Central Bank of Eswatini reports first quarter GDP growth rebounded to 6.1 percent as inflation rose and reserves fell

The Central Bank of Eswatini published its May and June 2026 economic review, showing that economic activity strengthened in the first quarter of 2026 while inflation picked up and policy rates were left unchanged. Seasonally adjusted quarterly GDP grew 6.1 percent year on year and 1.1 percent quarter on quarter, up from a revised 5.8 percent year on year in the fourth quarter of 2025, driven mainly by a sharp recovery in the secondary sector, especially manufacturing, utilities and construction. Headline inflation accelerated to 2.7 percent in May from 2.0 percent in April, led by housing and utilities and transport, while core inflation rose to 2.2 percent. The discount rate remained at 6.75 percent and the prime lending rate at 10.25 percent. Monetary and external indicators were mixed. Private sector credit rose to SZL23.9 billion at end-May, up 2.5 percent month on month and 10.6 percent year on year, supported by higher lending to businesses and households, while broad money fell 0.7 percent on the month to SZL26.5 billion. Net foreign assets dropped 20.5 percent month on month to SZL6.7 billion in May, and gross official reserves fell 7.2 percent month on month to SZL8.1 billion at end-June, covering 1.9 months of imports. The lilangeni appreciated in June to an average of SZL16.40 per USD. Preliminary figures put total public debt at SZL42.1 billion, or 40.4 percent of GDP, at end-June, up from SZL41.2 billion in May as both domestic and external debt increased. The June trade deficit narrowed slightly to SZL198.8 million from SZL211.4 million as exports and imports both declined 4.6 percent on the month.