The primary and secondary sectors are expanding alongside increases in investment and final consumption, providing a decisive boost to the economy, according to the financial institution in the chapter on Guinea-Bissau in the African Economic Outlook 2025 (AEO).
Inflation is expected to decrease to 2.7% in 2025 and 1.8% in 2026, “due to the stabilization of international prices.”
The country grew 4.4% in 2023 and 5% in 2024, driven by the agri-food industries, strong cashew production, fiber optic installation, and electricity supply through the regional Gambia River project, the African Development Bank (AfDB) indicated, with inflation decreasing from 7.2% in 2023 to 3.6% in 2024.
The AEO 2025 was published today during the annual AfDB meetings in Abidjan, Ivory Coast, focusing on mobilizing the continent’s resources and reducing external dependency.
“On the budgetary side, the deficit is expected to gradually decrease to 3.6% of GDP in 2025 and to 1.6% in 2026, due to tighter budget management. This should reduce the debt-to-GDP ratio to 76.2% in 2025 and to 72.8% in 2026,” it added.
The current account deficit is also expected to improve, reaching 5% of GDP in 2025 and 3.9% in 2026, “driven by a recovery in exports, especially cashew nuts.”
Regarding risks, the bank fears “political instability ahead of the November elections,” along with “uncertainties over the cashew harvest, a potential decline in global commodity demand, and tighter financial conditions.”
The increase in mobilization of external concessional financing “will be essential to preserving macroeconomic stability and strengthening the country’s resilience,” it indicated.
“Challenges related to corruption continue to weigh on the business environment,” as well as issues linked to “fragile governance, institutional instability, and a legal system facing numerous challenges,” concluded the AfDB report.
*** The Lusa agency traveled at the invitation of the African Development Bank (AfDB) ***
