Country Reports
2024
July 11, 2024
Republic of Moldova: Fifth Reviews Under the Extended Credit Facility and Extended Fund Facility Arrangements, First Review Under the Arrangement Under the Resilience and Sustainability Facility, and Request for Modification of a Performance Criterion-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Moldova
Description: This paper highlights Republic of Moldova’s Fifth Reviews under the Extended Credit Facility and Extended Fund Facility Arrangements, First Review under the Arrangement under the Resilience and Sustainability Facility, and Request for Modification of a Performance Criterion. The recovery of the economy from the multiple shocks has been slower than anticipated, with growth lower than expected in 2023 and more subdued in 2024. Inflation has remained within the National Bank of Moldova’s target band since last October. The authorities’ continued focus on contingency planning, while maintaining agile policies, has helped contain the impact of recent shocks. Going forward, ongoing efforts to undertake growth-friendly reforms, strengthen energy security, and promote climate resilient investments, while pursuing the path toward EU accession, will support Moldova’s development objectives. Continued progress on anti-corruption reforms is needed to further increase trust in Moldova’s institutions and foster socio-economic development. Adoption of the law establishing a new Anti-Corruption Court, expected this summer, would be a key welcomed development, and the authorities should operationalize the Court quickly and effectively.
July 11, 2024
Union of the Comoros: Second Review under the Extended Credit Facility Arrangement and Request for a Waiver of Nonobservance of Performance Criterion-Press Release; Staff Report; and Statement by the Executive Director for the Union of Comoros
Description: This paper presents Union of Comoros’ Second Review under the Extended Credit Facility (ECF) Arrangement and Request for a Waiver of Nonobservance of Performance Criterion. Performance under Comoros’s economic reform program continues to be broadly satisfactory, and the authorities remain committed to the economic policies and reforms underpinning the ECF-supported program. Reforms are beginning to bear fruit, with visible signs of macroeconomic stabilization. However, Comoros continues to face the challenges of a small, fragile island state which requires steadfast program implementation and continued support from international partners. Monetary policy has contained inflation and ensured sufficient external buffers for Comoros and the stability of the peg. Continued efforts to stabilize the financial sector, including through the restructuring of the state-owned postal bank, addressing credit quality in the banking system, and strengthening banking supervision and resolution capacities are welcome. Support from international partners continues to be important for addressing the country’s large development needs and climate-related risks.
July 11, 2024
Republic of Uzbekistan: 2024 Article IV Consultation-Press Release; and Staff Report
Description: The 2024 Article IV Consultation discusses that Uzbekistan’s growth momentum continues on the back of far-reaching structural reforms to liberalize its economy, favorable commodity prices, and notable increases in financial and income flows. Growth is expected to remain robust at 5.4 percent in 2024, despite the appropriate withdrawal of fiscal stimulus and slowing trading partner growth. In 2025, growth is projected to pick up to around 5½ percent. Needed increases in administered energy prices would temporarily raise inflation to 11.5 percent by end-2024. The government’s planned fiscal consolidation is appropriate and will help reduce inflation and imports while protecting the vulnerable. Further efforts are needed to broaden the tax base, modernize the tax system, improve the efficiency of public spending, and strengthen public financial management. Monetary policy should remain focused on reducing inflation to the central bank’s target and be tightened if energy price reforms spill over to core inflation and inflation expectations. Structural reforms should focus on reducing the state’s role in the economy, promoting women’s participation in the labor market, advancing decarbonization and climate adaptation initiatives, and enhancing governance and transparency, building on progress already made.
July 11, 2024
Libya: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Libya
Description: The 2024 Article IV Consultation highlights that Libya remains a fragile state trapped in political uncertainty, but the episodes of active conflict have become less frequent. The outlook continues to be dominated by the dynamics of hydrocarbon production. Libya needs to manage public expenditure consistent with its macroeconomic constraints, and requires proper budgeting to avoid procyclical spending, and improve coordination between fiscal and monetary policies. Completing the central bank reunification remains key to maintaining financial stability, along with reforms on strengthening monetary policy and updates to the banking supervision framework. The baseline projection is for declining fiscal and external balances over the coming years, in line with a projected decline in global oil prices. The Central Bank of Libya is expected to maintain the current stock of international reserves, and the country will continue to have no public debt as conventionally understood. However, the balance of risks is tilted to the downside, and uncertainty remains high due to the continuing political stalemate and possible geopolitical spillovers.
July 10, 2024
Republic of Madagascar: Request for an Arrangement Under the Extended Credit Facility and Cancellation of the Current Arrangement Under the Extended Credit Facility and Request for an Arrangement Under the Resilience and Sustainability Facility-Press Release; Staff Report; Staff Supplement; Staff Statement; and Statement by the Executive Director for Republic of Madagascar
Description: This paper presents Republic of Madagascar’s Request for an Arrangement under the Extended Credit Facility (ECF) and Cancellation of the Current Arrangement under the ECF and Request for an Arrangement under the Resilience and Sustainability Facility (RSF). The RSF arrangement will underpin reforms to strengthen adaptation to climate change and resilience against natural disasters, support climate change mitigation efforts, enhance the protection of ecosystems, and create conditions for green private sector investment. Madagascar continues to face challenges, with economic growth easing in a context of weak fiscal performance and gradual reform progress. Going forward, climate change poses significant risks to Madagascar’s economy. The authorities are implementing measures to create fiscal space for much needed social spending and investment. These include medium-term revenue mobilization efforts through tax policy and revenue administration measures. Tackling climate change challenges will be critical for Madagascar’s medium-term macroeconomic resilience. The report suggests that the authorities should take full advantage of the support provided by the IMF and the World Bank through the Enhanced Cooperation Framework for Climate Action, and by other development partners to catalyze private climate financing.
