The Central Bank of Eswatini (CBE) has released its comprehensive macroeconomic review for the April and May 2026 period, indicating sustained annual economic momentum balanced by emerging near-term fiscal pressures.
According to the official regulatory statement, domestic productivity and private sector credit show positive trajectories, but a sharp monthly contraction in the national trade surplus,
creeping consumer inflation and a drawdown on gross official reserves are introducing structural challenges to the economy. 
According to the central bank’s updated figures, domestic economic activity, measured through the Quarterly Gross Domestic Product (QGDP) recorded a 5.7 percent expansion year-on-year on a seasonally adjusted basis for the final quarter of 2025.
Although this highlights a robust baseline for national output, the data marks a minor moderation from the revised 5.9 percent expansion registered in the third quarter of 2025.
On the consumer front, a five-month sequence of easing price pressures came to a halt as headline inflation rebounded to 2.0 percent in April 2026, up from the 1.6 percent baseline recorded during March.
The central bank attributed this shift to changing dynamics in consumer prices.
In a strategic move to maintain macroeconomic stability,
the CBE Monetary Policy Committee chose to hold benchmark lending rates steady,
keeping the discount rate anchored at 6.75 percent and preserving the prime lending rate at 10.25 percent through May 2026.
This policy stance continues to foster private sector borrowing, with total credit extended to the private sector climbing to E23.3 billion by the close of April,
translating to a 0.7 percent month-on-month increase and a notable 9.5 percent growth year-on-year.
The external account faced considerable pressure during the review period, primarily driven by a narrowing trade margin.
While Eswatini successfully maintained a positive trade balance in May 2026, the overall surplus experienced an acute decline,
reaching just E78.4 million for the month, representing a steep drop from the E793.8 million surplus recorded in April.
Simultaneously, gross official reserves contracted by 13.7 percent month-on-month and fell by 6.6 percent compared to the previous year, closing at E8.8 billion by the end of May 2026.
Conversely, the local currency brought some relief to importers as the Lilangeni, which is pegged to the South African Rand, appreciated against major international currencies, averaging E16.50 against the US Dollar throughout May.
Fiscal indicators demonstrate that public sector obligations are expanding, with preliminary data for May 2026 placing total public debt at E41.2 billion,
which is equivalent to 39.5 percent of the country’s total Gross Domestic Product.
Independent financial analysts reviewing the central bank’s statement noted that while the current debt-to-GDP ratio remains within manageable parameters,
the ongoing upward trajectory requires vigilant fiscal management and disciplined budgetary controls.
Meanwhile, liquidity conditions showed mixed results as the broad money supply (M2) settled at E26.7 billion in April 2026,
registering a brief contraction on a month-on-month basis but sustaining a strong 12.8 percent expansion year-on-year, indicating healthy underlying banking sector liquidity.
Ultimately, the mid-2026 data emphasizes an economy navigating transitional adjustments where industrial output and private enterprise credit show steady operational health,
but volatile trade balances and ticking inflation will require careful oversight from the country’s fiscal and monetary authorities.
