Gabon’s budget deficit hits 5.3% of gdp in 2025 as public debt climbs

Gabon’s budget deficit widened sharply in 2025, reaching 5.3% of gdp, up from 3.8% a year earlier. The deterioration in public finances is largely due to an expansionary fiscal policy and a rising debt burden. Public debt climbed to 78.9% of gdp, a level that contributed to the downgrade of the country’s sovereign rating in December 2025.

This comes amid an economic slowdown. Gdp growth dropped from 3.4% in 2024 to 2.7% in 2025, hurt by declines in oil, mining, forestry, and transport output. Although public works, manufacturing, and services performed well, government spending to support the economy further strained the budget balance, increasing the state’s financing needs.

Growing pressure on public finances

The widening deficit is accompanied by rising financial vulnerabilities. The loosening of monetary policy by the central bank has led to a sharp increase in credit extended to the government, heightening banks’ exposure to sovereign risk. Meanwhile, non-performing loans continue to rise, reflecting ongoing strains in the domestic financial system.

This fiscal situation limits the government’s ability to address social challenges. Poverty remained nearly unchanged at 33.1% of the population in 2025, while unemployment stayed high at 20.2%, affecting especially youth and women. Sustainable fiscal recovery will require better spending control, more sustainable debt management, and reforms to boost state revenues.