Economics & Development

Growth slowed in 2025 but remained broadly robust. Stronger export revenues and external financing helped rebuild foreign reserves, stabilized the Congolese franc, and supported a decline in inflation. However, the intensification of conflict in the East increased security spending and tightened fiscal space. Although growth prospects remain positive, growth has not yet translated into meaningful poverty reduction through the pro-poor use of natural resource revenues.

Zambia’s economy is resilient despite shocks—thanks to ongoing reforms supporting macroeconomic stability, debt sustainability, and fiscal discipline. Real GDP growth is projected to average 4.7 percent in 2026–2028, reflecting expected gains from foreign direct investment in mining, along with reforms to boost private-sector competitiveness in electricity, agriculture, transport, communications, and financial services. However, high poverty, inequality, and low job creation persist.

Economic activity has been severely disrupted by conflict, economic sanctions, and social unrest. The rising cost of the conflict and potential disruption to oil exports could add severe fiscal pressures. Disruptions to imports of essential goods add inflationary pressures and raise food security risks. The outlook is subject to significant downside risks given the high uncertainty surrounding conflict scope and duration.

GDP growth moderated to 1.8 percent in 2025 and is expected to converge to around 2.0 percent over the medium term, supported by domestic demand. Inflation fell to 3.6 percent year-over-year in 2025, within the central bank’s tolerance band, while the fiscal position deteriorated. The labor market and household incomes improved moderately, but sustained productivity and real wage growth remain essential for lasting welfare gains.

The Completion and Learning Review (CLR) evaluates the World Bank Group’s program in Guinea during FY18–FY23, a period marked by significant economic, health, and political shocks, including COVID-19, Ebola, global price pressures, and the 2021 military coup. Originally designed to support Guinea’s transition from a mining-dependent economy toward diversified, private sector–led, job-creating growth, the CPF remained highly relevant despite these disruptions. The 2021 Performance and Learning Review (PLR) adapted the program to the evolving context by strengthening focus on jobs, gender, social cohesion, and climate resilience, while refining the results framework. Despite implementation challenges, including temporary suspension of disbursements and increased fragility, the program demonstrated resilience, maintained policy dialogue, and supported reform progress in key sectors such as energy, governance, and public-private partnerships. Overall progress toward CPF objectives is rated Moderately Satisfactory, and WBG performance is rated Good, reflecting sustained engagement under difficult conditions and generating important lessons on flexibility, selectivity, and alignment with country capacity for future programming.

Growth picked up to 3.6 percent in 2025 largely driven by mining offsetting the structural decline in logging. Global economic headwinds are expected to dampen growth in 2026. Without mining governance and tax reforms, rising infrastructure spending will push public debt above the government's 35 percent of GDP threshold. Remittances offer a poverty-reduction channel, but inflationary pressures risk eroding real gains. Risks are firmly tilted to the downside.

Croatia’s growth in 2025 slowed to a still solid 3.2 percent. It was driven by strong private consumption supported by rising real disposable income, expansionary fiscal policy, and robust European Union (EU) funds inflow. Due to the conflict in the Middle East, growth is expected to moderate, while the anticipated downward trend in inflation will be temporarily reversed in 2026. Fiscal deficit is expected to remain around 3 percent of GDP.

GDP growth slowed to 2.5 percent in 2025, as supply-side constraints in mining mitigated the impulse from rising investment. Inflation eased into the tolerance band, but the fiscal deficit overshot its target. Growth is expected to edge down in 2026, and poverty is projected to continue its steady decline.