Gabon’s fiscal health took a significant hit in 2025, with the budget deficit ballooning to 5.3% of GDP, up from 3.8% the previous year, according to the African Development Bank’s African Economic Outlook 2026. This sharp deterioration stems from an expansionary fiscal policy paired with a mounting public debt burden, which surged to 78.9% of GDP. The rising debt levels played a key role in the country’s sovereign credit rating downgrade in December 2025.
The economic slowdown further compounded the fiscal strain. GDP growth decelerated from 3.4% in 2024 to 2.7% in 2025, dragged down by declining output in oil, mining, forestry, and transportation sectors. While sectors like public works, manufacturing, and services showed resilience, the state’s heavy spending to prop up the economy widened the budget gap, intensifying the need for additional financing.
Mounting financial pressures on Gabon’s public sector
The widening deficit has intensified financial vulnerabilities. The Central African States Bank’s monetary easing fueled a sharp rise in credit extended to the government, exposing banks to heightened sovereign risk. At the same time, non-performing loans continued to climb, signaling persistent stress within the national financial system.
This fiscal squeeze has severely limited the government’s ability to address pressing social challenges. Poverty levels remained nearly unchanged at 33.1% of the population in 2025, while unemployment stayed high at 20.2%, disproportionately affecting youth and women. Sustainable fiscal recovery, the African Development Bank argues, hinges on stricter spending controls, more sustainable debt management, and structural reforms to bolster state revenue.
