Gabon experienced a significant deterioration in its fiscal balance during 2025, with the budget deficit climbing to 5.3% of the Gross Domestic Product (GDP). This figure represents a sharp increase from the 3.8% recorded the previous year. This downward trend in public finances is primarily the result of an expansionary fiscal policy combined with an increasingly heavy debt burden. By the end of 2025, public debt had surged to 78.9% of GDP, a level that directly contributed to a downgrade of the country’s sovereign credit rating in December.
This fiscal decline occurred alongside a broader slowdown in economic activity. National GDP growth cooled to 2.7% in 2025, down from 3.4% in 2024, largely due to falling production in the oil, mining, and forestry sectors, as well as a slump in transport services. Although the manufacturing, services, and public works sectors performed well, the high levels of public spending intended to support the economy placed further strain on the budget, increasing the state’s need for external financing.
Mounting pressure on public finances
The widening deficit is accompanied by growing financial vulnerabilities across the board. Monetary policy shifts within the Bank of Central African States encouraged a significant rise in credit granted to the government, which has heightened the exposure of commercial banks to sovereign risk. Meanwhile, the volume of non-performing loans continues to rise, highlighting the persistent tensions within the national financial system.
This constrained budgetary environment is limiting the government’s capacity to address urgent social challenges. The poverty rate remained nearly stagnant at 33.1% of the population in 2025, while unemployment stayed high at 20.2%. This job crisis is particularly severe among women and the youth. Establishing a sustainable recovery for public finances will require more disciplined spending, a more manageable approach to debt, and reforms specifically designed to boost state revenue streams.