The IBA Africa 2027 Outlook projects Eswatini's economic growth to slow to 3.5% in 2027, below the Central Bank's 4.1% forecast. The outlook forecasts growth of 4.0% this year before moderating next year. Eswatini is described as a small-market economy of about 1.2 million people. The report identifies jobs, housing, skills, and service delivery as important socio-economic transmission channels.
The forecast is more conservative than the latest Central Bank of Eswatini (CBE) projection. In its September 25 monetary policy statement, the CBE said the economy grew by 4.8% in 2025 and is projected to expand by 5.3% in 2026 before moderating to 4.1% in 2027. The Central Bank attributed the stronger momentum mainly to a rebound in the secondary sector, which includes manufacturing, construction, and electricity.
The difference between the two forecasts places the IBA outlook's 2027 growth projection 0.6 percentage points below the CBE's latest baseline. Both forecasts anticipate a moderation from stronger activity in the near term. The outlook also points to the continued importance of regional revenue and trade flows. Government's 2026/27 budget projects SACU receipts of E11.7 billion, up from E10.4 billion.
The IBA outlook sees inflation rising moderately, from 3.5% in 2026 to 3.8% in 2027. The Central Bank of Eswatini (CBE) has a slightly different inflation path, revising its 2026 forecast down to 2.52% and its 2027 forecast to 3.86%. Inflation stood at 2.8% last month. Despite lower inflation expectations, the CBE raised its discount rate by 25 basis points to 7.0% on September 25.
The country's fiscal deficit is projected to widen to 6.9% of GDP next year, according to the IBA Africa 2027 Outlook, highlighting continued pressure on public finances. The outlook also places public debt at 50% of GDP next year and forecasts a current-account deficit of 1.8% of GDP. The projection comes against a government budget that targets a smaller deficit of 4.9% of GDP, equivalent to E5.02 billion, for the 2026/27 financial year.
Minister of Finance Neal Rijkenberg said the budget was built around economic growth and job creation, while government continues efforts to manage expenditure. One area under pressure is the public-sector wage bill. Government budgeted E12.44 billion for public servants in 2026/27, up from E10.48 billion in the previous financial year, partly reflecting implementation of the salary review.
Key points
- Eswatini's economic growth is projected to slow to 3.5% in 2027.
- The country's fiscal deficit is projected to widen to 6.9% of GDP next year.
- The outlook identifies regulatory predictability as relevant to sovereign and project risk.
