The true Gross Domestic Product (GDP) in Equatorial Guinea will grow again in 2021, following tough years of economic recession as a consequence of the fall in the price of oil on international markets, according to the annual report of the African Development Bank (AfDB).
The AfDB report indicates that, although growth will continue to be negative in 2019 (-2.7%) and 2020 (-2.5%), following a fall in oil production and budget adjustments, the Government of Equatorial Guinea can count on additional FDI in the oil sector to reactivate production in the medium term and, in 2021, “growth will once again become positive”.
The AfDB pointed out in its report that, thanks to the efforts of the Equatoguinean Government in the implementation of the CEMAC (Economic and Monetary Community of Central Africa) strategy to combat fiscal and external imbalances due to the fall in the price of oil, the budget balance for Equatorial Guinea is improving, with the deficit falling to 0.5% in 2019 and 0.3% in 2020, while the rate of inflation (projected at 1.4% in 2019 and 1.9% in 2020) should stay under the 3% figure set by CEMAC community regulations.
The report added that the significant reductions in public spending (investment and operation), combined with efforts to generate income promoted by the Government in recent years, helped the budget deficit move to 0.9% in 2018, compared to 2.9% in 2017 and 8.6% in 2016.
The AfDB, in its report, recommended that the Government made an effort in consolidation within the macroeconomic framework; the creation of human capacities, including the formulation and execution of public policy; the transformation of agriculture for the diversification of the economy; and the reactivation of the hydrocarbons sector, in order to take full advantage of the increase in prices in oil markets.
It celebrated the fact that Equatoguinean authorities, in accordance with community efforts from CEMAC countries, are ready to implement additional reforms to promote growth and economic diversification.
The report revealed that in 2019, the Government of Equatorial Guinea will review the National Plan for Economic and Social Development (PNDES) in order to accelerate growth in the non-petroleum sector. The revised plan aims to diversify the economy and improve the business climate.
Source: Equatorial Guinea Press and Information Office