The agreement for the loan program, which was announced at the end of an IMF mission to Bissau from 15-21 November, must be approved by the Foundation’s board.
“Guinea-Bissau’s economy is gradually recovering from the negative effects of the COVID-19 pandemic, but the fallout from the war in Ukraine is holding back the recovery,” IMF team leader Jose Gijon said in a post-mission press release.
The economy is expected to grow by around 3.5% in 2022, he added.
Average inflation is expected to be above 7% due to rising global oil and food prices.
Under the new program supported by the fund, the authorities will focus on achieving debt sustainability and creating medium-term fiscal space with an emphasis on strengthening financial management and improving public governance.
The total annual budget deficit is expected to be 5% of GDP for this year. The public debt is still over 80% of GDP.