Burundi’s inflation falls to 8.4% as IMF team reviews stabilisation drive

Burundi’s annual inflation rate fell to 8.44 per cent in August, from 34.44 per cent a year earlier. The finance ministry released the figures this week, at the start of a week of talks with a visiting delegation from the International Monetary Fund.

The figures came out after the first day of meetings between Alain Ndikumana, the finance minister, and an IMF team led by Alexandre Chailloux, the Fund’s mission chief for Burundi. The ministry also reported two other changes. Domestic revenue rose 42.5 per cent in the 2025-26 fiscal year. The premium of the parallel exchange rate over the official rate narrowed from 150.16 per cent to 98.28 per cent. The ministry did not say which dates the exchange-rate comparison covers.

The improvement follows one of the worst price crises in the country’s recent history. According to the IMF, year-on-year inflation fell from about 45.5 percent in April 2025 to 10.8 percent in March 2026. The August reading puts inflation close to the 8 per cent target of the central bank, the Bank of the Republic of Burundi (BRB). The IMF has credited improved coordination between fiscal and monetary policy for the decline.

Much of the relief came from abroad. Higher world prices for gold and coffee, Burundi’s main exports, and larger gold volumes, which rose from about 400 kg in 2024 to 1.2 tons in 2025, sharply increased export revenue and foreign currency inflows. Spending restraint at home also played a part. Fund staff reported in May that the government had not drawn on BRB advances to finance the deficit so far that fiscal year. They also projected that the overall fiscal deficit would narrow to 3.4 percent of GDP in 2025/26 from 5.5 percent in 2024/25.

The ministry described the talks as a way to consolidate the gains of its Macroeconomic Stabilisation Programme for 2025 to 2027. This is a government plan, and the IMF is not lending against it. Burundi agreed a 40-month Extended Credit Facility worth about US$261.7 million with Fund staff in 2023. A first-review mission in January 2024 ended without agreement, and IMF lending records show the arrangement expiring on 16 January 2025. In October last year, Burundian outlet Ikiriho reported that Ndikumana said that, even without a formal IMF programme, Burundi was already carrying out its own government-designed recovery plan.

This week’s sessions include officials from public administrations, the BRB, the private sector (banks in particular) and civil society. According to the ministry, the agenda covers fiscal and monetary policy, revenue collection, prospects for agriculture, energy and mining, and the effect of climate shocks on output and food security.

The headline figure gives an incomplete picture. The 12-month moving average of inflation was still 14.3% in August 2026. In May, IMF staff said they expected inflation to rise slightly in the second half of the year, averaging 14.5 percent in 2026, and to settle in a 10-12 percent range over the medium term, above the central bank target.

The ministry’s revenue figure also needs context. Revenue grew 42.5 per cent in nominal terms during a year of steep price increases. The IMF also found that revenue up to March 2026 fell short of target, particularly non-tax revenue. Staff put public debt at 42 percent of GDP at end-2025 and judged it sustainable but at high risk of debt distress.

The exchange rate is the most sensitive issue. The BRB’s official rate stood at about 3,002 Burundian francs to the dollar on 6 August 2026, while the parallel-market rate is roughly double that. The IMF has urged Burundi to phase out the dual exchange rate to reduce distortions, support competitiveness and strengthen foreign currency inflows. It has also called for real policy rates in positive territory to anchor inflation expectations.

Mr Chailloux said in May that Burundi’s outlook was positive “provided that the current reform momentum is sustained” and external conditions return to normal. The Fund also listed risks. These include global disruptions, notably the war in the Middle East, as well as revenue shortfalls, capacity constraints, political economy pressures and delays in governance reforms.

The Fund recently increased its presence in Burundi. President Évariste Ndayishimiye received Christopher Faircloth, the IMF’s new resident representative, on 22 October. The IMF has not yet published its own assessment of this week’s talks. In May, its staff said that eased external pressures made this an opportune time to move toward restoring equilibrium in the currency market. The ministry’s published agenda for the talks does not mention exchange-rate reform by name.