The International Monetary Fund (IMF) said debt increased from 40% of gross domestic product in 2024/25 to 44.8% in 2025/26. The fiscal deficit widened sharply from 1.1% to 7.8% over the same period.
Lower Southern African Customs Union revenue, increased capital expenditure, a substantial public-service wage adjustment and higher non-wage spending contributed to the deterioration.
Interest payments reached 3% of gross domestic product, exceeding social-benefit spending of 2% and amounting to more than half of capital expenditure.
The Fund said implementing the government’s medium-term consolidation plan was critical to placing debt on a sustained downward path. Debt is projected to decline to 48.2% by 2031/32 before moving towards a recommended long-term anchor of 40%.
Economic growth strengthened from 3% in 2024 to 4.9% in 2025, supported by large public and private investments in energy, water, roads, manufacturing and other infrastructure.
Growth is forecast to moderate to 3.7% in 2026 and average about 3.3% over the medium term, remaining above the 20-year average of 2.9%.
Inflation averaged 3.1% in 2025 and stood at 2.5% in July 2026. However, fuel prices had increased by a cumulative 39% by September, while drought-related food pressures could drive inflation higher.
The IMF warned that incomplete fiscal reforms, prolonged Middle East conflict, tighter financing conditions, foot-and-mouth disease and El Niño-related climate shocks could weaken the outlook.
Despite stronger growth, unemployment remained at 33.5% in 2025, while youth unemployment stood at 52.2%.
The IMF called for civil-service and public-enterprise reforms, tighter expenditure controls, improved tax administration and more efficient public investment.
Digitalisation, responsible artificial intelligence adoption and electronic government services could improve transparency, reduce regulatory costs and support private-sector growth.
However, only 58% of the population used the internet despite fourth-generation mobile networks reaching 95%, partly because of high data costs and limited digital skills.
The Fund said eSwatini must continue investing to create employment and raise living standards while rebuilding fiscal and foreign-exchange buffers.
–IMF/ChannelAfrica–
