Guinea-Bissau: Economic Outline
For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
Guinea Bissau’s economic performance remains highly dependent on the prices of cashew nuts, which account for almost 70% of employment and three-quarters of exports (the so-called “green oil” of Guinea Bissau). Prices for raw cashews, which were already under pressure from excess supply in the last few years, tumbled as a consequence of the Covid-19-induced crisis, which slowed processing activities and caused a contraction in demand. As a result, GDP growth slowed down to 1.5% in 2020, rebounding to 5% in 2021. The IMF estimated a slowed-down growth of 3.5% in 2022 due to lower cashew exports, which were hampered by logistical constraints. The increase in agricultural production, private sector investment, and relative political stability have provided support for growth, countering the effects of the higher cost of living and adverse external shocks to some extent. Growth is expected to recover to 4.5% in 2023 and around 5% the following year.
Concerning public finances, the 2022 overall fiscal deficit stood at 5.8% of GDP and public debt remained high at about 82% of GDP, up from 78.5% one year earlier. Fiscal consolidation is expected to continue, and the debt-to-GDP ratio is should follow a downward trend over the forecast horizon (80.3% in 2023 and 77.7% in 2024, IMF). By the end of January 2023, the Executive Board of the International Monetary Fund (IMF) approved a thirty-six-month Extended Credit Facility arrangement for Guinea-Bissau in the amount of about USD 38.4 million, enabling an immediate disbursement of USD 3.2 million. According to the IMF, raising domestic revenue, containing current expenditures and limiting budget transfers will be key to ensuring fiscal sustainability and allowing the program to remain on track going forward. Inflation increased from an estimated 3.3% in 2021 to 5.5% in 2022 due in part to the surge in commodity prices associated with the war in Ukraine and is expected to gradually decrease to around 4% this year and 3% in 2024 (IMF).
The World Bank classifies Guinea Bissau as a low-income country (the GDP per capita PPP was estimated at USD 2,851 in 2022 by the IMF, among the lowest in the world). About 69% of the population lives in poverty and 25% suffer from chronic malnutrition (UN). Data from the World Bank show that the unemployment rate in the country was around 3.7% in 2021. However, the dimensions of the informal economy, as well as trafficking in narcotics are hard to assess, but they play an important role in the country's economic activities. In fact, the country struggles with South American drug traffickers, who are sometimes linked to the army.
| Main Indicators | 2022 | 2023 (E) | 2024 (E) | 2025 (E) | 2026 (E) |
|---|---|---|---|---|---|
| GDP (billions USD) | 1.72 | 1.99 | 2.18 | 2.37 | 2.56 |
| GDP (Constant Prices, Annual % Change) | 4.2 | 4.5 | 5.0 | 5.0 | 5.0 |
| GDP per Capita (USD) | 906 | 1,028 | 1,103 | 1,171 | 1,242 |
| General Government Gross Debt (in % of GDP) | 80.3 | 73.9 | 71.4 | 69.0 | 66.9 |
| Inflation Rate (%) | n/a | 7.0 | 3.0 | 2.0 | 2.0 |
| Current Account (billions USD) | -0.16 | -0.14 | -0.10 | -0.10 | -0.11 |
| Current Account (in % of GDP) | -9.6 | -7.1 | -4.5 | -4.3 | -4.1 |
Source: IMF – World Economic Outlook Database - October 2021.
Note: (e) Estimated Data
| Monetary Indicators | 2016 | 2017 | 2018 | 2019 | 2020 |
|---|---|---|---|---|---|
| CFA Franc BCEAO (XOF) - Average Annual Exchange Rate For 1 GBP | 800.68 | 749.15 | 741.42 | 731.88 | 737.93 |
Source: World Bank - Latest available data.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
|---|---|---|---|
| Employment By Sector (in % of Total Employment) | 50.3 | 10.5 | 39.2 |
| Value Added (in % of GDP) | 30.9 | 13.5 | 50.2 |
| Value Added (Annual % Change) | -0.8 | -0.7 | -4.3 |
Source: World Bank - Latest available data.
| 2018 | 2019 | 2020 | |
|---|---|---|---|
| Labour Force | 779,105 | 800,827 | 792,581 |
Source: International Labour Organization, ILOSTAT database
| 2017 | 2018 | 2019 | |
|---|---|---|---|
| Total activity rate | 72.87% | 72.90% | 72.89% |
| Men activity rate | 79.17% | 79.11% | 78.98% |
| Women activity rate | 67.01% | 67.11% | 67.19% |
Source: International Labour Organization, ILOSTAT database
The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
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Latest Update: December 2023
