World Bank forecasts Somalia economy to grow at 3.1 percent in 2023

world bank

The World Bank on Thursday forecast Somalia’s economy to grow at 3.1 percent in 2023, up from 2.4 percent in 2022, and gradually reach 3.8 percent by 2025.

The Bank said these improvements are expected to bring about positive, although very modest per capita income growth.

“As the reforms for Heavily Indebted Poor Countries completion start to bear fruit, growth prospects are likely to improve further. However, the outlook is subject to significant risks including climatic shocks, security threats, and global economic shocks,” the World Bank said in its eighth edition of the Somalia Economic Update, which was launched virtually.

The Bank said recurrent shocks, including a prolonged 2020/2023 drought, disrupted the country’s growth and devastated crops, livestock, and exports since many fled their homes in search of food and water. It said the severe drought, coupled with global commodity price surges, intensified inflation, hampering household consumption.

“To ensure resilience and prosperity, Somalia needs an integrated economic policy that prioritizes water,” the World Bank said.

According to the report, despite economic challenges, Somalia’s public finances strengthened, driven by ongoing reforms supporting stability and recovery.

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