S\u00e3o Paulo \u2013 After growing 4.1% in 2024, Somalia\u2019s economy is expected to slow its growth this year, affected by \u201csignificant\u201d foreign aid cuts and climate shocks. This outlook for the North African Arab country comes from the International Monetary Fund (IMF), which released a statement on Sunday (12) following a meeting with local authorities.<\/p>\n\n\n\n
According to the IMF document, Somalia\u2019s economy is expected to grow 3% this year and 3.3% next year. Inflation is projected to remain stable at 3.5% per year. The greatest risk of price increases is in food. The IMF states that the country is subject to \u201cadverse weather shocks.\u201d<\/p>\n\n\n\n
Even with this challenging economic environment, the IMF statement, signed by mission chief Ran Bi, highlights that Somalia\u2019s leaders are committed to increasing domestic revenue and maintaining fiscal discipline.<\/p>\n\n\n\n
These reforms include the ongoing modernization and oversight of customs, the adoption of a new income tax law, and increased monitoring of sales taxes. The IMF also recognizes a strengthening of the regulatory framework of the Central Bank of Somalia (CBS). \u201cSteady progress has also been made to further strengthen the AML\/CFT framework and improve governance,\u201d the statement says.<\/p>\n\n\n\n
The analysis of the country\u2019s accounts and economy was carried out as part of a financial disbursement agreement for Somalia, under an IMF program aimed at financing poor countries. Following the mission, the IMF team approved the release of another installment under this agreement, which could reach a total of USD 100 million, and requested an additional approximately USD 40 million through another financial instrument to offset cuts in foreign aid to the country. These disbursements are subject to approval by the IMF Executive Board. The institution\u2019s experts stated in their release that continued support from Somalia\u2019s partners remains \u201ccrucial.\u201d<\/p>\n\n\n\n
Read more<\/em>: Translated by Guilherme Miranda<\/strong><\/p>\n
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