Gabon : 2015 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Gabon

Context. The recent collapse in oil prices is a major test to Gabon's macroeconomic resilience. It has substantially worsened the growth outlook, government revenue performance, and the external position. The shock highlights the need to accelerate the implementation of Gabon's plan to diversify its economy (Plan Stratégique Gabon Emergent, or PSGE), but also considerably lowers available domestic financing. At the same time, foreign financing has become increasingly costly. The implementation of further policy adjustments will be complicated by the political environment prior to the 2016 elections. As a key member of the CEMAC currency and economic union, Gabon's economic policies have significant regional implications and spillovers. Outlook and Risks. The oil price shock has negatively affected domestic demand and GDP growth in 2015. Some positive momentum is expected in the medium term as non-oil natural resource projects ramp up. The main risk to the outlook remains insufficient fiscal adjustment to weak oil prices that could further deplete fiscal buffers and weaken the external position. Ancillary risks concern a stronger-than-expected spillover of the oil price shock to non-oil economic activity, and persistent fragility at three small distressed state-owned banks.