Key messages
The economic recovery remains strong, with growth and fiscal balances
exceeding expectations, robust financial and external buffers, and key economic
sectors resilient to the impacts of Cyclone Ditwah.
1
However, socio-economic indicators remain weak, and households are highly
vulnerable with limited capacity to absorb additional shocks.
2
Medium-term growth and poverty prospects hinge on continued macro stability,
the successful implementation of growth-enhancing structural reforms, and the
pace and scale of post-Ditwah reconstruction.
3
7
Downside risks remain high, particularly from the impact of the conflict in the
Middle East, which has already disrupted normal economic activity and could
further dampen growth and amplify stress on the external position.