The International Monetary Fund (IMF) on Tuesday raised alarm of Djibouti's continuing public debt and budgetary deficit.
"Expenses relating to public investments have exerted considerable pressure on the budget and external debt," IMF analysts warned in a statement.
The statement said the budgetary deficit of this small nation in the Horn of Africa had reached 16.5 percent of the GDP against 12.2 percent in 2014, while the public debt is likely to hit 80 percent of the GDP in 2017 against 60.5 percent last year.
It also warned the Djiboutian authorities against the rising cases of non-performing loans which were worsening the state of the country's banking sector.
"The reinforcement of banking supervision and adoption of necessary measures to resolve problems of banks facing difficulties should be prioritized," it said.
However, it said the country would record a 6.5 percent growth in 2016, aided mostly by increased investment in infrastructure projects. The growth rate will be similar to what was forecasted for 2015 and slightly higher than the 6 percent for 2014.