{
  "title": "Press Information Notice: IMF Concludes Article IV Consultation with Guinea-Bissau",
  "publication": "IMF News, March 26, 1998",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/pn9820",
  "canonical": "https://www.imf.org/en/news/articles/2015/09/28/04/53/pn9820",
  "overlayPath": "/en/news/articles/2015/09/28/04/53/pn9820/index.md",
  "summary": "Public Information Notices (PINs) form part of the IMF's efforts to promote transparency of the IMF's views and analysis of economic developments and policies.",
  "publishDate": "1998-03-26",
  "sections": [
    {
      "heading": "Background and program history",
      "content": "- Adjustment began with two programs supported by the annual arrangements under the Structural Adjustment Facility (SAF) in 1987-89.\n- A financial stabilization period in 1993-94 led to a three-year arrangement under the Enhanced Structural Adjustment Facility (ESAF), approved in January 1995.\n- Macroeconomic and structural policies in 1995-97 led to substantial improvement: growth was strong, inflation fell, and internal and external imbalances were reduced."
    },
    {
      "heading": "Macroeconomic performance and stabilization (1995–1997)",
      "content": "- GDP growth:\n  - \"GDP growth reached 4.5 percent on average in 1995-96, and is estimated to have risen to 5 percent in 1997.\"\n- Inflation and exchange rate developments:\n  - Mid-1996 market pressures on the Guinea-Bissau peso led to sharp depreciation and higher domestic prices.\n  - Exchange rate stabilized in the last quarter of 1996 after monetary tightening and clarifications on WAMU entry; inflation declined to \"about 1 percent per month in the last quarter of the year.\"\n  - \"Over the whole year, the rate of inflation was 66 percent.\"\n  - \"Inflation fell sharply in 1997 to 16 percent on an end-year basis, with the price level declining in the last four months of the year.\"\n- WAEMU/WAEMU accession:\n  - Guinea-Bissau joined the WAEMU effective \"May 2, 1997\"; currency exchanged at \"PG 65 per CFA franc.\"\n  - Currency conversion carried out in \"May-July 1997.\"\n  - Central Bank of Guinea-Bissau incorporated into the BCEAO after recapitalization with government and donor/creditor assistance.\n- Fiscal consolidation and reforms:\n  - Revenue/GDP ratio rose to \"15.4 percent of GDP in 1997, up from 12.5 percent in 1996.\"\n  - \"Current primary surplus reached 5.5 percent, compared with 3.3 percent in 1997.\"\n  - Comprehensive tax reform adopted in \"October 1997\" introducing a generalized sales tax, streamlined customs tariff, and excise tax reforms (including on petroleum prices); reforms entered into effect in early 1998.\n  - Government began major civil service reform to improve pay incentives and efficiency.\n- Monetary and banking sector:\n  - Expansion of credit was moderate; money supply increase largely due to rise in net foreign assets of the banking system.\n  - Recapitalization of the largest commercial bank noted; Central Bank recapitalization occurred.\n- External sector:\n  - Balance of payments improved in 1997; \"external current account deficit declining to 14.2 percent of GDP, from 20.6 percent,\" as cashew nut exports reached a record level including sale of large unsold 1996 stocks."
    },
    {
      "heading": "Prospects for 1998 (projections)",
      "content": "- Real GDP: \"projected at 5.5 percent in 1998.\"\n- Inflation: \"end-year inflation declining to about 7 percent.\"\n- External current account (excluding official transfers): expected to deteriorate to \"18 percent of GDP\" as exports decline relative to 1997 when boosted by stock sales.\n- Fiscal outlook:\n  - \"Current primary fiscal surplus is projected to attain 5 percent of GDP.\"\n  - Tax revenue expected to be boosted by newly adopted tax reforms.\n  - Domestic contribution to investment will increase to strengthen education and health; current expenditure will be contained."
