## IMF Executive Board Concludes the 2021 Article IV Consultation with Guinea _IMF News, June 30, 2021_ ## Source details **Canonical URL:** [IMF Executive Board Concludes the 2021 Article IV Consultation with Guinea](https://www.imf.org/en/news/articles/2021/06/30/pr21202-guinea-imf-executive-board-concludes-the-2021article-iv-consultation) ## Other formats - [Markdown version](/en/news/articles/2021/06/30/pr21202-guinea-imf-executive-board-concludes-the-2021article-iv-consultation/index.md) - [Structured JSON version](/en/news/articles/2021/06/30/pr21202-guinea-imf-executive-board-concludes-the-2021article-iv-consultation/index.json) - [Bundle manifest](/en/news/articles/2021/06/30/pr21202-guinea-imf-executive-board-concludes-the-2021article-iv-consultation/bundle-manifest.json) ## Bibliographic details - Published: June 30, 2021 --- ### Economic performance and macro outcomes (2020–2021) - Real GDP growth: 7.1 percent of GDP in 2020. - Sectoral growth: - Mining: 34.6 percent (2020). - Non-mining: 1.3 percent (2020); noted as significantly affected by the Covid-19 pandemic and employing the vast majority of the population. - Inflation: - Surpassed 10 percent at end-2020. - Accelerated to above 12 percent (by June 2021). - GDP deflator: 10.7 (2020); projected 11.3 (2021). - Consumer prices (average): 10.6 (2020); projected 11.6 (2021). - Current account and reserves: - Current account deficit increased to 13.7 percent of GDP (2020). - Reserves reached USD 1.3 bn at end-2020. - Public debt and fiscal outcomes: - Fiscal deficit reached close to 3 percent of GDP (2020). - Public debt increased to 43.4 percent (2020), reflecting the first disbursement for the Souapiti dam project and crisis response spending. - Monetary and credit conditions: - Monetary policy described as accommodative; accommodative regulatory measures helped sustain credit supply. - Net foreign assets: 8.6 (2020). - Net domestic assets: 15.3 (2020). - Reserve money: 19.2 (2020). - Broad money (M2): 23.0 (2020). - Credit to non-government sector: 4.7 (2020). ### Health shocks, social impact, and policy response - Health shocks: - COVID-19 pandemic significantly affected the non-mining economy. - New Ebola outbreak in February 2021 (localized); authorities and WHO declared the end of the Ebola outbreak on June 19, 2021. - Policy responses: - Authorities implemented a crisis response plan to expand health spending and support vulnerable households and the private sector. - Vaccination campaigns for COVID-19 and Ebola started in March 2021. - Donor support contributed to reserve accumulation. ### Outlook and risks (projections and scenario drivers) - Growth projection: Real growth projected at 5.2 percent in 2021, supported by robust mining-sector growth and gradual recovery of the non-mining sector. - Inflation outlook: Likely to remain above the BCRG's single digit target throughout 2021. - Key downside risks: - Potential intensification of the COVID-19 pandemic. - Commodity price shocks. - Reduced availability of donor financing. - Increased geopolitical tensions. - Vulnerability to climate change. - Key upside possibilities: - Faster-than-expected increase in mining activity. - Accelerated implementation of investment activities, particularly the Simandou iron ore project. ### Executive Board assessment and policy recommendations - General view: - Directors commended prompt response to COVID‑19, welcomed resilient growth in 2020, and noted a favorable near‑term outlook subject to downside risks. - Emphasized vaccination implementation and maintaining targeted support for vulnerable households and businesses. - Stressed need to diversify the economy and secure more inclusive, balanced, and sustainable growth. - Fiscal and revenue policy: - Encourage continued efforts to create fiscal space for investment in infrastructure, human capital, and social protection. - Highlighted urgency of domestic revenue mobilization, particularly from the mining sector. - Specific recommendations on mining revenue: - Address profit shifting risks from transfer mispricing. - Fully apply the Mining Code to new contracts. - Minimize tax exemptions. - Adopt the General Tax Code. - Enhance spending efficiency and eliminate energy subsidies. - Continue strengthening public financial management. - Maintain prudent external borrowing policies; maximize recourse to concessional financing and grants to safeguard debt sustainability. - Monetary and exchange rate policy: - Address rising inflation, including by accelerating repayment of central bank advances. - Limit monetary financing of the budget. - Continue modernizing the monetary policy framework, focusing