IMF Executive Board Concludes 2023 Article IV Consultation with Equatorial Guinea

IMF News, January 16, 2024

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The Executive Board of the International Monetary Fund (IMF) concluded the 2023 Article IV consultation with Equatorial Guinea.
Press Release No. 24/10; January 16, 2024.

2023: Real GDP estimated to have fallen by 8.8 percent.
Inflation: expected to have moderated to 2.5 percent in 2023 from 4.9 percent in 2022.
Current account surplus: estimated to have fallen to 1 percent of GDP in 2023 from 2.4 percent in 2022.
Overall fiscal surplus: estimated to have dropped to 0.3 percent of GDP in 2023 from 13.6 percent in 2022.
Non-hydrocarbon primary fiscal deficit: expected at 23.3 percent of non-hydrocarbon GDP in 2023, up from 22.7 percent of non-hydrocarbon GDP in 2022.
2024 projection: Real GDP growth projected to contract by 5.5 percent.
Medium term (2024–28) outlook: economy would remain on average in recession; current account balance projected to average -7.6 percent of GDP over 2024-28.
Based on authorities’ announced plans, 2024 fiscal projections: fiscal surplus projected to increase to 2.9 percent of GDP; non-hydrocarbon primary deficit projected to improve to 19.5 percent of non-hydrocarbon GDP in 2024.
Key risks: faster-than-projected depletion of oil reserves; waning demand for hydrocarbons amid acceleration of global transition to net zero; delays in implementing key policy reforms.

Hydrocarbon sector and production declines drive outlook; 2022 was a temporary respite followed by a deep recession in 2023.
Exports, imports, terms of trade, and revenue swings reflect hydrocarbon volatility.
Selected numbers from time series and projections (source table highlights):
- Oil price (U.S. dollars a barrel): 2022 = 99.0; 2023 = 82.7; 2024 = 80.1; 2025 = 76.5; 2026 = 73.4; 2027 = 71.1; 2028 = 69.4.
- Nominal GDP (millions of US dollars): 2022 = 11,767; 2023 = 9,917; 2024 = 10,361; 2025 = 10,914; 2026 = 11,013; 2027 = 11,356; 2028 = 11,715.
- Total Hydrocarbon Volume (in millions of barrels of oil equivalent): 2022 = 101.7; 2023 = 81.9; 2024 = 61.7; 2025 = 64.3; 2026 = 53.3; 2027 = 49.1; 2028 = 45.1.
- Current account balance (including official transfers; - = deficit): 2019 = -7.5; 2020 = 2.4; 2021 = -3.8; 2022 = -6.1; 2023 = -8.1; 2024 = -10.6.
- Overall fiscal balance (Commitment basis) and (Cash basis) shown in source table with large swings (examples in series: 2022 overall fiscal balance 11.9; see table for full series).
- Total public debt (percent of GDP): 2019 = 43.2; 2020 = 49.4; 2021 = 42.1; 2022 = 34.6; 2023 = 34.0; 2024 = 33.3; 2025 = 36.0; 2026 = 37.4; 2027 = 38.1.
- Imputed Foreign Reserves (net), US$ billions: 2019 = -0.3; 2020 = 0.8; 2021 = -2.5.

Directors emphasized addressing risks and vulnerabilities in the banking sector to safeguard financial stability.
Recommended actions:
- Complete ongoing efforts to restructure and recapitalize the troubled part of the banking sector.
- Address the high level of non-performing loans.
- Couple bank restructuring with actions to recover assets to limit budgetary cost.
- Continue efforts to settle domestic arrears and produce a comprehensive and transparent plan.

Directors urged bold structural reforms to promote economic diversification and inclusive, sustainable growth.
Reform priorities highlighted:
- Reduce the regulatory burden for business creation.
- Boost investment in human capital.
- Ensure the well‑functioning and efficiency of markets.
Governance and anti‑corruption priorities:
- Urgent need for strong implementation of governance and anti‑corruption reforms.
- Funding of the anti‑corruption commission and adoption of the anti‑corruption law are welcome steps; efforts to fully implement these reforms are encouraged.
- Improve transparency in the hydrocarbon sector.
- Strengthen the effectiveness of the AML/CFT framework.
- Address constraints in economic data generation and provision.

Directors agreed with the thrust of the staff appraisal.
They noted the short‑lived recovery in 2022 and substantial medium‑term risks from projected decline in oil production and challenging business environment.
Directors welcomed the authorities' agreement to anchor fiscal policy on the nonhydrocarbon primary balance and to consolidate public finances.
They commended the authorities for approving a 2024 budget targeting substantial fiscal adjustment while boosting investment in health and education.
Noting authorities’ interest in a financing arrangement with the Fund, Directors underlined the importance of building a track record on reforms alongside strengthening capacity, including through Fund technical assistance.
It is expected that the next Article IV consultation with the Republic of Equatorial Guinea will be held on the standard 12‑month cycle.

Real GDP growth (annual): 2019 = -5.5; 2020 = -4.8; 2021 = -0.4; 2022 = 3.2; 2023 = -8.8; 2024 = 3.7; 2025 = -4.1; 2026 = -0.2; 2027 = -0.8.
Hydrocarbon GDP (growth): 2019 = -3.5; 2020 = -7.3; 2021 = 1.1; 2022 = -21.0; 2023 = -16.9; 2024 = 4.7; 2025 = -16.5; 2026 = -10.5.
Non-hydrocarbon GDP (growth): 2019 = -1.4; 2020 = -6.3; 2021 = 7.7; 2022 = 5.4; 2023 = 3.0; 2024 = 3.1; 2025 = 3.4; 2026 = 3.5.
Consumer prices (annual average): 2019 = -0.1; 2020 = 4.9; 2021 = 5.0; 2022 = 1.8; 2023 = 2.6; 2024 = 2.2; 2025 = 2.0.
Broad money growth: 2019 = 19.6; 2020 = -7.0; 2021 = 20.7; 2022 = -6.6; 2023 = 10.1; 2024 = 4.0.
Non-hydrocarbon primary balance (percent of non-hydro GDP): 2019 = -19.5; 2020 = -16.8; 2021 = -14.6; 2022 = -23.3; 2023 = -19.1; 2024 = -18.6; 2025 = -15.1; 2026 = -15.5; 2027 = -15.9; 2028 = -16.3.

IMF Press Release No. 24/10 — January 16, 2024