IMF Executive Board Concludes 2025 Article IV Consultation and Completes the Eighth Review under the Extended Credit Facility with Guinea-Bissau

IMF News, July 1, 2025

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IMF Executive Board Concludes 2025 Article IV Consultation and Completes the Eighth Review under the Extended Credit Facility with Guinea-Bissau

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Bibliographic details

• Published: July 1, 2025

Arrangement status, disbursements, and program changes

• Three-year Extended Credit Facility (ECF) arrangement approved on January 30, 2023.
• Augmentation of access granted on November 29, 2023: 140 percent of quota or SDR 39.76 million.
• Completion of the eighth review enables immediate disbursement of SDR 4.73 million (about US$ 6.5 million).
• Total disbursement under the arrangement to date: SDR 35.04 million (about US$ 48.1 million).
• Executive Board approved:
  • Waivers for non-observance of quantitative performance criteria based on corrective actions taken by the authorities.
  • Authorities’ request for modification of performance criteria and indicative targets.
  • Financing assurance review completion.
  • Program extension until July 29, 2026, and rephasing of access to provide more time to implement fiscal consolidation policies supported by the ECF program.
• Authorities consented to publication of the Staff Report prepared for this consultation.

Program performance and compliance

• End-December 2024 performance:
  • Quantitative Performance Criteria met: 7 out of 9.
  • Structural Benchmarks met: 3 out of 4.
  • Continuous Structural Benchmarks:
  • Debt service payments: met.
  • Expenditure committee (COTADO): missed.
• In completing the eighth review, prior actions included revenue and expenditure measures adopted as prior actions for the review.

Economic outlook and key projections

• Growth:
  • Projected Real GDP growth: 5.1 percent in 2025.
  • Medium-term growth projected around the potential of 4½-5 percent.
• Inflation:
  • Expected to decelerate and average 2 percent in 2025.
• External sector:
  • Current account deficit expected to narrow to 5.8 percent of GDP in 2025, reflecting better terms of trade.
  • FDI (% GDP): 1.2 (latest available in selected indicators).
  • WAEMU reserves (US$ billions): 25.2 (2022), 26.1 (2023).
  • Exchange rate CFAF/US$ (average): 622.4 (2022), 606.5 (2023), 606.2 (2024).
• Fiscal:
  • Authorities committed to achieving a fiscal deficit of 3.4 percent of GDP in 2025 to put public debt on a firm downward trajectory.
• Risks:
  • Economic outlook positive but subject to significant domestic and external risks.
  • High export dependency on cashew nuts and high risk of debt distress increase vulnerability to adverse international developments.
  • Challenging socio-political climate in an election year and capacity constraints pose downside risks.

Policy priorities and recommendations

• Fiscal consolidation and debt sustainability:
  • Achieve the fiscal consolidation target for 2025 (fiscal deficit of 3.4 percent of GDP).
  • Contain domestic primary spending within the 2025 budget and maintain strict control over the wage bill.
  • Reinforce expenditure controls, ensure project disbursements are thoroughly verified, and keep discretionary spending within agreed allocations.
  • Refrain from nonconcessional borrowing and keep further concessional borrowing within program targets.
  • Strengthen debt management to ensure the debt-to-GDP ratio remains on a downward trajectory.
  • Address fiscal risks from the public utility company, including speeding up its revenue mobilization.
• Revenue mobilization:
  • Boost tax collection to bring it closer to potential through a combination of tax policy measures and revenue administration reforms.
• Financial sector resilience:
  • Support swift capitalization of the undercapitalized bank by its new owners following approval of the purchase offer by the regional Banking Commission.
  • Government decision to divest its stake in the bank to reduce systemic financial sector risks.
• Structural reforms to support inclusive growth:
  • Diversify the economy to reduce dependency on cashew nuts; support growth sectors such as mining and fishing.
  • Strengthen the business environment, remove market distortions, and reduce informality.
  • Strengthen governance, anti-corruption, and AML/CFT standards.
  • Reform procurement transparency and enhance the robustness of the audit function.
  • Boost social protection: implement sustained social protection programs, broaden coverage, mainstream programs within government structures, progressively reduce broad-based subsidies, and move toward more targeted programs.
  • Improve efficiency of education and health spending.

