Mbabane – The Central Bank of Eswatini kept its discount rate at 6.75 per cent following a Monetary Policy Consultative Committee meeting on 20 November 2025. The Bank cited a need to support domestic economic performance and maintain the Lilangeni parity with the South African Rand. The decision took into account global, regional, and domestic economic conditions in line with the Bank’s mandate for price and financial stability.
Headline inflation rose slightly to 2.9 per cent in October 2025 from 2.8 per cent in September. The increase was mainly driven by a surge in prices for alcoholic beverages and tobacco following new levies implemented on 1 October. Banks are expected to maintain the prime lending rate for loans to individuals and businesses at 10.25 per cent until the next policy review.
The Central Bank marginally revised down its short-term inflation forecast for 2025 to 3.20 per cent from 3.24 per cent, citing lower-than-expected food inflation, a stronger exchange rate, and stable oil prices. Medium-term inflation projections were revised upward to 3.97 per cent for 2026 and 3.84 per cent for 2027. 
Eswatini’s real Gross Domestic Product rebounded strongly in the second quarter of 2025, posting year-on-year growth of 3.4 per cent, seasonally adjusted, compared with a revised 1.0 per cent contraction in the first quarter. The recovery was supported by a strong rebound in the secondary sector, positive but slower growth in the tertiary sector, and continued contraction in the primary sector.
Credit extended to the private sector recovered after three months of decline, rising by 2.1 per cent month-on-month to E21.7 billion in September 2025, an 8.9 per cent increase year-on-year. Credit to the business sector grew by 0.9 per cent to E11.6 billion, while credit to other domestic sectors rose by 14.9 per cent following a 9.9 per cent decline in August. Non-performing loans in the banking industry declined by 0.6 per cent month-on-month but were 12.5 per cent higher year-on-year at E1.3 billion, with the NPL ratio falling to 7.1 per cent.
Public debt reached E37.4 billion in October 2025, equivalent to 39 per cent of GDP. Gross official reserves stood at E13.7 billion as of 14 November, providing an import cover of 3.2 months.
Globally, the International Monetary Fund revised up its growth forecast to 3.2 per cent for 2025 and 3.1 per cent for 2026, lower than 3.3 per cent recorded in 2024. Growth in advanced economies is expected to slow to 1.6 per cent in 2025, while emerging markets and developing economies are projected to expand by 4.2 per cent in 2025 and 4.0 per cent in 2026. Global inflation is forecast to decline to 4.2 per cent in 2025 and 3.7 per cent in 2026.
Regionally, South Africa’s economy expanded by 0.8 per cent in the second quarter of 2025 following a 0.1 per cent growth in the first quarter. The South African Reserve Bank revised its 2025 growth forecast to 1.3 per cent and lowered its inflation forecast to 3.3 per cent. The SARB reduced its repo rate by 25 basis points to 6.75 per cent and announced a new inflation target of 3 per cent with a 1 percentage tolerance band.
