An IMF staff team led by Giorgia Albertin visited Conakry from May 15 to 25, 2017, to discuss recent economic and financial developments and Guinea’s economic prospects has concluded that Increasing infrastructure investment will be important to realize the growth potential of the economy.
Economic activity in Guinea is rebounding, with signs pointing toward continued growth over 6 percent.
Fiscal consolidation including increased revenues and reduced government spending have brought the basic budget deficit down to 0.7 percent of GDP in 2016.
IMF sees raising infrastructure spending while maintaining macroeconomic stability will help boost long-term inclusive growth prospects.
The team prepared the ground for a future visit for the negotiation of a new IMF-supported program.
Upon conclusion of the visit, Ms. Albertin said increasing infrastructure investment, while maintaining macroeconomic stability and debt sustainability, will also be important to realize the growth potential of the Guinean economy.
“After the slowdown caused by the Ebola epidemic, economic activity rebounded in 2016, with an estimated real GDP growth of 6.6 percent. This was largely due to accelerated mining production as new projects came online, as well as an increase in agricultural and electricity productions,” she said.
Ms. Albertin states further that, average inflation remained moderate at 8.2 percent in 2016, reflecting a moderate increase in food prices, a stable exchange rate and a prudent monetary policy and that fiscal consolidation efforts have reduced the basic budget deficit in 2016 to 0.7 percent of GDP under the combined effect of increased revenues and reduced spending.
“Imports have risen sharply resulting from new investment projects in the mining sector and have been financed by a large inflow of foreign direct investment. Exports increased, driven by agricultural products, bauxite and gold.
“Growth prospects for the Guinean economy remain favorable. For 2017, growth should continue to be robust at 6.7 percent. We expect continued strong performance in the mining sector, accelerated construction activity in hotels and energy, and good agricultural performance. It will be important to preserve macroeconomic stability, ensure sound growth of banks credit to the private sector and promote higher economic and broad-based inclusive growth,” she said, adding “The IMF team thanks the authorities for their hospitality and for the constructive discussions.”