flag Djibouti Djibouti: Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

After being hit by the global financial crisis, drought and rising raw material prices, Djibouti's economy regained a positive momentum in 2019, growing by 7.5%. However, due to the outbreak of the Covid-19 pandemic, GDP growth decelerated sharply, reaching only 1% in 2020 (IMF). According to IMF estimates, economic growth recovered to 5% in 2021 and should further strengthen to 5.5% in 2022 and 6% in 2023 (IMF), driven by rising demand for logistics and transhipment services and the resumption of public and private investment in infrastructure (Coface).

In 2021, Djibouti’s economy benefited from the recovery in international and regional trade, after being hit by the drop in external demand and by the prevention and containment measures taken domestically in response to the pandemic (IMF). The crisis and policy response (with expenditure equivalent to 2.6% of GDP) lead to a widening of the fiscal deficit to -1.7% GDP in 2020 (Coface). The deficit slightly decreased to -1.6% GDP in 2021 and is expected to further narrow to -1.3% GDP in 2022 (Coface). Despite the end of crisis support measures, increased capital investment spending will temper budget deficit reduction. Due to large investments in infrastructure projects, public debt increased from 50.2% GDP in 2015 to 73.3% GDP in 2020 (Coface). While declining, it was estimated at 71.5% GDP in 2021 and forecast at 70% GDP in 2022, still putting the country at a high risk of over-indebtedness (Coface). IMF estimates debt levels at 42.3% GDP in 2021, 40.3% GDP in 2022 and 39.6% GDP in 2023. Almost entirely external, public debt is mainly owed to China (70% of total public debt in 2021), but the country is seeking to diversify its sources of financing in favor of less costly multilateral sources (Coface). Inflation decreased from an estimated 1.8% in 2020 to 1.2% in 2021, and it is expected to remain stable at 2% in 2022 and 2023 (IMF). The monetary policy based on pegging the national currency to the US dollar results in low and stable inflation. Food and energy prices could nonetheless exert upward pressure (Coface). Promoting a strong and inclusive recovery and preserving medium-term debt sustainability is a priority. The government will also pursue the Vision Djibouti 2035 strategy, which aims to transform the country into a middle-income economy and a logistics and commercial hub for East Africa. Other challenges include poor governance, the increasing dependency on Ethiopia and China, and the widening gap separating the modern portion of the economy and the archaic informal portion on which the population is largely dependent (Coface). In addition, the deterioration of economic and security climate among Djibouti's major economic partners (Yemen, Somalia and Ethiopia) poses risks to the country's economy, which accommodates an increasing number of refugees fleeing the conflict in Yemen.

Despite positive economic indicators, Djibouti remains a poor country with a high unemployment rate of 28.39% of the total labour force in 2020 (World Bank, modeled ILO estimate), vast inequalities and a low level of education. The population as a whole draws little benefit from the income derived from hosting foreign garrisons and port activities, considering that around 16% of the population is living below the poverty line of 1,90 USD per day and more than a fifth of the population lives in extreme poverty (World Bank). Djibouti is ranked 166/189 in the UN Human Development Index.

 
Main Indicators 20202021 (e)2022 (e)2023 (e)2024 (e)
GDP (billions USD) 3.18e3.373.733.984.35
GDP (Constant Prices, Annual % Change) 1.2e4.83.65.06.0
GDP per Capita (USD) 3e3334
General Government Gross Debt (in % of GDP) 44.046.050.153.554.3
Inflation Rate (%) 1.81.26.61.93.0
Current Account (billions USD) 0.36-0.02-0.18-0.13-0.07
Current Account (in % of GDP) 11.3-0.7-4.8-3.2-1.6

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

Note: (e) Estimated Data


 
Monetary Indicators 20162017201820192020
Djibouti Franc (DJF) - Average Annual Exchange Rate For 1 GBP 239.96228.73237.11222.13227.85

Source: World Bank - Latest available data.

 

Main Sectors of Industry

Agriculture carries no weight in the economy.
Industry accounts for a fifth of the Djiboutian gross domestic product.
The tertiary activity contributes to more than 80% of Djibouti's wealth. The manufacturing and services sectors completely depend on the port activities.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 24.5 13.4 62.0
Value Added (in % of GDP) 1.3 16.2 70.2
Value Added (Annual % Change) 3.5 2.0 0.1

Source: World Bank - Latest available data.

 

The Active Population in Figures

201820192020
Labour Force 406,886414,572412,419

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 63.82%63.75%63.70%
Men activity rate 72.63%72.33%72.08%
Women activity rate 53.89%54.06%54.24%

Source: International Labour Organization, ILOSTAT database

 

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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:
56,2/100
World Rank:
126
Regional Rank:
22

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:
6/7

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:
176/180

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Sources of General Economic Information

Main Online Newspapers and Portals
Djibouti information Agency
Jeune Afrique, Information on Djibouti
allAfrica.com, Djibouti News
Djibouti News Sites
afrol News, Djibouti
La Nation
Useful Resources
Ministry of Economy, Finance, Planning and Privatization
Central Bank
 
 

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Latest Update: October 2022

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