Mbabane – Eswatini’s trade deficit widened to E818.5 million in the second quarter of 2026 as imports grew faster than exports, while the Lilangeni weakened against major trading currencies.
This is according to the Quarterly Economic Bulletin for 2026Q2 released by the Ministry of Economic Planning and Development, on October 19,2026.
It bulletin shows that merchandise imports increased by 8.7 per cent during the quarter to E11.476 billion, compared with exports of E10.657 billion, which grew by a slower 6.1 per cent. The figures highlight the pressure on the country’s trade position as the value of goods purchased from abroad continued to exceed earnings from exports.
The trade imbalance unfolded alongside an increase in global oil prices, with Brent crude averaging US$95.3 per barrel, representing a 25.8 per cent rise from the first quarter. The Lilangeni also weakened against major trading currencies, averaging E16.48 to the US dollar, E22.12 to the British pound and E19.16 to the euro.
These developments come as domestic inflation increased to 2.4 per cent in the second quarter, up from 1.9 per cent in the first quarter. The Ministry’s bulletin identifies rising prices in housing and utilities, as well as transport, as the main drivers of the increase, although food inflation moderated.
The bulletin’s findings point to a challenging external economic environment for Eswatini, where higher international oil prices and a weaker exchange rate may add to the cost of imported goods and services. However, the bulletin identifies the trade figures and inflation trends as separate indicators of economic performance rather than attributing the entire trade deficit to currency movements or oil prices.
Despite these pressures, the domestic economy recorded strong growth in the first quarter of 2026, with real gross domestic product (GDP) expanding by 6.1 per cent year-on-year on a seasonally adjusted basis. The Ministry attributed the performance mainly to manufacturing, mining and quarrying, and information and communications technology (ICT).
The secondary sector expanded by 13.9 per cent, indicating strong activity in industries involved in manufacturing and other production-related activities. However, the GDP figures relate to the first quarter, reflecting the one-quarter reporting lag explained in the bulletin.
Private sector credit also increased by 2.7 per cent in the second quarter to E23.765 billion. Credit extended to businesses rose by 2.0 per cent, while household credit increased by 4.4 per cent, suggesting continued demand for borrowing by both businesses and consumers.
The country’s gross official reserves stood at E8.1 billion, equivalent to 1.9 months of import cover. The reserve position remains an important indicator of the country’s capacity to finance imports and support external payments.
On the fiscal front, government revenue increased by 6.7 per cent during the first quarter of the 2026/27 financial year, supported by Pay As You Earn (PAYE), value-added tax (VAT), fuel tax and Southern African Customs Union (SACU) receipts. Total government expenditure declined by 2.5 per cent, although capital spending recorded strong growth.
Regionally, the global economic outlook remained uncertain. The International Monetary Fund’s July 2026 World Economic Outlook revised its global growth forecast for 2026 downwards from 3.3 per cent to 3.0 per cent, citing factors including the Middle East conflict and developments in artificial intelligence. South Africa, Eswatini’s main trading partner, was projected to grow by 1.1 per cent in 2026.
The Ministry said the Quarterly Economic Bulletin provides evidence-based analysis of domestic economic developments alongside global and regional trends, including developments in South Africa.
It examines GDP, inflation, credit extension, official reserves, government revenue and expenditure, merchandise trade and exchange rates to support policymakers, businesses, investors and the public in making informed decisions.
While strong first-quarter economic growth offers a positive sign, the second-quarter trade figures show that exports continued to lag behind imports in growth terms.
The country’s external trade position, exchange-rate movements and rising international commodity prices therefore remain important indicators to watch as Eswatini navigates an uncertain global economy.
Discussion about this post