Djibouti has an expensive cost of living with a CPI of 71.7 (NYC = 100). Groceries (70.6) and restaurant prices (59.1) are also relatively high.

The housing market is very expensive, with a property price to income ratio of 16.57 years. The rent index is 19.0, indicating that renting is relatively more affordable than buying.

The purchasing power index of 122.35 suggests excellent buying power for residents compared to New York City.

Djibouti operates a progressive income tax system with rates ranging from 2% to 30%. The standard Value Added Tax (VAT) is 10%. Tax incentives are available for certain investments.

Djibouti was ranked 112th in the Ease of Doing Business (2019). The government is actively promoting a nascent startup ecosystem through initiatives like the 'Startup Act Djibouti' (2025), offering incentives and a simplified registration process via a one-stop-shop, despite existing bureaucratic hurdles.

Djibouti has a mandatory social security system (CNSS) covering old-age pensions, disability, survivors' benefits, and family allowances. Basic healthcare is provided, but public facilities are limited, and private health insurance is often recommended for expats. Social safety net programs exist to combat poverty and food insecurity.

Djibouti's banking sector is stable and well-regulated by the Central Bank of Djibouti, with a low rate of non-performing loans. The Djiboutian franc is pegged to the U.S. dollar, ensuring currency stability. However, there is no publicly documented national deposit insurance scheme with a specified coverage limit.