Country Reports
2018
July 5, 2018
Tuvalu: 2018 Article IV Consultation – Press Release; Staff Report and Statement by the Executive Director for Tuvalu
Description: Tuvalu is a fragile micro state. The country’s remoteness, narrow production base, and weak banking sector constrain private sector activity, leaving public expenditure as the main source of growth. The DSA finds that Tuvalu remains at high risk of debt distress.
July 5, 2018
Republic of Moldova: Third Reviews under the Extended Credit Facility and Extended Fund Facility Arrangements and Request for Modification of Performance Criteria – Press Release; Staff Report; and Statement by the Executive Director for the Republic of Moldova
Description: The economy strengthened in 2017. Higher-than-expected GDP growth was driven by strong domestic demand and a positive external environment. Inflation slowed, driven by regulated and food prices, prudent policies and exchange rate appreciation, to below the target of the National Bank of Moldova (NBM).
July 4, 2018
Germany: 2018 Article IV Consultation – Press Release; Staff Report and Statement by the Executive Director for Germany
Description: The Germany economy has performed very well in recent years, supported by prudent economic management and past structural reforms. Growth is robust, employment is rising, and the unemployment rate has fallen to levels not seen in decades. Inflation remains low but wage growth is picking up, reflecting the strength of the labor market. Looking beyond these positive cyclical developments, unfavorable demographics will soon weigh on potential growth and put pressure on public finances. Having already accumulated sizable buffers through savings, Germany should now prioritize domestic investment in physical and human capital to prepare for the future. The new government's coalition agreement contains several welcome measures in this direction, but more forceful actions to boost labor supply and increase labor productivity would help stimulate domestic investment and reduce Germany’s large current account surplus.
July 3, 2018
Honduras: 2018 Article IV Consultation – Press Release; Staff Report and Statement by the Executive Director for Honduras
Description: The IMF-supported program (2014-17) succeeded in reducing Honduras' macroeconomic imbalances. The next step is to adopt institutional reforms to entrench macroeconomic stability to put Honduras on a higher potential growth path.
July 3, 2018
New Zealand: 2018 Article IV Consultation – Press Release; Staff Report; and Statement by the Executive Director for New Zealand
Description: New Zealand's economy has enjoyed a solid expansion since 2011. With a persistent net migration wave, potential output has moved closely in line with actual output, and economic slack has decreased slowly. Macroeconomic imbalances overall have narrowed, although macro-financial vulnerabilities have risen with rapid house price increases. The new coalition government seeks to make growth more inclusive.
July 3, 2018
New Zealand: Selected Issues
Description: This Selected Issues paper focuses on gaps and multiplier effects of infrastructure investment in New Zealand. There has been high quality work done to quantify the infrastructure gap for New Zealand by Oxford Economics on behalf of the Global Infrastructure Hub, drawing on international experiences and local data sources, but recognizing the risk that the infrastructure gap may be even larger than that stated in this work. This paper provides further analysis about the effects on New Zealand’s economy of closing the infrastructure gap. Closing the gap has quantifiable benefits, not just because it is a short-term stimulus to aggregate demand, but because of longer-lived effects on productivity, benefiting all sectors of the economy. There are prospective gains from closing New Zealand’s infrastructure gap. New Zealand has improved its infrastructure spending in the past several years. Nonetheless, there is scope to expand it further, to reduce its (admittedly small, but probably understated) infrastructure gap to match other advanced economies, and possibly help with regional development concerns.
July 3, 2018
United States: 2018 Article IV Consultation – Press Release; Staff Report and Statement by the Executive Director for United States
Description: Unemployment is low, inflation is well contained, and growth is set to accelerate. During the course of this administration, the economy is expected to enter the longest expansion in recorded U.S. history.
June 29, 2018
Seychelles: First Review under the Policy Coordination Instrument and Request for Modification of Targets - Press Release; Staff Report
Description: This paper discusses Seychelles’ First Review Under the Policy Coordination Instrument (PCI) and Request for Modification of Targets. All quantitative targets for end-December 2017, the program’s first review test date, were met. Although there are no structural reform targets due for the first review, the structural agenda for 2018 is proceeding in line with the program. Given the authorities’ strong program implementation and continued commitment to safeguarding macroeconomic stability, the IMF staff supports the authorities’ request for the completion of the first review under the PCI and the modification of the end-June 2018 and end-December 2018 quantitative targets for reserve money.
June 29, 2018
Union of the Comoros: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Union of the Comoros
Description: This 2018 Article IV Consultation highlights that the Comorian economy’s performance improved in 2017. Growth is estimated at 2.7 percent for 2017, half a percentage point higher than in the previous year. A combination of factors contributed to this outcome, notably an improved electricity situation relative to 2016, increased exports, and stronger remittances flows. However, the economy was held back by a perceived deterioration in the business climate and tensions in the financial sector. Inflation remained moderate. The near-term outlook remains challenging in the absence of further reform efforts. The authorities’ reform agenda and investment plans, undertaken in the context of their revised strategic development plan will help raise potential growth rates going.
June 29, 2018
Union of the Comoros: Selected Issues
Description: This paper examines Comoros’ weak domestic revenue and volatile windfall revenues. Weak revenue mobilization and the reliance on volatile one-off windfall gains remains a significant development challenge for Comoros. Weak revenue mobilization not only makes it more difficult for Comoros to finance its significant development needs, but also increases the budget’s reliance on uncertain and volatile one-off revenue streams. Sustainably improving revenue mobilization based on realistic and attainable budgetary targets, is key for financing Comoros’ medium to long-term development goals without endangering debt sustainability. Broadening the tax base and thereby increasing the tax ratio to develop more predictable budgetary financing sources will aid execution of Comoros’ ambitious investment program that underpins the country’s development strategy.