Executive Board assessment and views

• Directors welcomed the resilience of the economy and significant progress in infrastructure development since the last Article IV consultation.
• Directors noted mixed program performance and significant downside risks, but welcomed strong corrective measures implemented as prior actions for the eighth ECF review.
• Supported the authorities’ request for a six-month extension of the ECF to help anchor fiscal targets for 2025 and reinforce fiscal consolidation commitments.
• Emphasized:
  • Critical importance of sustained fiscal consolidation and reinforced debt management.
  • Need to boost revenue mobilization and reinforce expenditure controls and public financial management.
  • Importance of continuing to refrain from nonconcessional borrowing.
  • Need to address fiscal risks from the public utility company.
  • Swift capitalization of the sold undercapitalized bank to strengthen financial sector resilience.
  • Sustained structural reforms to underpin macro stabilization and boost growth, including diversification into fishing, mining, and traditional agriculture.
  • Urgency of strengthening governance, anti-corruption, AML/CFT standards, procurement transparency, and audit functions.
• Directors positively noted authorities’ efforts to address gaps in macroeconomic data provision.
• Next Article IV consultation expected on a 24-month cycle.

Selected economic indicators, 2022-26 (selected lines)

• Population (2024): 2.0 million
• Per capita GDP (2024): US$ 1,104
• Main export product: cashew nuts
• Key export markets: India, Vietnam

• Output: Real GDP growth (%)
  • 2022: 4.6
  • 2023: 5.2
  • 2024 (Prel.): 4.8
  • 2025 (Proj.): 5.1
  • 2026: 5.0

• Prices: Inflation (annual average, %)
  • 2022: 7.9
  • 2023: 7.2
  • 2024 (Prel.): 3.7
  • 2025 (Proj.): 2.0

• Central government finances (% GDP)
  • Revenue and grants:
  • 2022: 15.2
  • 2023: 13.7
  • 2024 (Prel.): 13.1
  • 2025 (Proj.): 16.1
  • 2026: 15.7
  • Expenditure:
  • 2022: 21.3
  • 2023: 21.9
  • 2024 (Prel.): 20.4
  • 2025 (Proj.): 19.5
  • 2026: 19.2
  • Fiscal balance:
  • 2022: -6.1
  • 2023: -8.2
  • 2024 (Prel.): -7.3
  • 2025 (Proj.): -3.4
  • 2026: -3.5
  • Public debt (% GDP):
  • 2022: 80.7
  • 2023: 79.4
  • 2024 (Prel.): 82.2
  • 2025 (Proj.): 78.5
  • 2026: 76.3

• Money and credit
  • Broad money (% change):
  • 2022: 3.5
  • 2023: -1.1
  • 2024 (Prel.): 6.2
  • 2025 (Proj.): 5.6
  • 2026: 5.4
  • Credit to economy (% change):
  • 2022: 23.5
  • 2023: -9.4
  • 2024 (Prel.): -12.2
  • 2025 (Proj.): 14.4
  • 2026: 13.8

• Balance of payments
  • Current account (% GDP):
  • 2022: -8.6
  • 2023: -5.8
  • 2024 (Prel.): -5.0
  • External public debt (% GDP):
  • 2022: 39.0
  • 2023: 35.4
  • 2024 (Prel.): 34.7
  • 2025 (Proj.): 32.0
  • 2026: 30.9

• Exchange rate CFAF/US$ (average)
  • 2022: 622.4
  • 2023: 606.5
  • 2024: 606.2

Source: IMF Executive Board statement and staff report for Guinea-Bissau Article IV consultation and eighth ECF review.

References

• IMF Policy Advice -- A Factsheet
• Special Drawing Rights (SDRs) -- A Factsheet
• Press Releases
• PRESS CENTER
• Extended Credit Facility
• The three-year arrangement
• The Executive Board granted an augmentation of access
• www.imf.org/guinea-bissau
• http://www.IMF.org/external/np/sec/misc/qualifiers.htm
• https://www.imf.org/en/home