Macroeconomic performance
Real GDP growth was estimated at 5.9 times this in 2018. Growth was attributed to the industrial sector (which grew by 8.7%), dominated by mining (15.3%), although manufacturing sector growth was only 3.2%. The primary sector grew by 3.1% and the service sector by 5.1%. Growth was underpinned by reforms aimed at improving the business climate, access to electricity and investment in the agri-food sector.
The budget deficit widened to an estimated 4.4% of GDP in 2018, compared with 2.2% in 2017, mainly due to loans to finance public investment. Public debt rose from 37.4% of GDP in 2017 to 39.0% in 2018, of which 18% was external debt. A debt sustainability analysis published in August 2018 placed the country at moderate risk of debt distress. Restrictive monetary policy has offset the rise in pump prices for petroleum products, keeping inflation under control.

Exports of goods rose by around 9.8% in 2018 compared with 2017. Imports rose by 22.7%. The share of exports to the Economic Community of West African States (0.9% in the first half of 2018) and Europe (1.1%) remained marginal. Around 99% of exports were mining products, 96% of which were destined for Asia in the first half of 2018, compared with 84% in the first half of 2017. The current account balance went from a surplus of 5.5% of GDP in 2017 to an estimated deficit of 4.9% in 2018.

Outlook: positive and negative factors
Real GDP is expected to grow by 6% in 2019 and 2020, supported by expansion in services and the extractive subsector, while the contribution of the manufacturing sector remains weak. On the demand side, the return of private investment, particularly in the mining sector, should increase the contribution of capital expenditure to growth.
The private sector is dominated by the informal sector, which accounts for around 95% of jobs in the economy, mainly in agriculture. Investment was estimated at 36% of GDP in 2018, after a record 75% in 2017; while investment in the mining sector was 58% of GDP, investment in other private branches was 10% and investment in the public sector was 7%.
The National Agricultural Investment and Food Security Plan (2018-2025) aims to reduce the food trade deficit, which reached 686 million USD in 2017. Ongoing reforms include a new land code reducing the time needed to transfer land ownership and the development of 10 agri-food zones throughout the country.
Guinea has exceptional mining potential, including two-thirds of the world's known bauxite reserves, as well as gold, iron and diamonds. Although the mining sector accounts for over 90% of Guinea's exports, it represents only 17% of tax revenues, 12% of GDP and 2.6% of employment. With some twenty large-scale projects planned over the next five years, the mining sector is set for considerable growth. In response, by the end of 2019 Guinea will have a strategy document on the internal links between mining and other strategic sectors of the economy.
In the sub-region, power grids are being built between seven countries, with Guinea as the energy hub. It could export up to 1,493 GWh of electricity by 2022. But Guinea does not yet have paved roads linking it to the three bordering countries - Côte d'Ivoire, Guinea-Bissau and Liberia - and the work in progress will take five years to connect them to Conakry, the capital. Recent legislation on road maintenance and public-private partnerships for infrastructure will help.

Source: African Economic Outlook (AEO) 2019