of special economic zones (SEZs) to attract processing industries as part of global value chains.
Djibouti is developing its infrastructure, particularly its ports, to promote rapid growth and reduce poverty. Led by major investment projects, the growth of recent years (6.7% in 2015 and 6% in 2014) will continue, with rates of 7.4% and 7.1% forecast for 2016 and 2017. Despite this upturn, extreme poverty and unemployment remain endemic. Critically, Djibouti’s debt was 65.8% of GDP in 2015 and is expected to reach 75.8% in 2016 before reaching the 79% threshold in 2017, placing the country at high risk of over-indebtedness.
To face these challenges, since March 2014 a new strategic framework, Djibouti Vision 2035, is aimed at the country’s economic emergence by that date. Its first medium-term product is a five-year strategy for rapid growth and job creation (Stratégie de croissance accélérée et de promotion de l’emploi, Scape), launched in August 2015.