Guinea: Economic Outline

Economic Indicators

Guinea experienced robust economic growth from 2019 to 2023, averaging 5.4% (2.9% per capita), propelled by the mining sector and increased agricultural productivity. This supported low fiscal deficits to GDP, averaging 1.7%. As per the World Bank, in 2023, growth accelerated to 7.1% (4.6% per capita), driven by robust performance in the mining sector. Bauxite production surged by 22%, and gold exports by 10%, attributed to both artisanal operators and new formal sector companies. Growth was fueled by an investment surge, both private and public, on the demand side. Mining will remain the key driver of growth, while non-mining sectors, affected by the fuel depot explosion in mid-December 2023, undergo recovery. Growth is expected to decelerate to around 4.9% in 2024 (2.4% per capita) and then accelerate to an average of 6.3% in 2025–2026 (excluding Simandou mine exports expected by end-2026), albeit below the potential rate of 9.3%. The Simandou mining operation, anticipated to nearly triple Guinea’s GDP in the medium term, presents an opportunity to fundamentally transform the country’s economy.

Concerning public finances, the fiscal deficit widened to 1.6% of GDP in 2023 from 0.9% in 2022, due to a 1.3 percentage point increase in capital expenditure. The fiscal deficit (including grants) is projected to widen to 2.7% of GDP due to increased capital expenditures but is expected to decrease to 2.1% in 2025-2026, in line with prudent fiscal policies. Tax revenues are anticipated to rise slightly in 2024 to 12.7% of GDP, supported by tax administration reforms and additional mining revenues from implementing the bauxite-reference price mechanism starting July 2022. Electricity subsidies are set to decrease by 38% as per the 2024 budget law, driven by utility company reforms, notably the ongoing deployment of prepaid meters and intensified billing recovery efforts. Debt-to-GDP is forecasted to decrease marginally to 35.3% in 2024 and to average 32.0% in 2025-2026, owing to reduced domestic debt (data World Bank). Inflation slowed but remained elevated, at 9.3% in 2023, down from 11.6% in 2022, supported by stable transport costs and prudent fiscal and monetary policies (reserve money increased by only 3% and broad money by 1.5%). However, food price inflation is estimated to have risen from 13.9% in 2022 to 16.2% in 2023. Inflation is expected to slow down to 8.8% in 2024 and to an average of 8.1% in 2025-26. This deceleration is attributed to easing supply constraints and enhancements in road-network conditions, which facilitate food distribution. Additionally, prudent monetary policies, including minimal fiscal financing, contribute to this trend.

Multiple social inequalities are recorded in Guinea, which is classified as a low-income country by the World Bank (with a GDP per capita of only USD 3,188 PPP in 2022). It is estimated that the informal economy accounts for around half of the GDP and 70% of employment. According to figures from the World Bank, the unemployment rate stood at 5.4% in 2023 (from 5.5% one year earlier). Weak linkages between the mining and non-mining sectors, challenges stemming from Dutch-disease dynamics, and recent external shocks such as the COVID-19 pandemic and Russia’s invasion of Ukraine have constrained job creation and poverty reduction efforts. Despite the mining-driven growth, the USD 2.15 international poverty rate averaged 10.6% over the same period, indicating limited impact.

Monetary Indicators	2014	2015	2018	2019	2020
Guinea Franc (GNF) - Average Annual Exchange Rate For 1 GHS	1,890.60	2,017.66	1,965.21	1.73	1,709.37

Source: World Bank - Latest available data.

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Latest Update: May 2024