Analysis by Region - Emerging Markets - Eswatini

Analysis by Region - Emerging Markets - Eswatini

Eswatini’s mid-term budget review for the 2024/25 fiscal year projects a narrower fiscal deficit than pencilled in when the budget was originally presented in February. This is attributed to improved Southern African Customs Union (Sacu) receipts and reduced capital spending. However, in the following fiscal year, recurrent spending is expected to rise considerably, at a time when Sacu revenues will decline, leading to a wider fiscal shortfall. Increased fiscal spending is premised on the government's overly optimistic economic - and fiscal revenue growth forecast. We expect a deeper fiscal deficit in 2025 than the government's forecast. Nonetheless, rising fiscal spending in 2025 will help to support economic growth. The implementation next year of various delayed infrastructure projects will also contribute to economic growth. Consequently, we have lifted our forecast for 2025's economic growth to 3.1% from 2.4%.