Country Reports
2020
September 3, 2020
Seychelles: Interim Performance Update Under the Policy Coordination Instrument-Press Release; and Staff Report
Description: COVID-19 has had a severe economic impact on Seychelles through the implementation of strict domestic measures to contain the spread of the virus and the related global spillovers. The authorities have responded with measures to mitigate the economic fallout on businesses and households. To help address the urgent balance of payments need arising from the pandemic, the Executive Board approved on May 8, 2020 the authorities’ request for emergency financing under the Rapid Financing Instrument (RFI) of SDR 22.9 million, equivalent to 100 percent of quota (IMF Country Report No. 20/170).
September 1, 2020
Brazil: Technical Assistance Report-Strengthening Fiscal Responsibility at the Subnational Level
Description: The fiscal challenges of Brazil’s states and municipalities can have a significant impact on the economy and the provision of core public services. The subnational governments (SNGs) account for a large share of public expenditures, including public investment. As such, their fiscal problems can hamper the economic recovery and the public finances of the federal government. In recent years, many states and municipalities have been struggling with high debt or severe liquidity pressures. Some have already defaulted on part of their debt and are running payment arrears (wages and suppliers). The federal government has already provided a substantial package of financial support through debt service relief.
September 1, 2020
Arab Republic of Egypt: Request for Purchase Under the Rapid Financing Instrument-Press Release; Staff Report; and Statement by the Executive Director for the Arab Republic of Egypt
Description: The COVID-19 pandemic has drastically disrupted people’s lives, livelihoods, and economic conditions. Growth is expected to slow considerably in both 2019/20 and 2020/21 as tourism is at a standstill and domestic activity is expected to significantly slow. The external accounts are expected to deteriorate from portfolio outflows and the shock to tourism and remittances, resulting in an urgent balance of payments need.
August 28, 2020
Cook Islands: Technical Assistance Report–Macroeconomic, Financial, and Structural Policies
Description: A mission was requested by the New Zealand authorities to the Cook Islands to focus on policy options for transitioning to high-income status, financial sector stability and regulatory framework, and debt sustainability.1 It evaluated these issues in the context of the medium-term outlook and against the context of a recently developed fiscal framework. The Cook Islands is a self-governing territory in free association with New Zealand, but it is not an IMF member (Box 1).
August 28, 2020
Republic of Serbia: Fourth Review under the Policy Coordination Instrument-Press Release and Staff Report
Description: Recent economic developments. Notwithstanding a sizeable policy response, the COVID-19 pandemic is having a significant adverse impact on Serbia’s economic activity, with output in 2020 projected to contract by 3 percent, compared to a 4 percent increase expected prior to the COVID-19 shock. The shock is affecting the economy through lower external demand, weaker foreign direct investment and remittances, disruptions in regional and global supply chains, and domestic supply constraints. The government took strong actions to contain the pandemic at an early stage, but the number of infections accelerated again towards end-June. As a result, some containment measures have been re-introduced.
August 27, 2020
Republic of Madagascar: Request for Disbursement under the Rapid Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Madagascar
Description: A further deterioration of the global environment and a deepening of the impact of the COVID-19 pandemic have worsened the macroeconomic outlook significantly, with growth now projected to be negative in 2020. As a result, urgent balance of payments needs arising from the pandemic are now estimated at 4.2 percent of GDP (compared to 1.8 percent), and the authorities have requested an additional disbursement under the Rapid Credit Facility (RCF) of 50 percent of quota (SDR 122.2 million) under the “exogenous shock” window of the RCF. This follows Board approval on April 3, 2020 of the authorities’ request for 50 percent of quota, which took place before the annual access of the RCF was doubled to 100 percent of quota on April 6, 2020. This additional request, if approved, will bring total disbursements under the RCF to 100 percent of quota in 2020. The authorities have also requested temporary debt servicing relief under the G-20 Debt Service Suspension Initiative, supported by the G-20 and Paris Club.
August 13, 2020
Gabon: Request for Purchase Under the Rapid Financing Instrument-Press Release; Staff Report; and Statement by the Executive Director for Gabon
Description: Since the approval of the first RFI request on April 9, 2020 (IMF Country Report No 20/109), weaker external demand and a more pronounced impact of containment measures have further deteriorated growth prospects and worsened external and fiscal positions. The authorities are requesting a purchase under the Rapid Financing Instrument (RFI) of 50 percent of quota (SDR 108 million) to be used as budget support to help address urgent balance of payment (BoP) needs and mitigate the risk of disorderly fiscal or BoP adjustment. This additional request will bring the total purchases under the RFI to 100 percent of quota in 2020.
August 12, 2020
Denmark: Financial Sector Assessment Program-Technical Note-Banking Regulation and Supervision
Description: COVID-19 pandemic: The Financial Sector Assessment Program (FSAP) work was conducted prior to the COVID-19 pandemic, so this Technical Note (TN) does not assess the impact of the crisis or the recent crisis-related policy measures. Nonetheless, given the FSAP’s focus on vulnerabilities and policy frameworks, the findings and recommendations of the TN remain pertinent. The Danish Financial Supervisory Authority (DFSA) has improved standards in its oversight of banking and insurance sectors since the last FSAP. Nevertheless, risks persist, both in traditional forms, and new areas, such as cyber risk, AML, and innovative market entrants. This note, selects topics to meet evolving supervisory challenges and the expectation that the international supervisory standards themselves will likewise continue to rise.
August 12, 2020
Denmark: Financial Sector Assessment Program-Technical Note-Financial Sector Interconnectedness and Contagion Risk Analysis
Description: The FSAP developed a novel multi-layer contagion model to analyze financial system interconnectedness using a new and comprehensive database. This new infrastructure, based on securities data and newly-released confidential credit register data, plays a pivotal role in the development of an advanced contagion model that distinguishes the transmission of shocks between eight different exposure types or layers (loans, deposits, reverse repos, covered bonds, other debt securities, equities, unlisted shares, and other claims). The exercise focuses on the banking system (banks and MCIs), and on interconnections through the covered bond market, as the cornerstones of the overall financial system. However, it also includes exposures vis-a-vis non-bank financial institutions (insurer, pension and investment funds) and non-financial sectors (households, corporates), both domestically and abroad. The simulation exercise consists of a series of idiosyncratic shocks, where the default of each node is triggered iteratively. The model introduces a repricing channel on traded securities to capture cascade effects arising from market reactions to changes in an entity’s solvency condition.
August 12, 2020
Denmark: Financial Sector Assessment Program-Technical Note-Financial Safety Net and Crisis Management Arrangements
Description: Since the 2014 FSAP, Denmark’s financial safety net and crisis management frameworks, including bank resolution, have improved significantly. In response to the FSAP and the transposition of the pertinent European Union (EU) rules, Denmark has enacted major reforms including new legislation for resolution and deposit insurance, introduced a resolution framework for banks and mortgage credit institutions (MCIs), designated two national resolution authorities, established resolution colleges, changed the governance of the deposit insurance system (DIS) and revived cross-border cooperation through the Nordic-Baltic Stability Group (NBSG), including through revising an earlier memorandum of understanding (MOU) and conducting a joint crisis simulation in 2019.