Country Reports
2019
June 4, 2019
South Sudan: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of South Sudan
Description: This 2019 Article IV Consultation discusses that while the peace agreement signed in September 2018 has improved the prospects for lasting peace in South Sudan, the implementation of the agreement has become more protracted than envisaged with the recently announced six-month delay in forming a new national unity government. A relapse into war in mid-2016 spread insecurity across the country and severely affected all economic activities and exacerbated the humanitarian crisis and food insecurity. The country is in a serious economic crisis. The discussions focused on the urgent need to restore macroeconomic stability and rebuild economic buffers. Addressing the macroeconomic imbalance, supported by improvements in oil management and public financial management, is an important factor to rebuild confidence in government policies. This will be necessary to regain access to external financial support from development partners. One of the key policy recommendations is to strengthen oil management and transparency by an immediate stop of contracting new oil-backed advances.
June 3, 2019
Republic of Estonia: Technical Assistance Report-Public Investment Management Assessment
Description: This Technical Assistance Report on the Republic of Estonia highlights that public investment is a priority spending area, and Estonia is seeking to strengthen the efficiency and effectiveness of its capital expenditure from an already high level. Estonia’s public investment is relatively efficient, while further improvements should pay attention to the quality of public services enabled by them. Investment implementation is particularly strong. This reflects Estonia’s open procurement framework that utilizes an advanced e-procurement system, its modern treasury that employs an effective Treasury Single Account system to guarantee cash availability, asset monitoring that has been made routine through full accrual accounting for the whole public sector, and active project management by ministries. Some practices that are already effectively implemented should be formalized in the institutional design which will act as a safeguard. Public investment projects should be managed in an integrated portfolio at all stages of the investment cycle. It is difficult to obtain a picture of all-important investment projects pursued in the public sector including by local governments and state-owned enterprises. A comprehensive portfolio view of all projects supports transparent prioritization across sectors and the identification of systemic patterns or risks.
June 3, 2019
Cyprus: Third Post-Program Monitoring Discussions-Press Release and Staff Report
Description: This paper presents the Third Post-Program Monitoring discussions with Cyprus. Cyprus’s rapid recovery is expected to slow gradually; however, the outlook remains favorable. Economic growth is gradually decelerating but remains strong, buoyed by the services and construction sectors, partly financed with foreign direct investment. While employment is picking up, wage pressures and inflation remain low. A large fiscal surplus is helping to lower public debt after a sizable one-off increase related to the sale of Cyprus Cooperative Bank in the year 2018. Repayment capacity appears to be adequate under the baseline scenario given the expected decline of gross public debt, a stable debt servicing profile, and continued favorable market conditions. Policies should aim to continue strengthening bank balance sheets while avoiding the commitment of public resources. The Estia scheme, aimed at encouraging non-performing borrowers to start servicing their loans, should not be allowed to lead to further risks of moral hazard. The subsidy support, mandated write-offs by banks and enhanced foreclosure threats on re-defaulting restructured loans are expected to strengthen incentives to service restructured loans.
June 3, 2019
Republic of Poland: Financial Sector Assessment Program-Technical Note-Cooperative Banks and Credit Unions
Description: This Technical Note on Cooperative Banks and Credit Unions for the Republic of Poland reviews the cooperative bank and credit union sectors. It focuses on: the situation of the two sectors that are both in states of transition; the regulatory and supervisory arrangements; and the safety net and resolution regime within the context of the crisis management framework. In addition, key perspectives are provided as to the sustainability of institutional models and the sectors within a modernizing and competitive banking sector. Most cooperative banks and credit unions are found to be stable; however, each sector has its own issues. The Financial Sector Assessment Program is broadly supportive of the policy direction for cooperatives, while it questions whether the credit union sector should remain standalone. The two existing Institutional Protection Schemes and their affiliating banks need to be strengthened to ensure sustainability. Policymakers are thus advised to decide whether a standalone credit union sector remains appropriate and, if not, define a strategy to transition viable credit unions to become or consolidate with banks.
