Gabon - Future trends

Despite the abundance of natural wealth, the Gabonese economy is hobbled by poor economic management. In 1992, the fiscal deficit widened to 2.4 percent of GDP, and Gabon failed to settle arrears on its debt, leading to a cancellation of rescheduling agreements with official and private creditors. Devaluation of the currency by 50 percent in January 1994 sparked a one-time inflationary surge to 35 percent, but the rate dropped to 6 percent by 1996 and 2.9 percent by 1999. In 1997, an IMF mission to Gabon criticized the government for overspending on off-budget items, over-borrowing from the central bank, and slipping on its schedule for privatization and administrative reform. The IMF is expected to continue to support Gabon as long as progress is made on privatization and fiscal discipline. The rebound of oil prices in 1999 helped growth, but drops in production hampered Gabon from fully realizing potential gains. Gabon's potential for economic growth is based upon its considerable mineral and forestry resources. It is a country with high potential and with support from higher oil prices, reinforced by better economic management, Gabon can be expected to make steady progress.