Guinea-Bissau: Eleventh Review Under the Extended Credit Facility Arrangement, Requests for Modification of Performance Criteria and Financing Assurances Review

This paper highlights Guinea-Bissau’s Eleventh Review under the Extended Credit Facility Arrangement, Requests for Modification of Performance Criteria and Financing Assurances Review. The political and social situation remains relatively calm. The transitional government is preparing for the next elections scheduled for December 6, 2026. Following a strong performance in 2025, growth is projected to moderate in 2026 on account of high fuel prices, and the economic outlook is facing significant downside risks. The main source of risks is a continued elevated level of fuel prices, which would slow down growth, push up inflation, and result in revenue shortfalls from the likely contraction of fuel imports and shipping disruptions for cashew exports and may require additional spending for minimum operating costs of energy sector entities. At the combined ninth and tenth reviews, the authorities implemented several measures as prior actions, which supported revenue collection and expenditure control during the first quarter of 2026. The authorities are fully committed to meeting all fiscal targets for 2026 and have been implementing additional measures as prior actions for the eleventh review. The authorities have extended until the end-December 2026 the measure to safeguard proceeds of Treasury securities, which has helped improve investor confidence and resulted in lower borrowing costs.