Country Reports
2020
November 18, 2020
Burkina Faso: Fourth & Fifth Reviews Under the Extended Credit Facility Arrangement, Request for a Waiver of Nonobservance of Performance Criterion & Rephasing of Access-Press Release; Staff Report; and Statement by the Executive Director for Burkina Faso
Description: The security crisis is worsening and is leading to disruption of basic public services and an unprecedented humanitarian crisis. The Covid19 outbreak and the authority’s response to contain its spread further compounded the situation. Presidential and legislative elections are scheduled for November 2020. Outlook and risks. The economic impacts of the global and domestic measures to contain the spread of the COVID19 pandemic have been stronger than expected. Real GDP contracted by 1.4 percent and 8.6 percent (y-o-y) in the first and second quarters of 2020, respectively. The economic outlook remains uncertain, with growth expected to stand around -2.8 percent in 2020 (down from 6 percent forecast prior to the pandemic). Inflation is expected to pick up and reach 4.1 percent by end-2020. The fiscal deficit in 2020 is expected to widen to about 5.3 percent of GDP, to accommodate an effective response to the Covid19 and security shocks. The main risks to the outlook are the uncertainty surrounding the duration of the pandemic and the security crisis.
November 16, 2020
Republic of South Sudan: Request for Disbursement Under the Rapid Credit Facility-Press Release; Staff Report; Statement by the Executive Director for the Republic of South Sudan
Description: After five years of civil conflict, the warring parties came to a peace agreement in September 2018. Until the COVID-19 crisis broke out, improved political stability and an uptick in international oil prices led to significant progress, with a rebound in economic growth, a decline in inflation, and a stabilization of the exchange rate. The COVID-19 pandemic is severely disrupting South Sudan’s economy, leading to a sharp decline in projected growth (-3.6 percent in FY20/21, about 10 percentage points below the pre-pandemic baseline) and a contraction of oil export proceeds—the main source of exports and fiscal revenue—which has given rise to urgent balance of payments needs and opened a large fiscal financing gap.
November 13, 2020
Islamic Republic of Afghanistan: Request for a 42-Month Arrangement Under the Extended Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for the Islamic Republic of Afghanistan
Description: The COVID-19 pandemic has inflicted a heavy economic and social toll, amplifying the challenges of the armed conflict and fragility. Activity contracted sharply, and new external and fiscal financing needs emerged since the approval of the Rapid Credit Facility disbursement. President Ghani and Mr. Abdullah resolved the contested 2019 presidential election in mid-May, and peace negotiations between the government and Taliban started in September. The authorities are seeking renewed support from the international community for Afghanistan’s development and reforms. Donors remain committed but encourage reform implementation and combatting corruption. Aid is likely to decline in the medium term underscoring the need to advance to self-reliance.
November 13, 2020
Spain: 2020 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Spain
Description: COVID-19 impact. The pandemic has hit Spain’s society and economy severely following five years of strong job-rich growth. A large service sector dominated by SMEs, importance of tourism, and widespread use of temporary employment make the economy particularly vulnerable to the health crisis. It will take several years for the economy to recover, and the outlook is subject to strong downside risks.
November 13, 2020
Spain: Selected Issues
Description: The COVID-19 pandemic will exacerbate Spain’s already large inclusion gap. Responding in the recovery with policies that support social objectives should be a key priority and calls for several structural changes. This paper summarizes some of the main drivers behind the social dispersion, which pre-dates the COVID-19 crisis, and policy options. The focus is on how to address the fragmented labor market, tackle pressures on rental-housing affordability, and lower the gender pay gap.1, 2
November 10, 2020
Philippines: Financial Sector Assessment Program-Detailed Assessment of Observance—Basel Core Principles for Effective Banking Supervision
Description: The BSP’s regulatory framework is broadly effective for the size and complexity of the Philippine banking system, but legislative gaps continue to hinder effective supervision of banks. The BSP has a well-resourced, experienced and highly committed staffing complement, but there is an ongoing need to develop and maintain adequate expertise in certain complex areas (e.g., risk modelling). Since the FSAP in 2002, and the assessment update in 2010, the BSP has made significant progress in enhancing the regulatory framework in a number of areas. But significant weaknesses in the legislative framework, arising notably from the bank secrecy laws and the lack of power for the BSP to supervise the parent companies and their affiliates of banking groups, present a material hindrance to effective supervision.
November 10, 2020
Cabo Verde: Second Review Under the Policy Coordination Instrument and Request for Modification of Targets
Description: The Cabo Verdean economy is facing considerable challenges stemming from the impact of the COVID-19 pandemic. Prior to the health crisis, economic growth was robust, the fiscal and external positions were improving, reserves were at comfortable levels, and public debt was on a downward trajectory. The pandemic is threatening to erode these gains and has generated significant financing needs. The authorities have been implementing policy and healthcare measures to address the fallout of the pandemic and protect vulnerable groups while seeking to safeguard macroeconomic stability.
November 10, 2020
Norway: Financial Sector Assessment Program-Technical Note-Risk Analysis and Stress Testing
Description: Much of the work of the FSAP was conducted prior to the COVID-19 outbreak. The risk and vulnerability analysis integrates the original work with a quantification of the impact of the COVID-19 crisis on bank solvency under two separate scenarios. The original ‘market shock’ scenario explores additional risks that feature less prominently in the COVID scenarios.
November 9, 2020
Cameroon: Request for Disbursement Under the Rapid Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for Cameroon
Description: Since the approval of the first Rapid Credit Facility (RCF-1) request on May 4, 2020 (IMF Country Report No 20/185), weaker external demand in major trading partners (China and Europe) and a more pronounced impact of containment measures to slow the rising number of COVID-19 cases, have further deteriorated growth prospects and worsened Cameroon’s external and fiscal positions. Given limited fiscal buffers and urgent balance of payments needs due to the pandemic, the authorities allowed the current ECF arrangement expire at end-September, reiterated their interest on a successor arrangement, and in the meantime requested financial assistance under the “exogenous shocks window” of the RCF equivalent to 40 percent of quota (SDR 110.4 million). This additional request will bring the total disbursement under the RCF to 100 percent of quota in 2020.
November 4, 2020
Mexico: 2020 Article IV Consultation-Press Release; and Staff Report
Description: Covid-19 has exacted a tragic human, social, and economic toll on Mexico. Over 85,000 lives were lost; unofficial estimates are notably higher. Of 12 million workers that lost their jobs, most of whom came from the informal sector with a limited safety net, over 4 million remain out of the workforce. The working poverty rate jumped to 48 percent. After a historic drop in output, there has been a trade-led bounce in manufacturing. But domestic demand is weak, as is services activity that employs most of the workforce. Staff projects the economy to shrink by 9 percent this year, followed by a gradual recovery. It could take years for employment and incomes to return to pre-crisis levels, compounding the long-standing challenge of achieving strong and inclusive growth.