BUJUMBURA, March 17th (ABP) – The Bank of the Republic of Burundi (BRB) will strengthen coordination of monetary and fiscal policies with the Ministry responsible for Trade to ensure the effectiveness of monetary policy instruments. This information was disclosed by Edouard Normand Bigendako, Governor of the Bank of the Republic of Burundi (BRB), during a session in which he issued the BRB’s monetary policy statement for the first quarter of 2025. The statement was released on Thursday, March 13, 2025, after a meeting with members of the Monetary Policy Committee.
According to the International Monetary Fund’s (IMF) January 2025 economic outlook, global growth is estimated at 3.2% in 2024 and 3.3% in 2025. This growth would remain slow and below the historical average of 3.7% from 2000 to 2019, Bigendako explained.
In the East African Community, Bigendako explained, the IMF’s regional outlook shows that economic growth is expected to reach 5.4% in 2024 and reach 5.9% in 2025. However, these forecasts could be hampered by vulnerabilities, including the political and security crisis in the sub-region and the continued tightening of financing conditions. Inflationary pressures have declined sharply in the East African Community (EAC) countries, with average inflation of 3.1% in four countries (Kenya, Uganda, Tanzania, and Rwanda).
Regarding the national economic situation, he explained, the committee also noted an 87.2% increase in green coffee production in the fourth quarter of 2024, following the rise in the production of parchment coffee. However, it noted a 22.4% decrease in dry tea production, due to the disruption in the frequency of green leaf harvesting and milling.
He added that the February 2025 macroeconomic framework estimates indicate that economic growth could reach 3.9% in 2024 compared to 3.3% in 2023, following the strong performance of the tertiary sector, specifically the “Banking and Insurance” and “Public Administration” branches, as well as the “Postal, Telecommunications, and Internet Services” sub-branch. For the year 2025, GDP growth of 4.6% is expected, attributable to the improvement in activity in the primary sector on the one hand, mainly in the “Food Agriculture” branch, and on the other hand, to the acceleration of growth in the secondary sector, driven by extractive activity.
According to him, the balance of payments for the fourth quarter of 2024 shows an easing of the current account deficit. This easing results from the reduction in the deficit in the goods account, combined with the increase in the structural surplus in the secondary income account. The Governor of the BRB highlighted that public debt increased by 15.1% at the end of December 2024, mainly due to the 20.5% increase in domestic debt, which represents more than 70% of total public debt. He noted that, expressed as a percentage of GDP, total public debt will represent 50.4% at the end of December 2024.
Regarding the conduct of monetary policy, the Governor of the BRB indicated that this policy has been marked by the continuation of a restrictive monetary policy aimed at containing inflationary pressures. In the fourth quarter of 2024, the key rate was maintained at 12%. The BRB also issued Regulation No. 004/2024 relating to operations involving securities issued by the Bank of the Republic of Burundi, a new monetary policy instrument adopted since March 2024 to manage liquidity.
Compared to the consumer price index, as published by the National Institute of Statistics of Burundi, Bigendako indicated that the price level in the fourth quarter of 2024 accelerated, with the inflation rate reaching, on average quarterly, 30.0% compared to 20.1% in the third quarter of 2024. This increase concerned food inflation which stood at 29.0% compared to 17.5%, core inflation 31.2% compared to 21.2%, and energy inflation 34.0% compared to 31.9% from one quarter to the next, he justified. Previous inflation forecasts for the fourth quarter of 2024 were 24.9% while the actual figures were 30.0%. This gap is mainly linked to exogenous factors, notably the persistence of the transport disruption.
For the first quarter of 2025, he reiterated, forecasts indicate persistent inflationary pressures. This increase is likely to be accentuated by regional geopolitical dynamics, which could put pressure on the markets, according to him.
Continuing on this, Bigendako reported that, based on these recent macroeconomic developments, the Monetary Policy Committee considers that inflationary pressures persist, while inflation expectations are high despite the restrictive monetary policy stance. “To this end, the Bank of the Republic of Burundi remains determined to take all necessary measures to gradually bring inflation back to around its 8.0% target in the medium term,” he declared.
The Governor of the BRB thus announced the measures taken by the BRB to address those challenges. He affirmed that the BRB will focus its efforts on ensuring fuel supplies, in collaboration with its partners in the sector. Second, the BRB took steps to maintain the key interest rate at 12% and accelerate reforms to modernize payment systems to improve the transmission of monetary policy.
Bigendako also announced that the BRB intends to modernize the management of money market and foreign exchange operations, while maintaining transparent and regular communication with all economic stakeholders to anchor the inflation expectations of economic agents.