The economy of Guinea-Bissau is expected to grow by 5.1% in 2025, driven by dynamic exports and increased investments, according to forecasts published on Tuesday, July 1 by the International Monetary Fund (IMF). The institution also anticipates moderate inflation, estimated at 2%, reflecting a certain price stability in an uncertain regional context.
The IMF also foresees a gradual improvement in external balances, with a reduction in the current account deficit to 5.8% of GDP, due to more favorable terms of trade. On the budgetary front, the Guinean authorities have committed to reducing the public deficit to 3.4% of GDP by 2025, with the aim of putting debt on a downward trajectory. “The authorities are determined to achieve this goal in order to restore the sustainability of public finances,” the Ministry of Finance said in a statement.
Despite these encouraging prospects, the IMF remains cautious. The institution highlights that the economy remains exposed to significant risks, particularly in a tense socio-political context approaching elections and due to structural capacity constraints. While the direct impact of global trade tensions remains limited, the uncertain domestic climate could weigh on the implementation of reforms.
As part of the eighth review of the program supported by the Extended Credit Facility (ECF), the IMF approved a new disbursement of $6.5 million in favor of Guinea-Bissau. These funds aim to cover urgent financing needs for the balance of payments and the national budget.
The IMF also approved the extension of the ECF program until July 29, 2026, as well as the rescheduling of access to program resources. This extension aims to give the authorities more time to implement the budgetary cleansing policies envisaged in the program.
