<\/p>\n
The latest economic update shows that gross domestic product (GDP) expanded by 5.8% in 2025, driven largely by a strong cashew harvest and favourable farmgate prices that boosted rural incomes and consumption. However, the report warns that this growth remains narrowly based and vulnerable to shocks.<\/p>\n
<\/p>\n
World Bank Resident Representative Rosa Brito said the country\u2019s performance highlights both resilience and risk. \u201cGrowth anchored in a single crop is not a foundation for lasting prosperity,\u201d Brito said.<\/p>\n
<\/p>\n
Despite improved macroeconomic indicators, Guinea\u2011Bissau faces mounting fiscal and financial constraints. Inflation dropped sharply to 0.9%, providing short-term relief, while the fiscal deficit narrowed to 6.5% of GDP, largely due to spending cuts.<\/p>\n
<\/p>\n
However, public debt remains elevated at 75.6% of GDP, exceeding regional thresholds. At the same time, the banking sector is under strain, with non-performing loans rising above 22%, limiting access to credit for businesses.<\/p>\n
<\/p>\n
This is particularly affecting small and medium enterprises and women-led firms, which already face structural barriers to growth.<\/p>\n
<\/p>\n
The report highlights a troubling trend in the private sector. While investment has increased, productivity has declined. The share of firms investing in fixed assets rose significantly between 2006 and 2025, yet labour productivity fell into negative territory.<\/p>\n
<\/p>\n
This suggests businesses are hiring more workers without increasing output, resulting in weak job quality, stagnant wages and limited gains in living standards.<\/p>\n
<\/p>\n
World Bank Economist Maria Elkhdari said the issue is not a lack of entrepreneurship, but weak enabling conditions. \u201cThe challenge is creating conditions that allow firms to grow and become more productive,\u201d Elkhdari said.<\/p>\n
<\/p>\n
The World Bank identifies several key areas for reform, including simplifying the tax system, expanding access to finance and improving institutional reliability. Recommendations include scaling up digital tax systems, strengthening credit markets and modernising customs procedures to improve efficiency and predictability.<\/p>\n
<\/p>\n
Growth is projected to slow to 4.8% in 2026, reflecting political uncertainty and weaker investment. Rising global fuel and food prices, linked to geopolitical tensions, are also expected to place additional pressure on the economy.<\/p>\n
<\/p>\n
While poverty is projected to decline gradually, the report warns that inflation shocks could reverse progress if reforms are not implemented. Overall, the World Bank concludes that transforming investment into productivity and inclusive growth will require coordinated policy action and sustained structural reforms.<\/p>\n
<\/p>\n
–WorldBank\/ChannelAfrica–<\/p>\n","protected":false},"featured_media":37994,"template":"","meta":{"_acf_changed":false},"news-type":[44],"class_list":["post-37993","news","type-news","status-publish","has-post-thumbnail","hentry","news-type-finance","entry"],"acf":{"short_description":"Guinea\u2011Bissau\u2019s economy delivered solid growth in 2025, but underlying structural weaknesses continue to threaten long\u2011term development, according to a new World Bank report.","published_date":"","news_description":"Guinea\u2011Bissau\u2019s economy delivered solid growth in 2025, but underlying structural weaknesses continue to threaten long\u2011term development, according to a new World Bank report.","form_embed":"","author":"","image_caption":""},"_links":{"self":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/37993","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/types\/news"}],"version-history":[{"count":1,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/37993\/revisions"}],"predecessor-version":[{"id":37995,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/37993\/revisions\/37995"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media\/37994"}],"wp:attachment":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media?parent=37993"}],"wp:term":[{"taxonomy":"news-type","embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news-type?post=37993"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}