Monrovia, Liberia – The Central Bank of Liberia reports that the country’s public debt stock at the end of June 2025 increased by 1.3 percent to US$2,692.1 million (52.5 percent of GDP) from US$2,656.9 million (51.8 percent of GDP) in the previous quarter.
This increase was mostly caused by a 2.8 percent increase in external debt, which now stands at US$1.62 billion, or 31.7 percent of GDP, up from US$2.66 billion (51.8 percent of GDP) in the previous quarter. The CBL said, while domestic debt somewhat decreased during the period, multilateral borrowing increased, which was the main cause of the expansion.
According to the report, there was no change in the categories of bilateral or other foreign debt throughout the quarter. On an annual basis, the public debt increased by 4.6%, primarily due to an 8.6% increase in external debt, while domestic debt decreased by 0.9%.
In the second quarter of 2025, the government not only increased the debt but also dramatically increased public spending. After spending US$142.6 million (2.8 percent of GDP) the previous quarter, total spending increased to US$215.3 million (4.2 percent of GDP).
Just recurring spending increased to US$202.3 million (4.0 percent of GDP), driven by significant increases in debt service payments, employee remuneration, and goods and services. Employee remuneration increased by 26.4 percent to US$75.6 million, while spending on goods and services more than doubled to US$52 million. Loan, interest, and other fee payments almost doubled to $46.4 million.
According to the CBL’s data, the government’s fiscal burden is increasing as a result of rising external borrowing and ongoing spending. The research emphasizes the necessity of careful debt management, particularly when debt servicing costs rise, even if it did not provide specific policy recommendations.
In light of fluctuating revenue flows and possible external shocks, financial experts warn that if current trends continue, fiscal constraints may worsen and make it more difficult for the government to finance social services and important development initiatives.
The increase in public spending and debt coincides with a shift in focus in Liberia toward more general debates about economic sustainability, transparency, and public financial management.
