Gabon: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Gabon

GABON IMFCountryReportNo.24/144 May2024 2024ARTICLEIVCONSULTATION—PRESSRELEASE;STAFFREPORT;ANDSTATEMENTBYTHEEXECUTIVEDIRECTORFORGABON UnderArticleIVoftheIMF’sArticlesofAgreement,theIMFholdsbilateraldiscussionswithmembers,usuallyeveryyear.Inthecontextofthe2024ArticleIVconsultationwithGabon,thefollowingdocumentshavebeenreleasedandareincludedinthispackage: APressReleasesummarizingtheviewsoftheExecutiveBoardasexpressedduringitsMay24,2024considerationofthestaffreportthatconcludedtheArticleIVconsultationwithGabon. TheStaffReportpreparedbyastaffteamoftheIMFfortheExecutiveBoard’sconsiderationonMay24,2024followingdiscussionsthatendedonFebruary6,2024withtheofficialsofGabononeconomicdevelopmentsandpolicies.Basedoninformationavailableatthetimeofthesediscussions,thestaffreportwascompletedonMay10,2024. AnInformationalAnnexpreparedbytheIMFstaff. AStatementbytheExecutiveDirectorforGabon. Thedocumentlistedbelowhavebeenorwillbeseparatelyreleased.SelectedIssues TheIMF’stransparencypolicyallowsforthedeletionofmarket-sensitiveinformationandprematuredisclosureoftheauthorities’policyintentionsinpublishedstaffreportsandotherdocuments. Copiesofthisreportareavailabletothepublicfrom InternationalMonetaryFundPublicationServicesPOBox92780Washington,D.C.20090Telephone:(202)623-7430Fax:(202)623-7201 E-mail:publications@imf.orgWeb:http://www.imf.orgPrice:$18.00perprintedcopy InternationalMonetaryFundWashington,D.C. ©2024InternationalMonetaryFund PR24/187 IMFExecutiveBoardConcludes2024ArticleIVConsultationwithGabon FORIMMEDIATERELEASE Washington,DC–May28,2024:OnMay24,2024,theExecutiveBoardoftheInternationalMonetaryFund(IMF)concludedtheArticleIVconsultation1withGabon. Gabon’spost-pandemicrecoveryheldupwellinthefaceofrecentshocks.Theeconomyhitasoftpatchin2023,followingaseriesoflogisticsdisruptions,politicaluncertainty,andhighfuelpricesforbusinesses,butitissettoresumeitspotentialgrowthofaround3percentthisyearasshocksdissipate.Inflationhasrecededtobelowthe3percentregionalceilingbytheBEACandshouldremainwithintargetintheabsenceoffurthershocks.Tailwindsfromrobustoilpricesinthelastfewyearshavealsosupportedtheexternalposition. Atthesametime,fiscalimbalanceswidenedsignificantly:largenonoildeficitsin2022–23ledtoarapidaccumulationofarrears,pushedpublicdebttoanestimated70½percentofGDP,abovetheCEMACceiling,andweigheddownonreserveaccumulation. Goingforward,theoutlookwillfacesignificantheadwinds.Theprospectofgraduallydecliningoilwealthisweighingonthelong-termoutlookforgrowthandtheexternalpositiongivenastillmoderatediversificationawayfromoil.Growthisthusprojectedtoslowtoaround2⅔percentoverthelongterm,whichisinsufficienttorevivedecades-longstagnationinincomepercapita,andcurrentaccountsurplusesareexpectedtograduallydwindle.Ifnotaddressed,fiscalimbalanceswillcreatenear-termliquidityrisksandlong-termsustainabilityrisks,whichcoulddestabilizethemacroeconomicoutlook.Theeconomicoutlookwillthushingeonauthorities’abilitytoaddresstheserisks,correctthefiscalpositionandmakeprogressontransparencyanddiversificationreforms. ExecutiveBoardAssessment2 ExecutiveDirectorsagreedwiththethrustofthestaffappraisal.TheywelcomedGabon’sreboundingrowthanddeclineininflationfollowingmultipledomesticshocks.However,theynotedthatthecurrentlyexpansivefiscalpolicystanceandlong-standingstructuralandgovernanceweaknesses,magnifiedbyexternalrisks,posesignificantchallengesfortheeconomy.DirectorsemphasizedthatGabon’seconomicoutlookwilldependontheauthorities’abilitytopivottowardsamoretransparentandinclusivemodelofgovernance,whilecorrectingthefiscalimbalancesanddiversifyingtheeconomytoboostgrowthandaddressthehighlevelsofpoverty. UnderArticleIVoftheIMF'sArticlesofAgreement,theIMFholdsbilateraldiscussionswithmembers,usuallyeveryyear.Astaffteamvisitsthecountry,collectseconomicandfinancialinformation,anddiscusseswithofficialsthecountry'seconomicdevelopmentsandpolicies.Onreturntoheadquarters,thestaffpreparesareport,whichformsthebasisfordiscussionbytheExecutiveBoard. Attheconclusionofthediscussion,theManagingDirector,asChairmanoftheBoard,summarizestheviewsofExecutiveDirectors,andthissummaryistransmittedtothecountry'sauthorities.Anexplanationofanyqualifiersusedinsummingsupcanbefoundhere:http://www.IMF.org/external/np/sec/misc/qualifiers.htm. 2 Directorsemphasizedtheurgencyofdecisivefiscalconsolidationtoensurefiscalsustainability,whilesafeguardingtheabilitytomeetlargesocialanddevelopmentneeds.Theyencouragedimprovingspendingefficiencyandincreasingfiscalspacethroughrevenuemeasures.Theynotedthatensuringasustainablemedium-termfiscalpositionwouldrequiretheadoptionofastrongfiscalframeworktoguidepoliciestowardssustainability.Directorsnotedthatfirmcommitmenttogoodpublicfinancialmanagementpracticeswillbecriticaltostrengthenthefiscalposition.TheycommendedtheconsolidationoftheTreasurySingleAccountandthedigitalizationofgovernmentservicesandencouragedtheauthoritiestoaddressremaininggapsintheframeworksforthegovernanceofpublicenterprises,debtandinvestmentmanagement,andwagebillandcivilservicemanagement.Directorse