on more active liquidity management and clearer communication of monetary targets. - Exchange rate flexibility recommended to help build reserves and absorb shocks; welcomed transparent rules‑based foreign exchange intervention policy. - Structural reforms and governance: - Encourage diversification efforts: strengthen business climate and financial sector, promote digitalization, and boost human capital development. - Welcome recent improvements in governance; encourage strengthening the anti‑corruption framework, including swift adoption and implementation of the national strategy and the asset declaration regime. ### Selected economic and financial indicators (2019–22) - GDP at constant prices (annual percentage change): 5.6 (2019); 7.1 (2020); 5.2 (2021 proj.); 6.1 (2022 proj.). - Mining (annual percentage change): 9.4 (2019); 34.6 (2020); 7.7 (2021 proj.). - Non-mining (annual percentage change): 4.9 (2019); 1.3 (2020); 4.5 (2021 proj.); 5.8 (2022 proj.). - GDP deflator: 9.9 (2019); 10.7 (2020); 11.3 (2021 proj.); 9.7 (2022 proj.). - GDP at market prices (annual percentage change): 16.2 (2019); 18.6 (2020); 17.0 (2021 proj.); 16.4 (2022 proj.). - Consumer prices (average): 9.5 (2019); 10.6 (2020); 11.6 (2021 proj.). - Exports, f.o.b. (US$ terms, annual percentage change): -0.8 (2019); 126.4 (2020); 0.6 (2021 proj.); -9.8 (2022 proj.). - Imports, f.o.b. (US$ terms, annual percentage change): -21.1 (2019); 76.0 (2020); -4.7 (2021 proj.); -16.4 (2022 proj.). - Net foreign assets (percent of broad money stock): 10.5 (2019); 8.6 (2020); 7.9 (2021 proj.); 10.8 (2022 proj.). - Net domestic assets (percent of broad money stock): 12.4 (2019); 15.3 (2020); 5.1 (2021 proj.); 7.0 (2022 proj.). - Reserve money (annual percentage change): 16.6 (2019); 19.2 (2020); 12.2 (2021 proj.); 13.4 (2022 proj.). - Broad money (M2) (annual percentage change): 22.9 (2019); 23.0 (2020); 13.7 (2021 proj.); 17.8 (2022 proj.). - Central government finances (percent of GDP): - Total revenue and grants: 14.4 (2019); 12.8 (2020); 14.9 (2021 proj.); 14.7 (2022 proj.). - Revenue: 13.9 (2019); 11.8 (2020); 13.2 (2021 proj.); 14.1 (2022 proj.). - Non-mining revenue: 12.0 (2019); 10.2 (2020); 11.5 (2021 proj.). - Grants: 0.5 (2019); 1.0 (2020); 1.7 (2021 proj.). - Total expenditure and net lending: 15.7 (2019); 17.1 (2020); 17.6 (2021 proj.). - Current expenditure: 11.1 (2019). - Interest payments (of current expenditure): 0.7 (2019); 0.9 (2020). - Capital expenditure and net lending: 3.7 (2019). - Overall budget balance including grants: -0.5 (2019); -2.9 (2020); -2.2 (2021 proj.). - Overall budget balance excluding grants: -1.0 (2019); -3.9 (2020); -3.4 (2021 proj.). - Basic fiscal balance: -1.4 (2019); -0.1 (2020). - Current account balance including official transfers (percent of GDP): -10.8 (2019); -13.7 (2020); -9.3 (2021 proj.); -11.6 (2022 proj.). - Exports, goods and services (US$ millions): 4,130.8 (2019); 8,996.0 (2020); 9,012.6 (2021 proj.); 8,134.6 (2022 proj.). - Imports, goods and services (US$ millions): 5,026.9 (2019); 9,938.4 (2020); 8,888.8 (2021 proj.); 7,679.6 (2022 proj.). - Overall balance of payments (US$ millions): 257.8 (2019); -131.0 (2020); 100.7 (2021 proj.); 204.8 (2022 proj.). - Net foreign assets of the central bank (US$ millions): 843.3 (2019); 948.5 (2020); 1,273.9 (2021 proj.); 1,645.1 (2022 proj.). - Gross available reserves (months of imports)²: 2.1 (2019); 2.2 (2020); 2.5 (2021 proj.). - External public debt, incl. IMF (percent of GDP): 19.9 (2019); 25.8 (2020); 28.6 (2021 proj.); 30.9 (2022 proj.). - Total public debt, incl. IMF (percent of GDP): 38.0 (2019); 43.4 (2020); 43.3 (2021 proj.); 42.9 (2022 proj.). - Nominal GDP (GNF billions): 124,109 (2019); 147,188 (2020); 172,280 (2021 proj.); 200,493 (2022 proj.). ### Administrative note - It is expected that the next Article IV consultation with Guinea will be held on the standard 12‑month cycle. *Press Release No. PR21/202, IMF Communications Department, June 30, 2021.* --- ## References - [https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg) - [The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx) - [IMF COVID-19 Hub](https://www.imf.org/en/Topics/imf-and-covid19) - [Policy Tracker](https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19) - [Financial Assistance](https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker) - [Questions & Answers](https://www.imf.org/en/About/FAQ/imf-response-to-covid-19) - [Guinea and the IMF](http://www.imf.org/external/country/GIN/index.htm) - [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2021/06/30/pr21202-guinea-imf-executive-board-concludes-the-2021article-iv-consultation_