Gabon Economic Update

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - Gabon's economic recovery is expected to continue, supported by new exploration and growth in mining, wood, and agriculture, despite challenges such as lower oil revenues and increased spending pressures [16] - The forestry sector is emerging as a key driver in Gabon's diversification agenda, contributing significantly to jobs and exports, while also playing a crucial role in climate commitments [19][20] - Gabon's forests absorb approximately 140 million tons of CO2 annually, highlighting their importance in global climate efforts [19] - The government is implementing fiscal reforms to optimize forest resources, aiming to secure higher public revenues and meet environmental goals [22] Summary by Sections Overview - Gabon's economy showed resilience amid political events, with a 3.7% increase in oil output benefiting from high global prices [14] - Inflationary pressures eased, with consumer price inflation falling to 2.2% year-on-year in December 2023, down from a peak of 5.8% [15] - Poverty affected 35.2% of households, with high unemployment and insufficient job creation contributing to economic challenges [15] Recent Economic Trends and Outlook - Global growth declined from 3.0% in 2022 to an estimated 2.6% in 2023, impacting Gabon's economic performance [25] - Gabon's fiscal revenues reached a record high of 22.9% of GDP in 2023, driven by strong oil production and enhanced tax collection [15] - The trade surplus was affected by lower oil prices and weaker performance in wood and manganese exports, with oil constituting 68% of total exports [15] Designing Fiscal Instruments for Sustainable Forestry - The forestry sector accounted for 3.2% of GDP and 6% of exports in 2023, becoming a major source of jobs and economic diversification [20] - Gabon has implemented a log export ban to promote local timber processing, which has transformed the wood sector into a significant economic pillar [20] - Fiscal policies are being reformed to integrate climate-smart instruments, aiming to enhance public revenues while promoting sustainable forestry practices [22][23]