Burundi has halted direct central bank financing of government spending, marking a major shift in economic policy that the International Monetary Fund says has helped curb inflation and restore macroeconomic stability.
The IMF said authorities have frozen financing from the central bank, known as the Banque de la République du Burundi (BRB), ending a practice that had contributed to rapid growth in money supply and rising prices in recent years.
The policy change forms part of a broader Macroeconomic Stabilization Plan adopted by the government in January that aims to reduce inflation, strengthen public finances and ease pressure on the country’s foreign-exchange market.
“The Government did not draw on BRB advances to finance the deficit so far this fiscal year,” IMF staff said after completing consultations with Burundian authorities in May.
Economists generally refer to central bank financing of government deficits as “monetary financing” because it effectively creates new money to fund public spending.
The IMF has repeatedly argued that limiting such financing is essential to controlling inflation.
Burundi’s inflation rate has fallen sharply over the past year. Annual inflation declined from about 45.5% in April 2025 to near 10% by early 2026, according to IMF estimates, reflecting tighter fiscal and monetary policies.
The Fund credited improved coordination between fiscal authorities and the central bank for the disinflation trend.
The policy shift has also coincided with stronger public finances. The overall fiscal deficit is projected to narrow to 3.4% of GDP in the current fiscal year from 5.5% a year earlier, while public debt has fallen significantly.
However, the IMF warned that maintaining discipline will become increasingly important as Burundi approaches the 2027 elections.
Directors urged authorities to continue tightening monetary policy, actively manage liquidity and avoid a return to deficit financing through the central bank.
The Fund also noted that tighter monetary conditions have had side effects, including slower growth in credit to the private sector, raising concerns about access to financing for businesses.
Still, IMF directors described the end of monetary financing as a key pillar of Burundi’s stabilization efforts and said preserving the policy would be critical to sustaining lower inflation and rebuilding confidence in the economy.