July 8, 2024
Republic of Serbia: Third Review Under the Stand-By Arrangement and Request for Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Republic of Serbia
Description: This paper presents Republic of Serbia’s Third Review under the Stand-By Arrangement (SBA) and Request for Modification of Performance Criteria. With the impact of the energy crisis fading, growth is expected to increase to close to 4 percent in 2024 alongside a robust labor market, real wage increases and higher investment. Macroeconomic outturns under the program remain strong. Growth is increasing, inflation is falling, the current account deficit has narrowed, reserves are at record highs, and public debt is declining. The authorities are firmly committed to their 2024 fiscal plans, which are aligned with the SBA’s fiscal targets, but higher public investment means that deficits over 2025–27 are set to be higher than previously envisaged. Stepped-up public investment will be accompanied by additional transparency and public investment management reforms. The financial situation of the energy sector state-owned enterprises (SOE) has been stabilized. Structural reforms in the energy sector companies, SOE governance, and broader fiscal management are progressing well.
July 8, 2024
United Kingdom: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for United Kingdom
Description: The 2024 Article IV Consultation discusses that the UK economy is approaching a soft landing, following a mild technical recession in 2023. A modest recovery is projected, with 0.7 percent growth in 2024, strengthening to 1.5 percent in 2025. Inflation has fallen rapidly from double digit levels last year in the context of easing energy prices and tight policies. Assuming wage and services inflation continue to moderate from their current elevated levels, inflation should return durably to target in the first half of 2025. The overarching policy objective is to maintain price and financial stability, durably lift per capita growth, and address pressing public spending needs while credibly stabilizing debt. Macroprudential settings are appropriate but continued close monitoring of credit conditions and financial stability risks, including stringent stress tests, is merited in future calibrations. IMF supports a redoubling of policy efforts to credibly achieve the UK green transition targets and maintaining a cautious approach toward industrial policy interventions.
July 8, 2024
United Kingdom: Selected Issues
Description: This Selected Issues paper analyses monetary policy issues in the UK. It examines key macro and financial indicators and assesses the effects of the tightening thus far. The paper finds that monetary transmission has largely mirrored previous episodes, with the most notable exception of the mortgage channel, which has been slower due to a higher share of fixed-rate mortgages. Additionally, it reveals an outsized impact of federal announcements on UK financial markets and argues that this will place a premium on Bank of England (BoE) communications in a context where the BoE may diverge. Monetary transmission in the UK during the current cycle has mostly worked as expected and has been similar to the experiences in other advanced economies. The paper identifies identify monetary policy surprises through changes in high-frequency market indicators within a narrow window around monetary policy announcement. The results indicate that Federal Open Market Committee spillovers do have a sizable effect on monetary transmission in the UK.
July 1, 2024
Jordan: First Review Under the Extended Arrangement Under the Extended Fund Facility and Request for Modification of Performance Criteria-Press Release; and Staff Report
Description: This paper highlights Jordan’s First Review under the Extended Arrangement under the Extended Fund Facility and Request for Modification of Performance Criteria. Jordan’s economy continues to show resilience despite a challenging external environment. The economy continues to grow, albeit at a somewhat slower pace, inflation is low, and reserve buffers are strong. Growth is projected to pick up pace in 2025, contingent upon the Israel-Gaza conflict ending and its impact fading. Uncertainty is high, however, and structural challenges remain, with continued high unemployment. Strong progress was also made in implementing structural benchmarks (SBs), with all six SBs for the first review met, and with good progress being made toward meeting SBs for the next review. The authorities remain firmly committed to sound macro-economic policies and advancing structural reforms, to maintain macro stability, further strengthen economic resilience in the face of successive external shocks, and foster stronger, job-rich growth. Steadfast implementation of structural reforms is crucial to create a more dynamic private sector that can generate sufficient jobs and contribute to higher living standards.
July 1, 2024
Paraguay: Selected Issues
Description: The Selected Issues paper focuses on analyzing trade barriers in Paraguay. This study aims to conduct a more comprehensive analysis of Paraguay's trade performance compared to other Latin American nations and countries outside the region that share similar traits with Paraguay. The analysis highlights the crucial role of comprehensive policies in infrastructure development, governance enhancement, and human capital improvement for promoting trade in all countries, including Paraguay. Reducing trade barriers, overcoming infrastructure shortfalls, and enacting policies to enhance Paraguay's attractiveness for investment are key strategies for fostering trade and economic development. Finally, given Paraguay's levels of export concentration across products, alongside an increasing concentration across markets, and the vulnerability of its primary agricultural exports to droughts, diversification strategies should be intensified, both in terms of products and export markets. Investing in agricultural technology and practices that enhance drought resilience is crucial to safeguard primary exports. Additionally, exploring and developing nonagricultural sectors for export can reduce reliance on volatile agricultural commodities.