Guinea Economic Update

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report highlights the resilience of Guinea's economy, driven by a mining boom, but notes the challenges posed by weak linkages to the domestic economy and Dutch disease dynamics [19][20][38] - Agriculture is identified as a critical sector for structural transformation and climate resilience, with significant potential for inclusive growth [27][28] Summary by Sections Executive Summary - The report presents an overview of Guinea's macroeconomic position and emphasizes the importance of agriculture for sustainable growth [18] Chapter I: Macroeconomic and Poverty Developments and Outlook - GDP growth accelerated to 7.1% in 2023, driven by a 22% increase in bauxite production and a 10% increase in gold production [19][20] - The mining sector's weak integration with the domestic economy limits job creation and poverty reduction [20][41] - Fiscal management has maintained low deficits, averaging 1.4% annually from 2016 to 2023, but tax revenues remain low, averaging 12.7% of GDP [21][22] - The current account deficit averaged 10.6% from 2016 to 2023, primarily due to mining-related exports and FDI-related imports [24] - Growth is expected to slow to 4.9% in 2024 due to external shocks but is projected to accelerate to an average of 6.3% in 2025-2026 [25] Chapter II: The Importance of Agriculture for Structural Transformation and Climate Proofing Guinea's Economy - Agriculture contributes 27.8% to GDP and employs 53% of the population, but productivity remains low due to subsistence farming practices [28][31] - Climate change poses significant risks to agricultural productivity, with potential declines of up to 25% without appropriate measures [30] - The Nationally Determined Contribution (NDC) outlines a budget of US$13.8 billion needed by 2030 to achieve emissions reduction targets [32][33] - Policy options for fostering inclusive agricultural growth include improving public finance management, enhancing infrastructure, and investing in climate-resilient practices [34][36]