Central Bank of Eswatini reports inflation eased to 2.1 per cent and reserves fell to 2.2 months of import cover

The Central Bank of Eswatini published its January/February 2026 economic update, showing softer price pressures and stronger recent output growth alongside weaker external buffers and slower monetary aggregates. Headline inflation fell to 2.1 per cent in January 2026 from 2.3 per cent in December, while real gross domestic product growth accelerated to 5.8 per cent year on year in the third quarter of 2025. In financial conditions, private sector credit fell 1.4 per cent month on month to E22.1 billion in January 2026 and broad money supply contracted 2.5 per cent to E28.4 billion. The inflation slowdown was driven mainly by slower increases in education and recreation and culture prices, with transport also easing, although food, alcohol and restaurants and hotels recorded firmer price pressures. Official reserves fell for a third consecutive month to E9.5 billion in February 2026, reducing import cover to 2.2 months from 2.6 months in January and leaving it below the 3.0-month threshold cited in the report. The Lilangeni strengthened against major currencies in February, averaging E16.00 against the USD. Total public debt rose to E38.8 billion, or 40.4 per cent of gross domestic product, driven by higher domestic debt including an additional E830 million drawdown on the government advance facility. Eswatini’s trade surplus widened to E162.3 million in February as exports, including sugar and textiles, grew faster than imports.