Country Reports
2020
May 29, 2020
Jordan: Request for Purchase Under the Rapid Financing Instrument-Press Release; Staff Report; and Statement by the Executive Director, and Advisor for Jordan
Description: This paper discusses Jordan’s Request for Purchase Under the Rapid Financing Instrument (RFI). The coronavirus disease 2019 pandemic has had a severe impact on the Jordanian people’s lives and on the economy. Tourism disruption and sharp declines in remittances, exports and capital inflows have resulted in an urgent balance of payments need. The Jordanian authorities have responded with decisive containment and health measures that effectively limited the spread of the virus with minimal fatalities. They also implemented a timely package of policies to mitigate the economic fallout of the pandemic. IMF financing under the RFI will support international reserves and help meet the budget financing needs for crisis mitigation. Mobilizing additional financing from multilateral and bilateral creditors will be essential to support the authorities’ policy efforts and preserve macroeconomic stability. The authorities remain committed to the objectives of the reform program supported by the Extended Fund Facility arrangement, which was approved by the Board in March. When the crisis abates, the priority will be resuming fiscal consolidation to place public debt on a declining path and pursuing reforms to strengthen the competitiveness of the Jordanian economy and to support inclusive growth and job creation.
May 29, 2020
St. Vincent and the Grenadines: Request for Disbursement Under the Rapid Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for St. Vincent and the Grenadines
Description: This paper highlights St. Vincent and The Grenadines’ Request for Disbursement Under the Rapid Credit Facility (RCF). The coronavirus disease 2019 (COVID-19) pandemic poses a major challenge to St. Vincent and the Grenadines. The tourism sector, a key driver of economic growth in the country, has come to a complete halt with ripple effects across the economy. The authorities have responded to the pandemic by swiftly implementing containment measures and a fiscal package, which includes an increase in funding for the health sector, various public construction projects to generate jobs, financial support to agriculture and fishery sector, and programs to support displaced workers and the most vulnerable. The authorities are committed to meeting the regional debt target of 60 percent of gross domestic product by 2030. Once the crisis has abated, they plan to reprioritize capital spending, contain the growth of the wage bill, enhance taxpayer compliance, and rationalize exemptions from import duties and value added tax on imports. IMF emergency support under the RCF will help fill St. Vincent and the Grenadines’ balance of payments needs. The IMF financing will also help catalyze additional donor support. The authorities are committed to ensuring transparency and good governance in the use of COVID-19-related spending.
May 29, 2020
Peru: Request for Arrangement Under the Flexible Credit Line-Press Release; Staff Report; and Statement by the Executive Director for Peru
Description: This paper highlights Peru’s Request for Arrangement Under the Flexible Credit Line (FCL). Peru qualifies for the FCL by virtue of its very strong fundamentals and institutional policy frameworks and track record of economic performance and policy implementation. The coronavirus disease 2019 shock poses an extraordinary challenge, which is pushing the Peruvian economy into a recession. The authorities have responded decisively by putting in place stringent containment measures and a large policy package to limit the socio-economic fallout, which has been possible thanks to Peru’s ample fiscal space and monetary policy credibility. The package includes a broad set of measures aimed at containing the health emergency, supporting vulnerable businesses and households, and maintaining adequate credit flows to the economy. Nonetheless, and despite its very strong policy buffers, Peru remains vulnerable to external tail risks. A prolonged Covid-19 outbreak would have significant repercussions for trade and financial flows, which could put significant pressure on Peru’s balance of payments and magnify the adverse domestic impact of the coronavirus disease 2019 shock.
May 29, 2020
Bolivia: Request for Purchase Under the Rapid Financing Instrument-Press Release; Staff Report
Description: This paper presents Bolivia’s Request for Purchase Under the Rapid Financing Instrument (RFI). Bolivia has requested a purchase under the RFI to cover the urgent balance of payments need arising from an ongoing shift in its terms of trade, slowdown in capital flows, and sudden increase in health care expenditure needs, precipitated by the coronavirus disease 2019 epidemic. The IMF staff assess that Bolivia meets the eligibility requirements for the RFI. Public debt is sustainable, and Bolivia has adequate capacity to repay the IMF. The epidemic will have a substantial impact on Bolivia’s economy, constraining domestic output, reducing export demand, lowering the price of its principal exports, curtailing external financing flows, squeezing fiscal revenues, and increasing expenditures for public health and social support. In IMF staff’s view, Bolivia’s debt remains sustainable over the medium term and, while the outlook remains highly uncertain, Bolivia maintains an adequate capacity to repay the IMF. The IMF staff therefore recommend Board approval of Bolivia’s request for a purchase under the RFI of 100 percent of quota.
May 29, 2020
Chile: Request for an Arrangement Under the Flexible Credit Line-Press Release; Staff Report; and Staff Supplement
Description: This paper explores Chile’s Request for an Arrangement Under the Flexible Credit Line (FCL). Chile qualifies for the FCL by virtue of its very strong fundamentals, institutional policy frameworks, track record of economic performance and policy implementation and commitment to maintain such policies in the future. Notwithstanding its very strong fundamentals and policy settings, Chile’s open economy is exposed to substantial external risks as a result of the ongoing coronavirus disease 2019 outbreak, including a significant deterioration in global demand for Chilean exports, a sharp decline or reversal of capital inflows toward emerging markets, and an abrupt tightening of global financial conditions. The authorities intend to treat the FCL arrangement as precautionary and temporary, and to exit the arrangement as soon as the 24-month period is completed, conditional on a reduction of risks at the time of the mid-term review.
