Gabon’s budget deficit widened sharply in 2025, reaching 5.3% of its gross domestic product (GDP), up from 3.8% the previous year, according to the African Development Bank’s 2026 African Economic Outlook. This fiscal deterioration stems largely from an expansionary budget policy paired with a mounting debt burden. Public debt climbed to 78.9% of GDP, a key factor in the country’s sovereign credit rating downgrade in December 2025.
This fiscal imbalance unfolded against a backdrop of slowing economic momentum. GDP growth softened from 3.4% in 2024 to 2.7% in 2025, constrained by declines in oil, mining, timber, and transport sectors. While public works, manufacturing, and services remained resilient, increased government spending to stabilize the economy further strained the budget, amplifying the state’s financing needs.
Mounting fiscal pressures and financial fragilities
The widening deficit has intensified financial vulnerabilities. The African Development Bank points to the Central African States Bank’s monetary easing, which fueled a surge in credit extended to the government and heightened banks’ exposure to sovereign risk. Concurrently, non-performing loans continued to rise, reflecting persistent strains within the domestic financial system.
These fiscal constraints have narrowed the government’s ability to address pressing social challenges. Poverty levels held steady at 33.1% of the population in 2025, while unemployment remained elevated at 20.2%, disproportionately affecting youth and women. For the African Development Bank, sustainable fiscal recovery hinges on tighter expenditure controls, more manageable debt management, and structural reforms to bolster state revenue.
