IMF lowers the growth forecast for Somalia's economy for 2026

Mogadishu, October 6, 2026 – The International Monetary Fund (IMF) has lowered its growth forecast for Somalia's economy for the year 2026, now estimated at 2.3%, as the country's economy is affected by a decline in foreign aid, droughts, climate challenges, and the impact of conflicts in the Middle East.

IMF stated that Somalia faces compounded challenges, including cuts in international aid since 2025, recurring droughts, worsening climate conditions, and the economic impact of regional conflicts.

An IMF team led by Ran Bi held discussions with Somali officials between September 21 and October 1, which were part of the IMF's annual economic assessment.

The agency projected that Somalia's economic growth could reach 2.7% by 2027, while medium-term growth is expected to reach 4%, provided that significant economic and financial reforms are implemented.

On the other hand, inflation in Somalia is expected to reach 6.5% in 2026, with the IMF citing prolonged drought and disruptions to global trade as the main causes.

IMF also warned that further declines in aid, new conflicts in the region, and worsening climate conditions pose risks to Somalia's economy.

The agency called for strengthening tax collection, customs, and domestic revenue, while also emphasizing the importance of improving government financial management, boosting trade, and investing in domestic production.

The IMF has pointed out that remittances from abroad remain an important source that helps Somali families with income and access to foreign currency, but there are still vulnerabilities in the external economy.

Additionally, the IMF has recommended continuing investment in education and resilience to climate change, in order to create a sustainable economic foundation.

The IMF has emphasized that ongoing support from donors is crucial for Somalia, especially if the risks that could undermine economic growth continue to intensify.