Country Reports
2020
December 9, 2020
Guinea- Bissau: Technical Assistance Report-External Sector Statistics Mission
Description: A technical assistance (TA) mission on external sector statistics (ESS) visited Guinea-Bissau during February 3 to 7, 2020. The mission was conducted in Bissau at the request of the National Directorate for Guinea-Bissau of the Central Bank of West African States (BCEAO-DNGB). The mission assisted in improving the quality of ESS. This was the fourth and final mission under the JSA-AFR project for improving ESS in 17 francophone countries of Central and West Africa, financed by the government of Japan and administered by the IMF.
December 2, 2020
Brazil: 2020 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Brazil
Description: The COVID-19 pandemic has worsened Brazil’s longstanding vulnerabilities of low potential growth, high income inequality, and weak fiscal position. While the authorities mounted a rapid and effective response to support the economy and protect the poor and vulnerable, the virus outbreak is yet to be brought under control. Outlook and Risks. Real GDP is projected to contract by 5.8 percent in 2020 followed by a partial recovery to 2.8 percent in 2021. With weak domestic demand, inflation is likely to end 2020 substantially below target. Debt is projected to jump to 100 percent of GDP, due to a 10.6 percentage point deterioration in the primary deficit in 2020, and continue to rise over the next five years. The high level of debt exposes Brazil to confidence shocks. Securing congressional passage of structural reforms to raise potential growth remains challenging.
November 30, 2020
Somalia: First Review Under the Extended Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for Somalia
Description: Soon after reaching the HIPC Decision Point and embarking on a new IMFsupported program aimed at supporting the implementation of the authorities’ National Development Plan and lifting growth, Somalia was hit by a triple shock of flooding, desert locusts, and, importantly, the coronavirus pandemic. Prompt action by the authorities and support from the international community has helped mitigate the impact on peoples’ lives and livelihoods, however, these shocks have had a significant impact on economic activity, exports, and domestic fiscal revenues.
November 30, 2020
Albania: First Post-Program Monitoring-Press Release; Staff Report; and Statement by the Executive Director for Albania
Description: Albania continues to be severely affected by the aftermath of the November 2019 earthquake and the COVID-19 pandemic. The authorities responded promptly to the shocks, and macroeconomic and financial stability have so far been maintained. The economy is expected to contract sharply in 2020, followed by a gradual recovery in 2021-22. The outlook is subject to major uncertainty and rising downside risks as a second wave is gripping many countries in Europe. Albania’s capacity to repay the Fund is adequate, but risks have risen in light of the shocks. Aside from a more severe pandemic, key risks stem from elevated public deficits and debt, weaknesses in public finances, and a relatively high level of non-performing loans (NPLs) and euroization.
November 30, 2020
Greece: Second Post-Program Monitoring Discussions-Press Release; Staff Report; Staff Statement; and Statement by the Executive Director for Greece
Description: The pandemic interrupted a modest recovery. Following Greece’s early and strict containment measures, GDP contracted by 7.9 percent in 2020H1, slightly worse than the Euro Area (EA) unweighted average excluding Luxembourg. A further hit is expected in Q3, the peak of Greece’s tourism season. The fiscal response to the pandemic has been wellorganized and has mitigated its impact, while Single Supervisory Mechanism (SSM) accommodation will delay the expected hit on banks, which were already vulnerable pre- COVID-19. In the context of the 2019 Article IV Consultation (November 2019), staff assessed that Greece’s public debt is sustainable over the medium-term but its long-term public debt sustainability is not assured under a realistic set of macro-fiscal assumptions.
November 23, 2020
Ukraine: Technical Assistance Report—A Follow-Up on Distributed Profit Tax, BEPS Implementation, Voluntary Disclosure Program, and Indirect Methods for Determining Taxable Income
Description: Tax policy in Ukraine is engaged in two fronts at once. On one front, very significant work has been done over the years on the gradual improvement and updating of the tax system; on the other, it questions essential tenets of the existing system, exploring fundamental changes to it. While serious efforts have been devoted, for example, to the modernization of the international aspects of the income tax, upgrading the regime to OECD standards, there is a strong push from some quarters of the policy debate to do away with the Corporate Profit Tax (CPT) altogether. The central idea is to replace it with a Distributed Profit Tax (DPT), generally referred to in Ukraine as the Exit Capital Tax (ECT). In essence, this system would not tax profits as they accrue to the corporation, deferring the tax to when the corporation distributes dividends to the shareholder.
November 20, 2020
Nicaragua: Requests for Purchase under the Rapid Financing Instrument and Disbursement under the Rapid Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for Nicaragua
Description: Nicaragua faces an acute crisis as the COVID-19 shock comes on top of a two- year recession. So far, the speed of transmission of the pandemic in Nicaragua, in terms of officially confirmed cases, has been slower than in neighboring countries, but this may understate the true spread of the disease. The pandemic is expected to produce the third year of consecutive recession and lead to large fiscal and external financing needs given the impact of voluntary distancing and regional and global spillovers. The very limited fiscal space, eroded by the ongoing recession and the limited external financing, constrains the authorities’ ability to self-finance the emergency response.
November 20, 2020
Mexico: Review Under the Flexible Credit Line Arrangement-Press Release and Staff Report
Description: The Covid-19 shock this year has imposed an enormous strain on Mexico. Beside the staggering human cost, the economy faces a historic drop in output and employment and a sharp spike in poverty. It is expected to take many years for employment, income, and poverty to return to pre-pandemic levels.
November 19, 2020
Chile: Technical Assistance Report—Assessment of Tax Expenditures and Corrective Taxes
Description: In response to a request from Mr. Ignacio Briones Rojas, Minister of Finance of Chile, a remote mission was conducted by a joint team of staff from the International Monetary Fund (IMF) and the secretariat of the Organisation for Economic Co-operation and Development (OECD) during April – October 2020. The mission’s main purpose was to assist the Minister of Finance with technical support to review Chile’s tax expenditure methodology and its corrective excise taxes. The present report reflects the findings of the mission. This report was written jointly by the IMF and the OECD, with the IMF team leading the work assessing tax expenditures in the corporate income tax (CIT) and the analysis of excises, and the OECD team leading the work assessing tax expenditures in the personal income tax (PIT) and value added tax (VAT). A presentation of the main findings was given to the Minister of Finance on October 6, 2020. The report incorporates comments provided by the Ministry and the Chilean Revenue Administration.
November 18, 2020
Botswana: Technical Assistance Report-National Accounts Mission
Description: A technical assistance (TA) mission was conducted by IMF’s Regional Technical Assistance Center for Southern Africa (AFS)1 during June 8–12, 2020 to assist Statistics Botswana (SB) in improving the quality of the national accounts statistics. The mission was conducted remotely respecting the constraints imposed by the COVID-19 outbreak. Reliable national accounts are essential for informed economic policymaking by the authorities. It also provides the private sector, foreign investors, rating agencies, donors and the public in general with important inputs in their decision-making, while informing economic analysis and IMF surveillance. Rebasing the national accounts is recommended every five years. Rebasing requires comprehensive surveys and ideally, supply and use tables (SUT) to support coherence checking of data.