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Liberia Braces for Tough Times: $22M Budget Deficit, 12.4% Inflation Peak, GST Hikes

  • Writer: Michael T
    Michael T
  • Jul 9
  • 3 min read
President Joseph Boakai
President Joseph Boakai

Monrovia, Liberia – Liberia’s first quarter economic report for 2025 reads disturbing numbers: a $22 million budget deficit, inflation peaking at 12.4% in March, a GST hike to 12% throughout the quarter, and the Liberian dollar tumbling past L$200 to the US dollar. The government’s narrative of “reform and resilience” is being shredded by the hard numbers—and by the daily struggles of ordinary Liberians.


The Liberia Revenue Authority’s (LRA) first quarter report exposes a gaping $22.03 million shortfall—an 11% miss on revenue targets. Despite a modest year-on-year increase, the government’s fiscal position is deteriorating, not improving. The LRA’s data reveal that tax revenue fell 9% below target; non-tax revenue missed by 17%. GST collections dropped 14% short, with compliance gaps especially acute in the informal and digital sectors. Other income taxes collapsed by 49%, a damning indictment of enforcement and policy execution.


Key ministries and agencies—Labor, Police, Fire Service—missed their targets by double digits. Some, like the Forestry Development Authority and Liberia Electricity Corporation, reported zero revenue. As the LRA report notes:

“During the first quarter, the LRA collected a total of US$179.63 million against an approved quarterly projection of US$201.66 million, resulting in an overall revenue shortfall of US$22.03 million, or 11 percent.”

The Central Bank of Liberia (CBL) confirms what every market-goer already knows: inflation rocketed from 8.7% in December 2024 to a peak of 12.4% in March 2025. Core inflation, stripping out food and transport, is even worse at 15.3%—evidence that price pressures are now broad-based and entrenched.


Food inflation is particularly severe, as domestic food prices have soared, with LISGIS reporting increases of up to 20% in January alone. The cost of living is rising sharply—rents, utilities, and transport are all up. Wages are stagnant, and the real value of household income is eroding by the month. The government’s move to raise the Goods and Services Tax to 12% is pouring fuel on the fire, hitting the poorest hardest and squeezing small businesses already on the brink.


The Liberian dollar’s slide from L$188 per US$1 in December 2023 to over L$200 in Q1 2025 is a significant blow to importers, traders, and families. The CBL’s bulletin admits a 7.1% depreciation in just three months, with the end-of-period rate at L$198.40 and the market rate even higher. As the Central Bank states:

“The Liberian dollar depreciated by 7.1% against the U.S. dollar, primarily due to seasonal demand pressures.”This currency weakness is feeding directly into higher import costs and further inflation.

Other first-quarter reports paint an equally grim picture. LISGIS and World Bank household surveys show rising poverty, food insecurity, and a cost-of-living crisis that is outpacing any government intervention. Key growth sectors like mining, agriculture, and services are either flat or contracting, undermining the government’s growth projections. Chronic underperformance, weak enforcement, and a reliance on punitive fines rather than structural reform are fueling public anger and skepticism.


The administration’s failure to enforce compliance, broaden the tax base, and protect the most vulnerable is deepening the crisis. “Liberians are being asked to tighten their belts while government waste and inefficiency go unchecked. The people deserve better.” said an ordinary Liberian from Carey Street.


Unless there is a radical shift toward fiscal discipline, real enforcement, and policies focused on the most vulnerable, the cost-of-living crisis will only deepen. Liberia’s first quarter economic report is a call to action. The government must move beyond rhetoric and deliver real, structural change, or risk losing the confidence of its people and the stability of its economy.  The numbers do not lie—and neither do the empty shelves and rising fares in Monrovia’s markets.





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Additional Sources



Liberia Institute of Statistics and Geo-Information Services (LISGIS) – Inflation and Food Prices[https://lisgis.gov.lr/admin_area/monthlyd/2025030444427LBR_CPI_Newsletter_January_2025.pdf]

Liberian Dollar to US Dollar Exchange Rate[https://coincodex.com/convert/lrd/usd/10/]


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