Gabon’s budget deficit deepened significantly in 2025, climbing to 5.3% of its gross domestic product (GDP), up from 3.8% the previous year, according to the African Development Bank’s African Economic Outlook 2026. This fiscal deterioration stems from an expansionary fiscal policy paired with a mounting public debt burden. National debt has now surged to 78.9% of GDP, a figure that played a key role in the country’s sovereign credit rating downgrade in December 2025.
Economic slowdown fuels fiscal strain
The widening deficit coincides with a slowdown in economic momentum. GDP growth slipped from 3.4% in 2024 to 2.7% in 2025, constrained by declining output in oil, mining, forestry, and transportation sectors. Though construction, manufacturing, and services showed resilience, increased public spending to stimulate the economy further strained the budget balance, amplifying the state’s financing needs.
Financial system under heightened pressure
The deficit expansion has intensified financial vulnerabilities. The African Development Bank highlights that looser monetary policy by the Central African States Bank fueled a sharp rise in credit extended to the government, exposing banks to greater sovereign risk. At the same time, non-performing loans continue to climb, signaling persistent strains within Gabon’s financial system.
Social challenges persist amid fiscal constraints
This fiscal strain tightens the government’s ability to address pressing social issues. Poverty levels remained nearly unchanged at 33.1% of the population in 2025, while unemployment rose to 20.2%, disproportionately affecting young people and women. Sustainable fiscal recovery, according to the African Development Bank, hinges on tighter spending controls, more sustainable debt management, and structural reforms to bolster state revenue.