    },
    {
      "heading": "Executive Board assessment — findings and policy recommendations",
      "content": "- Positive assessments:\n  - Budgetary revenue and primary surplus targets for 1997 were exceeded due to stronger non-tax revenue, vigorous year-end tax collection, and expenditure containment.\n  - Economic growth remained robust; inflation fell sharply following WAEMU/WAEMU entry.\n  - Return to price stability improved the investment climate and facilitated privatization; progress made in other structural reforms.\n- Remaining vulnerabilities:\n  - Economy remains vulnerable to external shocks.\n  - High external debt burden and widespread poverty.\n- Priority recommendations:\n  - Strengthen public finances and deepen structural reforms to consolidate progress and achieve strong, sustainable growth.\n  - Thorough and timely implementation of comprehensive tax reform (including generalized sales tax due on \"April 1, 1998\") and continued improvements in tax and customs administration.\n  - Further strengthen expenditure management, including elimination of domestic arrears.\n  - Implement civil service reform with determination and without delays to improve public services and allow reallocation to social sectors and infrastructure.\n  - Continue and broaden privatization; ensure private management of public services (e.g., post and telecommunications) occurs under competitive conditions to increase efficiency.\n  - Intensify banking system reforms and recapitalization efforts; use restored price stability to broaden the financial system and develop savings and loan institutions for small-scale enterprise financing.\n  - Improve debt management: establish and operationalize national debt monitoring, computerized debt management, and regularize relations with all creditors (Paris Club, non-Paris Club, regional multilateral creditors).\n  - Recognized that Guinea-Bissau's \"very heavy external debt burden\" implies a need for a strong, sustained track record in policy implementation before reaching a decision point under the HIPC debt initiative."
    },
    {
      "heading": "Selected economic indicators (as presented)",
      "content": "- Annual percentage change:\n  - Change in real GDP: 1994: \"3.2\"; 1995: \"4.4\"; 1996: \"4.6\"; 1997: \"5.1\"; 1998 Prog.: \"5.5\"\n  - GDP deflator: 1994: \"23.3\"; 1995: \"44.7\"; 1996: \"49.8\"; 1997: \"39.5\"; 1998: \"10.2\"\n  - Change in consumer prices (end of period): 1994: \"19.3\"; 1995: \"49.7\"; 1996: \"65.6\"; 1997: \"16.8\"; 1998: \"7.0\"\n- Percent of GDP:\n  - Gross domestic investment: 1994: \"21.8\"; 1995: \"22.3\"; 1996: \"23.0\"; 1997: \"19.1\"\n  - Gross domestic savings: 1994: \"3.9\"; 1995: \"-1.2\"; 1996: \"1.8\"; 1997: \"3.3\"; 1998: \"2.5\"\n  - Gross national savings: 1994: \"11.5\"; 1995: \"6.2\"; 1996: \"8.3\"; 1997: \"14.0\"\n- In millions of U.S. dollars (noted unless otherwise):\n  - Export, f.o.b.: 1994: \"20.5\"; 1995: \"23.9\"; 1996: \"21.6\"; 1997: \"53.9\"; 1998: \"42.4\"\n  - Imports, f.o.b.: 1994: \"-53.8\"; 1995: \"-59.3\"; 1996: \"-56.8\"; 1997: \"-67.9\"; 1998: \"-73.7\"\n  - Current account balance, excluding official transfers: 1994: \"-48.6\"; 1995: \"-59.9\"; 1996: \"-55.8\"; 1997: \"-37.7\"; 1998: \"-57.2\"\n  - Capital account balance: 1994: \"-10.2\"; 1995: \"24.1\"; 1996: \"20.0\"; 1997: \"22.5\"\n  - Gross official reserves: 1994: \"18.4\"; 1995: \"20.3\"; 1996: \"11.8\"; 1997: \"31.2\"; 1998: \"...