Equatorial Guinea Economy Contracts 6.4% in 2025 as IMF Completes Third Staff-Monitored Programme Review
Management of the International Monetary Fund (IMF) has approved the completion of the Third Review of Equatorial Guinea’s non-financing Staff-Monitored Programme (SMP), following a December 16, 2025 decision, signalling continued confidence in the authorities’ reform efforts amid structurally declining hydrocarbon output.
The SMP is aimed at supporting macroeconomic stability and facilitating economic adjustment as oil and gas production continues to fall. Economic activity is estimated to have contracted by 6.4 percent in 2025, reflecting a sharp decline in hydrocarbon production, after the economy recorded marginal positive growth in 2024. The IMF projects a slight contraction in the medium term as the downward trend in hydrocarbon output persists.
Inflationary pressures have eased notably, with inflation declining from a peak of 3.5 percent in March 2023 to 2.6 percent in October 2025, supported by tighter fiscal conditions and subdued domestic demand.
On the fiscal front, the authorities preserved the gains from the significant fiscal adjustment undertaken in 2024 during the first half of 2025. This performance remains consistent with the programme’s objective of achieving a non-hydrocarbon primary balance of negative 17.8 percent of non-hydrocarbon GDP for 2025. However, the fiscal stance is expected to have contributed to a rise in public debt, from 36.4 percent of GDP in 2024 to an estimated 39.2 percent at end-2025.
Equatorial Guinea’s contribution to foreign reserves at the regional central bank remained negative in 2025, extending reserve losses recorded in 2023 and 2024. The authorities have therefore committed to further fiscal adjustment to keep public debt below 50 percent of GDP, restore external balance, and cushion the impact of declining hydrocarbon revenues over the medium term.
The IMF noted that the authorities have implemented substantial reforms under the SMP over the past year. Fiscal policy execution in 2025 aligned with programme commitments and was supported by structural measures aimed at strengthening tax and customs administration. At the same time, the government continued to prioritise social spending, including the elimination of transport fees for students using public school buses.
Progress was also recorded in financial sector reforms, with the authorities securing regional regulatory approval for a domestic arrears clearance plan intended to improve banking sector health.
Programme performance remained broadly strong, with Equatorial Guinea meeting all end-June 2025 quantitative targets and achieving two of the four end-September 2025 structural benchmarks. In addition, the approval of a 2026 budget aligned with programme objectives fulfilled an end-December 2025 structural benchmark.
The IMF indicated that Equatorial Guinea is making progress toward establishing a track record for potential financial assistance under the Upper Credit Tranche. However, it stressed that advancing toward such support will depend on continued implementation of governance reforms, particularly the publication of a hydrocarbon sector transparency report, work on which is already underway.
