Party fractures to weigh on Guinea-Bissau's IMF deal

Significance

The Fund suspended support in June after President Jose Mario Vaz's government flouted a key loan condition. Earlier this month, the Guinean and Sierra Leonean presidents brokered a deal aimed at ending the parallel political crisis that has paralysed the government.

Impacts

• Robust global cashew nut prices coupled with a strong harvest will likely boost GDP growth to around 5% this year.
• The West African CFA franc currency, which is pegged to the euro, will mitigate exchange rate volatility and inflation.
• The high poverty rate (around 70%) will generate popular grievance for the foreseeable future.