MOGADISHU (Xinhua) — Somalia’s gross domestic product (GDP) fell slightly to 4.1 percent in 2024, down from 4.2 percent in 2023, the national statistics bureau has said.

GDP per capita in current prices rose to 737 U.S. dollars in 2024, from 694 dollars in 2023, the Somali National Bureau of Statistics (SNBS) said in its 2024 GDP report released Sunday.

“Strong growth in overseas remittances and grants appears to have financed higher levels of household consumption and continued strength in fixed investment, with this extra demand largely met through a surge in imports of goods and services,” the report said.

It said the grants were partially offset through strong export growth, particularly due to high demand for agricultural products, although the trade deficit widened further in 2024.

Experts say Somalia’s economy has been facing significant challenges, resulting in a contraction of economic growth and an increase in poverty. They blame several factors, including recurring droughts, floods, locust infestations, the COVID-19 pandemic, and ongoing conflict.

According to the SNBS, the principal export of livestock contracted in 2024, but levels remain very high due to rising demand from Middle East trading partners.

“Overseas transfers largely in the form of remittances from the Somali diaspora and international aid provide significant support to household incomes and development finance and contribute to international reserves, help finance imports, and improve Somalia’s current account position,” the SNBS said.

Remittances are often countercyclical, helping to sustain consumption and investment during potential economic downturns, the report said.

The bureau noted that while exports of goods and services grew to over 30 percent of GDP, imports of goods and services have been much larger, at nearly 100 percent of GDP.

In 2024, exports of goods and services increased by 42.3 percent overall in constant prices, in particular due to a surge in demand for crops and vegetable oils, the bureau said.

Imports of goods and services grew by 28.5 percent at constant prices, with notable increases in imports of food, clothes and footwear, and medical products.

The SNBS said investment in construction continued to grow, while growth in investment in equipment and machinery has accelerated in recent years.

“In large urban centers there is a growing demand for property, both commercial and residential, driving demand for (largely imported) construction materials and also contributing to increased employment in the sector,” the bureau said.

Source: Xinhua