(Ecofin Agency) - The government of Djibouti will benefit from $43 million (SDR31.8 million, or 100% of Djibouti’s quota) granted by the International Monetary Fund under the Rapid Credit Facility (RCF) to meet the urgent balance of payments needs stemming from the coronavirus pandemic.
IMF has also approved a debt relief under the Catastrophe Containment and Relief Trust, allowing the country to benefit from up to $2.3 million additional resources over the next 5 months and up to $8.2 million over the next 23 months.
The arrival of this pandemic has heavily dampened the short-term macroeconomic outlook of Djibouti, creating urgent spending needs, including in the health sector, and is also expected to harm government revenue.
IMF support “will provide additional resources for the essential health and other emergency spending, including social safety nets,” the institution said.
According to IMF projections, Djibouti's economic growth is expected to fall sharply to 1% of GDP in 2020, far below the 7.5% and 8.4% in 2019 and 2018 respectively.