The International Monetary Fund says the economy of Guinea Bissau is on course to expand by 5.3 percent next year – a slower rate of growth than the 5.9 percent it expects this year.

The fund issued a written statement quoting IMF Deputy Managing Director Tao Zhang as saying:

“The outlook is broadly positive, with the recent consensus-based agreement on a new government offering the prospect of greater political stability.”

But the official added: “At the same time – and posing new challenges – the terms-of-trade gains that supported economic expansion for the past three years have partially reversed.”

Maintaining the progress of reform of tax and customs administration, and ameliorating conditions for private enterprise will be crucial if the economy is to keep improving, the fund says.

The IMF says it has approved the extension of its financial support programme for Guinea Bissau by one year, until July 2019.