Guinea-Bissau: Soaring fuel, food prices worries IMF

5 August 2008

Washington, United States, 5 Aug – Rising prices of food and fuel could unbalance Guinea-Bissau’s state finances and even generate situations of social conflict, the International Monetary Fund has warned.

In its latest report on Guinea, released last week, the IMF said inflation and rising living costs for the most vulnerable Guineans could disrupt structural accords and recent “progresses” made by the Bissau authorities to achieve fiscal stability in “difficult circumstances.”

Strongly dependent on food and energy imports, Guinea’s government has suspended import tariffs to ease the impact on urban poor, a measure applauded by the IMF, which warned, however, that the Bissau authorities need a long-term focus on ways to boost national food production.

Loss of government revenues from tax will mean Guinea’s continuing assistance from donor nations is “critical”, added the world financial body, to prevent the country falling into social instability. (macauhub)