Coupled with other factors like falling commodity prices, the coronavirus will have a huge impact on the national economy. According to the government, national economic activity is expected to decline by 0.2% in 2020, after an increase of 3.9% in 2019.
The 2020 financial year promises to be sluggish for the Gabonese economy, according to the economic outlook note on the “Impacts of the covid-19 health crisis on Gabon”. Published by the Ministry of Economy on May 8, the document provides information on the perverse effects of the terrible pandemic on growth, the various sectors and public finances.
The impact of the Covid-19 health crisis on growth will lead to a 0.2% drop in national economic activity in 2020, after an increase of 3.9% in 2019. A decline attributable to both falling commodity prices, contraction in global economic activity and the application of internal measures to combat covid-19.
“This drop could be explained by the poor performance of the oil sector (-4.5% against + 13% in 2019) and the non-oil sector (+ 0.3% against + 2.9% in 2019)” , stressed the Ministry of Economy. Race results: 2020 will be marked by a slowdown in activity in the primary sector (+ 0.4% against + 12.3% in 2019), as well as a decrease in the secondary sectors (-1.9% against + 1.5% in 2019) and tertiary (-0.2% against + 4.1% in 2019).
Regarding the impact of covid-19 on public finances, the situation should deteriorate in 2020 after returning to balance in 2019 (+ 1.1% of GDP). The deficit, could exceed 5% of GDP, a consequence of the decline in the terms of trade and the decline in economic activity in 2020.
“This return to the imbalance of public finances in 2020 would come from the fall of 33% in total revenues compared to the initial objectives of the 2020 finance law. The fall in revenues would be -45.8% in the oil sector and – 26% in non-oil, “said the Ministry of Economy for the sake of transparency. This imbalance should lead to a drop in the country’s revenue of around 700 billion CFA francs in 2020, a drop of 33% compared to 2019.
