Abidjan, Côte d'Ivoire, May 27, 2025 (Lusa) - The African Development Bank (AfDB) presented a "favourable" economic outlook for Guinea-Bissau on Tuesday, with growth of 5.6% in 2025 and 5.8% in 2026, driven by agriculture but limited by instability and corruption, according to an analysis of the country.

The "expanding" primary and secondary sectors, along with increases in investment and final consumption, are giving a decisive boost to the economy, the financial institution added in the chapter on Guinea-Bissau in its African Economic Outlook (AEO) report for 2025.

Inflation is expected to fall to 2.7% in 2025 and 1.8% in 2026, "due to the stabilisation of international prices".

The country grew by 4.4% in 2023 and 5% in 2024, driven by the agri-food industries, strong cashew production, the installation of fibre optics and the supply of electricity through the regional Gambia River project, according to the AfDB, with inflation falling from 7.2% in 2023 to 3.6% in 2024.

The AEO 2025 was published during the AfDB's annual meetings in Abidjan, Côte d'Ivoire, with the central theme of mobilising the continent's resources to free it from external dependence.

"On the budgetary front, the deficit is expected to gradually decline to 3.6% of GDP in 2025 and 1.6% in 2026, due to tighter budget management. This should reduce the debt-to-GDP ratio to 76.2% in 2025 and 72.8% in 2026," he 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".

On the risk side, the bank fears "political instability ahead of the November elections," along with "uncertainties about the cashew harvest, a possible decline in global demand for raw materials, and tighter financial conditions."

Increased mobilisation of concessional external financing will be essential to preserve macroeconomic stability and strengthen the country's resilience, it said.

"Challenges related to corruption continue to weigh on the business environment," as do aspects linked to "fragile governance, institutional instability and a rule of law facing numerous challenges," the AfDB report concluded.

*** The Lusa news agency travelled at the invitation of the African Development Bank (AfDB) *** LFO/ADB // ADB.

Lusa