The International Monetary Fund has cut Liberia’s 2025 growth forecast to 4.6% from 5.6% projected in February, according to an IMF Executive Board report posted on the Fund’s website.
The reduction — a one percentage-point downgrade or roughly an 18% decline in the projected growth rate follows the second review of Liberia’s program under the IMF’s External Credit Facility.
The Fund said real GDP growth in 2024 was 4.0%, down from 4.6% in 2023. Inflation also accelerated sharply, rising to 10.7% in 2025 from 8.2% the previous year, the report noted.
Despite improvements in fiscal management and policy reforms, the IMF cited persistent inflation and other headwinds.
The outlook brightens in 2026, however, with the Fund projecting growth of 5.4% driven by expected expansion in mining activity—particularly gold and iron ore and a recovery in agricultural production.
Full details of the second review remain limited: Liberian authorities requested that the IMF not publish the complete content of the review. The Fund said it will release the staff assessment of the economy after 28 days.
IMF directors urged Liberia to continue implementing structural reforms to unlock growth potential and strengthen climate resilience. They emphasized intensified anti-corruption measures and improvements to the country’s governance framework to ensure institutional integrity.
Directors also called for robust debt management to avoid the accumulation of new external arrears and recommended sustained efforts to preserve fiscal discipline, bolster financial stability, strengthen public governance, and support private sector development to raise living standards and reduce poverty.
Unlike the Boakai’s government, Liberia in 2023, made significant gains in IMF Forecast.
According to IMF Global outlook, Liberia’s economy showed signs of improvement in 2023, with Real GDP Growth reaching 4.6%.
Economic Factors
The economy benefited from expansion in the mining, services, and agriculture sectors However, despite these gains, the IMF report noted that the country faced challenges including high inflation, which averaged 10.1%, and a large current account deficit.
The fiscal deficit for 2023 was 7.1% of GDP, with public debt at 57.8%.Liberia’s reliance on commodity exports makes it vulnerable to global market conditions.
Unlike this period, Projections for Liberia’s fiscal deficit in 2025 vary slightly depending on the reporting agency, but multiple sources confirm the Liberia is experiencing a budget shortfall. The International Monetary Fund (IMF) and the African Development Bank (AfDB) forecast a deficit as a percentage of Gross Domestic Product (GDP), while domestic reports focus on the monetary value of the shortfall.
Budget shortfall in 2025
The Liberia Revenue Authority (LRA) reported a substantial budget shortfall of US$22.03 million in the first quarter of 2025, an increase from the US$17.8 million projected by the House of Representatives. Reports also indicates that the Liberian government may be facing its second budget shortfall under President Joseph Boakai’s administration for the 2025 fiscal year.
The Boakai’s government has attributed the shortfall to weak revenue collection and non-compliance by some State-Owned Enterprises (SOEs).
Fiscal deficit projections
African Development Bank (AfDB), In its June 2025 report, the AfDB projected that Liberia’s fiscal deficit would reach 4.5% of GDP in 2025, a slight increase from its 2024 forecast. A forecast model by Trading Economics predicts the government budget to be -3.4% of GDP by the end of 2025.
A February 2025 World Bank document stated that Liberia’s fiscal deficit was expected to average 2.6% of GDP from 2025 to 2027, assuming the implementation of fiscal consolidation measures.
Factors influencing the deficit
Analysts have criticized the government for setting ambitious revenue targets that frequently go unmet, leading to repeated budget shortfalls.
Structural inefficiencies, including tax evasion and insufficient enforcement of fiscal laws, continue to hinder domestic resource mobilization.
A significant portion of Liberia’s 2025 budget, approximately 88%, is allocated to recurrent expenses, including debt servicing, high salaries, and other operational costs, leaving little room for error.
Some projections anticipate an increase in government expenditure, which contributes to the widening fiscal deficit.