\"\n- Current account balance, excluding official transfers (in percent of GDP): 1994: \"-16.2\"; 1995: \"-23.6\"; 1996: \"-20.6\"; 1997: \"-14.2\"; 1998: \"-18.5\"\n- Change in real effective exchange rate (in percent)3: 1994: \"-11.0\"; 1995: \"-7.6\"; 1996: \"4.8\"; 1997: \"12.4\"\n- External public debt (in percent of GDP): 1994: \"376.5\"; 1995: \"367.1\"; 1996: \"339.1\"; 1997: \"356.4\"\n- Financial variables (in percent of GDP unless noted):\n  - Government revenue: 1994: \"12.7\"; 1995: \"12.5\"; 1996: \"15.4\"; 1997: \"14.7\"\n  - Government expenditure and net lending4: 1994: \"35.5\"; 1995: \"30.4\"; 1996: \"33.6\"; 1997: \"37.5\"; 1998: \"29.3\"\n  - Current primary fiscal balance: 1994: \"4.0\"; 1995: \"5.0\"\n  - Overall government balance5: 1994: \"-4.6\"; 1995: \"-17.7\"; 1996: \"-18.0\"; 1997: \"-12.6\"; 1998: \"-14.6\"\n  - Change in broad money (in percent): 1994: \"33.9\"; 1995: \"25.9\"; 1996: \"33.2\"; 1997: \"53.5\"; 1998: \"15.0\"\n  - Interest rate (in percent)6: 1994: \"26.0\"; 1995: \"39.0\"; 1996: \"54.0\"\n- Notes from the table:\n  - 1IMF staff estimates.\n  - 2Unless otherwise noted.\n  - 3(+)=appreciation.\n  - 4Includes in 1997 the cost of the recapitalization of the Central Bank.\n  - 5Excluding grants and restructuring operations.\n  - 6Central Bank rediscount rate.\n\nPress Information Notice, March 26, 1998 — IMF External Relations Department, Public Affairs, Media Relations.\n\n---\n\n\n References\n\n- Guinea-Bissau and the IMF\n- Public Information Notices\n- Article IV\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/pn9820"
    }
  ],
  "bullets": [
    "[Markdown version](/en/news/articles/2015/09/28/04/53/pn9820/index.md)",
    "[Structured JSON version](/en/news/articles/2015/09/28/04/53/pn9820/index.json)",
    "[Bundle manifest](/en/news/articles/2015/09/28/04/53/pn9820/bundle-manifest.json)",
    "Published: March 26, 1998",
    "Adjustment began with two programs supported by the annual arrangements under the Structural Adjustment Facility (SAF) in 1987-89.",
    "A financial stabilization period in 1993-94 led to a three-year arrangement under the Enhanced Structural Adjustment Facility (ESAF), approved in January 1995.",
    "Macroeconomic and structural policies in 1995-97 led to substantial improvement: growth was strong, inflation fell, and internal and external imbalances were reduced.",
    "GDP growth:",
    "Inflation and exchange rate developments:",
    "WAEMU/WAEMU accession:",
    "Fiscal consolidation and reforms:",
    "Monetary and banking sector:",
    "External sector:",
    "Real GDP: \"projected at 5.5 percent in 1998.\"",
    "Inflation: \"end-year inflation declining to about 7 percent.\"",
    "External current account (excluding official transfers): expected to deteriorate to \"18 percent of GDP\" as exports decline relative to 1997 when boosted by stock sales.",
    "Fiscal outlook:",
    "Positive assessments:",
    "Remaining vulnerabilities:",
    "Priority recommendations:",
    "Annual percentage change:",
    "Percent of GDP:",
    "In millions of U.S. dollars (noted unless otherwise):",
    "Current account balance, excluding official transfers (in percent of GDP): 1994: \"-16.2\"; 1995: \"-23.6\"; 1996: \"-20.6\"; 1997: \"-14.2\"; 1998: \"-18.5\"",
    "Change in real effective exchange rate (in percent)3: 1994: \"-11.0\"; 1995: \"-7.6\"; 1996: \"4.8\"; 1997: \"12.4\"",
    "External public debt (in percent of GDP): 1994: \"376.5\"; 1995: \"367.1\"; 1996: \"339.1\"; 1997: \"356.4\"",
    "Financial variables (in percent of GDP unless noted):",
    "Notes from the table:",
    "[Guinea-Bissau and the IMF](http://www.imf.org/external/country/GNB/index.htm)",
    "[Public Information Notices](https://www.imf.org/en/news/searchnews)",
    "[Article IV](https://www.imf.org/external/pubs/ft/aa/aa04.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
  ],
  "alternates": {
    "markdown": "/en/news/articles/2015/09/28/04/53/pn9820/index.md",
    "json": "/en/news/articles/2015/09/28/04/53/pn9820/index.json",
    "bundleManifest": "/en/news/articles/2015/09/28/04/53/pn9820/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-27T06:15:35.799Z"
}