| Summary: | In 2014, like other CEMAC countries, Equatorial Guinea (EG) was hit hard by the plunge in oil prices. Since then, oil prices have partially recovered, but this has been offset by a rapid trend decline in hydrocarbon output, which peaked in 2008. These factors, along with business environment weaknesses, low private sector confidence, and financing constraints have led to a sharp and prolonged contraction in overall output. With very low government deposits and high domestic arrears, financing constraints are forcing a narrowing of external and fiscal imbalances. At the same time, weak institutional capacity, along with an inadequate public financial management (PFM) framework has reduced the effectiveness of the macroeconomic policy responses
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