June 3, 2019
Qatar: Selected Issues
Description: This Selected Issues paper focuses on policies to drive diversification for Qatar. Diversification is important for a large commodity exporter like Qatar: it helps manage temporary shocks and prepare for sweeping changes to the economic setting. Qatar’s large financial holdings can help diversify revenues. Both structural reforms to improve the business environment and sector-specific policies can support diversification of activity and exports. Sector-specific policies should build on existing economic strengths in areas with room for exports and innovation. Emphasis should be placed on developing expertise in specific clusters. Export markets and competition provide crucial mechanisms to ensure discipline. Further diversification is important to help Qatar manage temporary shocks and prepare for far-reaching shifts to the economic context. Well-targeted, structured, and sequenced policies to encourage specific sectors can also play a role in diversifying Qatar’s economy. Export markets and competition should be deliberately used to hold recipients of support accountable. Policies to encourage specific sectors have resulted in little more than inefficient import substitution in many countries. Avoiding this outcome requires discipline: support should be withdrawn in the absence of progress.
June 3, 2019
Qatar: 2019 Article IV Consultation-Press Release; Staff Report
Description: This 2019 Article IV Consultation discusses that stronger real gross domestic product (GDP) growth is envisaged in the near term, with a recovery in hydrocarbon output. Medium-term growth will be buoyed by increased gas production and non-hydrocarbon growth. Expenditure consolidation would help to sustain fiscal and external surpluses. Ample liquidity will enable credit growth to support non-hydrocarbon GDP. Trade and geopolitical tensions could undermine investor confidence and weaken fiscal and external positions. The policy priorities are fiscal consolidation, strengthened fiscal policy frameworks, enhanced resiliency of the financial sector, financial inclusion, and a diversified economy. The financial sector remains sound, underpinned by strong profitability and capital. Strengthening the regulatory and supervisory frameworks would help to bolster financial stability. Attention to women’s empowerment by introducing legislation emphasizing equality in remuneration and avoiding gender-based discrimination would support inclusive growth.
June 1, 2019
Republic of Mozambique: Technical Assistance Report on Managing Fiscal Decentralization and Strengthening Cash Management
Description: The report contributes to efforts on strengthening expenditure control and cash flow management, and ensuring effective fiscal coordination and reporting in the context of the planned fiscal decentralization.
May 31, 2019
República de Moçambique: RELATÓRIO DA MISSÃO DE ASSISTÊNCIA TÉCNICA EM ESTATÍSTICAS DE FINANÇAS PÚBLICAS (27 DE AGOSTO A 7 DE SETEMBRO DE 2018); Relatório do FMI n.º 23/52; MAIO 2019
Description: This technical assistance (TA) mission on Government Finance Statistics (GFS) was conducted during August 27-September 7, 2018. The main purpose of the mission was to review the progress made by the authorities in implementing previous TA recommendations and provide further support to strengthen the compilation and dissemination of GFS in line with international standards set out in the Government Finance Statistics Manual 2014 (GFSM 2014).
May 31, 2019
Islamic Republic of Mauritania: Third Review Under the Extended Credit Facility Arrangement-Press Release; Staff Report; and Statement by the Executive Director for the Islamic Republic of Mauritania
Description: This paper discusses Islamic Republic of Mauritania’s Third Review of Arrangement under the Extended Credit Facility. The program aims at entrenching macroeconomic stability, supporting inclusive and job creating growth, and building international reserve buffers. The authorities plan to use the prospective fiscal space prudently for priority social spending—education, health, and social protection—and public infrastructure. The economic outlook has improved, buoyed by more favorable terms of trade and the upcoming development of a large offshore gas field. Growth is projected to accelerate to 6 3/4 percent this year, supported by a recovery in extractive sectors and continued broad-based non-extractive growth reflecting strong domestic demand and budding diversification. Downside risks related to global economic developments, commodity price volatility, and regional security concerns remain elevated. Considerable challenges remain to entrench macroeconomic stability, support inclusive growth, and build resilience to shocks. The prospective fiscal space should be used prudently for priority social policies and public infrastructure.
May 30, 2019
Zimbabwe: Staff-Monitored Program-Press Release and Staff Report
Description: This paper discusses the Staff-Monitored Program (SMP) for Zimbabwe and highlights that the new government that assumed office following the July 2018 elections is committed to addressing the macroeconomic imbalances, removing structural distortions to facilitate a resumption in growth, and to re-engaging with the international community including by clearing its external arrears. The SMP will be monitored on a quarterly basis and is intended to assist the authorities in building a track record of implementation of a coherent set of economic and social policies that can facilitate a return to macroeconomic stability and assist in reengagement with the international community. With limited access to external financing and the very low level of international reserves, the authorities’ room for manoeuvre is very narrow. There are also significant implementation risks of the monetary and exchange rate reforms, as well as addressing governance and corruption weaknesses, which could adversely impact the attainment of SMP objectives.