- GDP (PPP):
- $26.5 billion
- 6.7% growth
- 4.9% 5-year compound annual growth
- $2,041 per capita
- Inflation (CPI):
- FDI Inflow:
Guinea’s economic freedom score is 55.7, making its economy the 120th freest in the 2019 Index. Its overall score has increased by 3.5 points, with a sharp spike in fiscal health and higher scores for government spending and judicial effectiveness far outpacing a decline in monetary freedom. Guinea is ranked 19th among 47 countries in the Sub-Saharan Africa region, and its overall score is now above the regional average but below the world average.
With living costs high and public frustration growing, the government’s efforts to curtail public spending sparked nationwide strikes in 2018 that complicated efforts to establish macroeconomic stability, improve budget management, and enhance economic growth. The lack of a consistent commitment to structural reform in the past has prevented new investment in the mining sector. Corruption and the judicial system’s vulnerability to political interference have weakened the rule of law and the protection of property rights.
In 2010, Alpha Condé won Guinea’s first presidential election since independence from France in 1958, but the election was marred by irregularities and political violence. Condé easily won a second five-year term in 2015 as the opposition boycotted the elections. His Rally of the Guinean People coalition lost its slim parliamentary majority in 2017, but Condé still enjoys relatively wide support. In 2018, about 10 protesters died in riots amid accusations of local election fraud and fear that Condé will amend the constitution to run again. Guinea has huge bauxite reserves and large deposits of iron ore, gold, and diamonds. Despite this great mineral wealth, many Guineans face a dearth of jobs, power cuts, and a lack of drinking water.
As with ownership of business enterprises, both foreign and national individuals have the right to own property. However, enforcement of these rights depends on Guinea’s corrupt and inefficient legal and administrative system. Land sales and business contracts generally lack transparency, and land often has overlapping deeds. There is a pervasive culture of impunity and corruption within public institutions.
The top personal income tax rate is 40 percent, and the top corporate tax rate is 35 percent. Other taxes include value-added and inheritance taxes. The overall tax burden equals 15.3 percent of total domestic income. Over the past three years, government spending has amounted to 18.4 percent of the country’s output (GDP), and budget deficits have averaged 2.5 percent of GDP. Public debt is equivalent to 39.7 percent of GDP.
Private enterprises find it hard to incorporate and operate because of numerous bureaucratic and regulatory hurdles. The government has adopted a measure to make it easier for businesses to resolve insolvency, but the cost of acquiring necessary permits has increased. The labor market is underdeveloped, and the public sector still accounts for most formal employment. The government increased fuel and electricity subsidies in 2018.
The combined value of exports and imports is equal to 146.8 percent of GDP. The average applied tariff rate is 10.9 percent. Nontariff barriers prevent more dynamic trade from taking place. The judicial and regulatory systems may impede foreign investment. Guinea’s underdeveloped financial sector continues to provide a very limited range of services. Many people still rely on informal lending and have no bank accounts.