Burundi’s government has announced an 18% increase in spending for the 2025–26 fiscal year, a bold move aimed at boosting growth but one that also deepens concerns over rising deficits and economic stability. The plan underscores the challenge of stimulating development while managing tight financial constraints.
Budget details and targets
According to Finance Ministry figures, the new budget will rise to about 5.2 trillion Burundi francs (approximately $1.77 billion), up from the current fiscal year’s allocation. Officials say the additional spending will support infrastructure, public services and economic development projects, with the aim of lifting annual growth to 4.6%, compared to this year’s estimated 3.9%.
The fiscal expansion, however, is expected to create a deficit of 436 billion francs, which the government plans to finance through domestic borrowing and external support.
Economic pressures remain
Burundi continues to face significant macroeconomic hurdles, including high inflation, limited foreign reserves and persistent reliance on central bank financing. The country’s dual exchange rate system has also drawn criticism from international institutions for complicating trade and investment flows. The IMF has warned that without structural reforms, further fiscal expansion could put pressure on long-term stability.
Balancing growth and risk
Government officials argue the budget increase is necessary to meet pressing social and economic needs, including investments in health, education and transport infrastructure. Supporters of the move say that without stronger public investment, growth will remain too weak to reduce poverty levels. Critics counter that additional borrowing may worsen debt vulnerabilities and fuel inflation.
Outlook
Whether the new budget delivers stronger growth will depend on Burundi’s ability to attract external financing and implement fiscal discipline. Engagement with the IMF and donor partners will be critical, as will progress in reforming the exchange rate system and strengthening monetary policy credibility. For now, the government’s expansionary stance signals a determination to prioritise development, even at the cost of fiscal risk.
REFH – Newshub, 5 September 2025
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