May 28, 2020
Ecuador: Request for Purchase under the Rapid Financing Instrument and Cancellation of Arrangement under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for Ecuador
Description: This chapter presents Ecuador’s Request for Purchase Under the Rapid Financing Instrument (RFI) and Cancellation of Arrangement Under the Extended Fund Facility (EFF). Ecuador is facing urgent and immediate balance of payment (BOP) needs driven by the sharp propagation of the coronavirus disease 2019 outbreak—Ecuador is one of the hardest hit countries in Latin America—a plummeting of oil prices, and a dramatic collapse of global demand. In the near term, the authorities have taken significant measures to contain the spread of the virus and mitigate the socio-economic impact. Containment measures include the closing of schools and universities, public spaces and noncritical commercial activities, halting public transport, and imposing a nationwide curfew. Additional support from other external partners will be required and critical to close the remaining financing gap and ease budget constraints. The RFI will help Ecuador finance the much-needed health and social assistance spending and catalyze financing from other multilateral financial institutions.
May 22, 2020
Republic of Moldova: Technical Assistance Report-Report on Sectoral Accounts Mission
Description: This Technical Assistance report on the Republic of Moldova constitute technical advice provided by the staff of the IMF to the authorities in response to their request for TA. The mission recommended that the National Bank of Moldova (NBM) play the lead role in the production of financial balance sheet statistics (FABS). Coordination of the activities of the agencies involved in the project is key to its success. In addition, the mission recommended that the NBM create a higher level group to act as a monitoring committee. The role of this group should be to ensure that the work of the interagency group is proceeding satisfactorily and on time, and to resolve any conceptual or practical issues that the technical group cannot agree on. It should meet at least twice a year, however, may need to meet more often in the earlier part of the project. The NBM agreed with the plan, which aims to compile and FABS publish annual and quarterly by March 2022. By March 2020, the NBM will generate sector annual financial balance sheet data for the 2015–2018 period using existing data. The report recommends organizing a seminar for compilers, the objective is to explain the goal of FABS, present the challenge and the methodology.
May 22, 2020
Georgia: Technical Assistance Report-Residential Property Price Indices Mission
Description: This Technical Assistance (TA) report on Georgia is on Residential Property Price Indices (RPPI) Mission. The contents of this report constitute technical advice provided by the IMF staff to the authorities of Georgia in response to their request for TA. The Second Phase of the G-20 Data Gaps Initiative and guidance on Financial Soundness Indicators identify RPPI as a critical ingredient of financial stability policy analysis and macroprudential measures. National Statistics Office of Georgia (Geostat) is aiming at compiling a quarterly RPPI covering new flats and new detached houses for the capital city, Tbilisi. The mission implemented successfully the programs developed in R based on the IMF’s draft for the RPPI Practical Compilation Guide with the available data. The mission provided some guidance on the use of scanner data (SD) on the consumer price index (CPI) compilation. As per request of the Geostat Director, the mission also addressed the use of SD. The introduction of SD should be made on a stepwise approach to avoid huge impacts on the CPI and to make it more manageable, reliable, and safe.
May 22, 2020
Georgia: Technical Assistance Report-Producer Price Indexes Mission
Description: This Technical Assistance Report paper on Georgia highlights various aspects of producer price indexes (PPI) mission. The purpose of the mission was to assist the National Statistics Office of Georgia (Geostat) with expanding the coverage of the PPI to additional services activities. Expanded PPI coverage will facilitate more accurate measurement of real output generated from services activities in Georgia. Since services activities comprised 58.4 percent of 2018 gross domestic product on a value-added basis, improved measurement in this area will significantly enhance the accuracy of total measures of the size, growth, and productivity of the Georgian economy. Improved PPIs will also provide policymakers with a clearer view of price development at the producer level, which may signal future changes in the cost of living for Georgian consumers. Geostat analysis indicated that prices for all carriers have historically changed at similar rates. This makes the consumer price index for air transportation an adequate estimator for producer prices, which should include domestic airlines only. However, PPI prices should ideally include sales to all buyer types, not just resident consumers. This makes unit value prices an attractive option. These can be calculated as total fare revenue generated from all passengers that flew in a specified class of service on all flights for a specified route, divided by this same number of passengers.
May 22, 2020
Republic of Armenia: Second Review Under the Stand-By Arrangement, Requests for Augmentation of Access, Modification of Performance Criteria, and Monetary Policy Consultation Clause-Press Release; Staff Report; Staff Supplement; and Statement by the Alternate Executive Director
Description: This paper discusses Republic of Armenia’s Second Review Under the Stand-By Arrangement, Requests for Augmentation of Access, Modification of Performance Criteria, and Monetary Policy Consultation Clause. Following a strong performance in 2019, the Armenian economy was hit hard by the coronavirus disease 2019 pandemic. The government has proactively responded to the crisis, adopting widespread containment measures while supporting vulnerable individuals and firms in the most affected sectors. The fiscal deficit is projected to widen considerably in 2020, reflecting the impact of the cycle on revenues and higher current spending for healthcare and economic support to vulnerable households and firms. The authorities are committed to pursuing their medium-term goal of debt sustainability once the crisis abates, and public debt is expected to decline over the medium-term in line with Armenia’s fiscal rule, while maintaining space for investment and social spending. The augmentation of access under the Stand-by Arrangement will provide much needed support, allowing the authorities to mitigate the pandemic and support affected households and businesses.