Burundi’s economy is projected to grow by around 3.6% in 2025, but the expansion is being severely undermined by runaway inflation, estimated at nearly 40%, which continues to erode household incomes and financial stability.
Energy project offers hope
The commissioning of the Kabu 16 hydroelectric power station, adding 20 MW to the national grid, represents a rare positive development. Improved electricity access is expected to support industrial capacity, reduce reliance on imported fuel and strengthen the foundation for digital connectivity.
Inflation squeezes households
Food and fuel prices remain the largest contributors to inflation, with urban and rural households alike facing severe cost pressures. High inflation has stifled consumer confidence, curbed domestic demand and created uncertainty for local businesses. Economists warn that without credible policy reforms, the inflationary spiral could destabilise growth prospects.
Fintech and microfinance resilience
Despite the challenging macro environment, Burundi’s microfinance institutions and digital banking initiatives are expanding. Mobile wallet adoption is growing, particularly in urban areas, offering households and small businesses an alternative to cash-based systems vulnerable to volatility. With new energy infrastructure reducing outages, fintech operators see opportunities to scale services to underserved rural regions.
Outlook
Burundi faces a precarious balance between growth potential and inflationary risk. The success of energy and digital financial initiatives will be crucial in stabilising the economy and providing a pathway for greater inclusion. Without decisive inflation control, however, gains could remain fragile.
REFH – Newshub, 26 August 2025
