The Executive Board of the International Monetary Fund (IMF) has completed the sixth review of Guinea-Bissau’s Extended Credit Facility (ECF) and approved an immediate disbursement of $7.3 million to address the country’s financial needs.
The loan increases IMF’s funding to Guinea-Bissau under the sixth ECF to $33.44 million. Guinea-Bissau will use the funds to promote debt sustainability, enhance governance and create fiscal space for inclusive growth.
“Terms-of-trade shocks and high inflation continue, while the tightening of regional financial conditions have raised borrowing costs. Despite these challenges, the Guinea-Bissau authorities continued to build consensus on critical reforms and maintained political and macroeconomic stability,” stated Mr. Li, IMF’s Deputy Managing Director and Acting Chair.
The IMF projects a 5% growth in Guinea-Bissau’s economy in 2024, with inflation expected to decrease from 7.2% in 2023 to 4.2% in 2024.
IMF recommends that Guinea-Bissau implement measures to mitigate fiscal risks associated with the public utility company, advance the disengagement of the undercapitalized state bank and enhance transparency in public procurement.
