Economic Analysis


Population 12.3 million
GDP 555 US$
Country risk assessment
Business Climate
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major macro economic indicators

  2014 2015  2016 (f) 2017 (f)
GDP growth (%) 1.1 0.1 5.2 4.6
Inflation (yearly average) (%) 9.0 7.3 9.1 8.1
Budget balance (% GDP) -4.1 -8.8 -1.9 -0.9
Current account balance (% GDP) -17.3 -18.7 -13.2 -11.3
Public debt (% GDP) 45.4 53.0 52.6 50.3


(e) Estimate (f) Forecast


  • One third of the world's bauxite reserves
  • Largely untapped deposits of iron, gold, diamonds, uranium and oil
  • Considerable hydroelectric potential


  • Reliance on mining output and energy prices
  • Lack of infrastructure, especially in the electricity sector
  • Difficult business climate

Risk assessment

Private investment in the mining sector and public investment in the primary sector should promote solid growth

Growth should continue to be positive thanks to the return of investors and the resumption of large-scale projects initially planned before the Ebola epidemic. The mining and agriculture sectors look likely to be the main engines of growth. In the mining sector, bauxite production, which is rising strongly, should boost exports because of the quality of the extracted bauxite. The sector is also set to benefit from investment in the framework of the Simandou project, which aims to provide access to one of the world's largest unexploited deposits of high-quality iron, and to build a new railway linking south-eastern Guinea to the coast and a new deepwater port. Nonetheless, investors' risk aversion might hamper or even delay these projects, as they argue that supply is excessive; this attitude is epitomised by Rio Tinto's withdrawal from the Simandou project (its shares were sold to a Chinese industrial company). Public investment should enable growth in the agricultural sector by improving the country's productive capacities and targeting the production of profitable crops, like cashew nuts. Unlike the mining sector, which generates few jobs (foreign companies, such as those from China, tend to bring in their own workers), the growth of the country's agricultural sector should stimulate consumption thanks to a rise in employment and therefore incomes.

Inflation is predicted to fall but remain high because of the effects of the strong depreciation in the price of imports in 2016. Nonetheless, its downward trend should benefit Guineans' purchasing power.


Marked improvement in the public deficit, decline in the current account deficit thanks to mineral exports

The budget deficit is expected to fall in 2017 thanks to an improvement in tax collection, the rise in VAT and tax revenues generated by the mining sector. A rise in capital expenditure may result in a slight rise in spending overall. The debt level should also fall slightly as a result of the fiscal consolidation. Nonetheless, it will be worth monitoring the risk of overindebtedness due to the country's vulnerability to external shocks, especially in raw materials.

The large current account deficit is predicted to shrink slightly in 2017 thanks to good mining results, as with bauxite exports (92% of exports), which should continue to rise, and a moderate growth in imports. Imports look set to rise because of slightly stronger domestic demand and the continuity of projects requiring imports of electronic and electric equipment, intermediate products and oil and gas. The deficit in services will likely remain high because of the high costs, linked to imports, of transport and insurance, and the growing demand for technical services (know-how, technology, R&D, etc.).


An improving political climate

Outgoing president Alpha Condé has the backing of a large parliamentary majority and enjoys relatively broad-based popular support. The make-up of Mr Condé's cabinet, featuring a number of technocrats, underlines the president's belief that a rapid kick-starting of the economy to mark the end of the Ebola crisis will be crucial in preserving social harmony. Concerning domestic political stability, the recent improvements in relations between the regime and opposition parties should herald a more prosperous period. The agreement between these two parties on the date of local elections in 2017 helped calm social relations.

The President is also building closer diplomatic and trading ties with Gulf states and China, emphasised by a series of Chinese and Emirate investments in the mining sector in particular. Lastly, despite efforts made in terms of quality and regulation, the country still suffers from very difficult governance issues and a very strained business climate (Guinea is ranked 163rd out of 190 countries in the 2017 Doing Business survey).


Last update: January 2017

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