Somalia Economic Update May 2026 | Edition No. 11: Navigating Shocks, Powering Growth

Country: Somalia Source: World Bank Please refer to the attached file. Somalia’s Growth Continues, But Shocks and Aid Cuts Intensify Risks to Jobs and Livelihoods NAIROBI, May 13, 2026 : Somalia’s economic growth moderated to an estimated 3 percent in 2025, down from about 4 percent in 2023–24, as declining foreign aid, drought conditions, and rising living costs weighed on demand and left real GDP per capita broadly stagnant. These findings are highlighted in the Eleventh Edition of the Somalia Economic Update (SEU) 2026 : Navigating Shocks, Powering Growth , released today by the World Bank Group. The economic slowdown reflects reduced humanitarian and security-related assistance, drought impacts on agriculture and livelihoods, and higher costs that constrained household spending. Inflationary pressures accelerated with consumer price inflation reaching 3.7 percent in 2025 compared to 3.3 percent in 2024, driven mainly by food, utilities, and transport costs. “Somalia has made important progress in strengthening macroeconomic management and institutions under difficult conditions,” said Hideki Matsunaga, World Bank Group Country Manager for Somalia . “However, overlapping shocks are slowing growth and putting pressure on jobs and household livelihoods, underscoring the importance of addressing key structural constraints, particularly in expanding access to reliable, affordable, and sustainable electricity.” The SEU notes that poverty reduction stalled in 2025 as the reduction in aid, drought conditions, and rising food prices worsened food insecurity and constrained household welfare. Looking ahead, poverty reduction is expected to remain gradual and constrained, with food insecurity highly sensitive to rainfall outcomes, aid flows, and price shocks. The ou...

Original source: Relief Web