Country Reports
2024
March 11, 2024
Sweden: 2024 Article IV Consultation-Press Release; and Staff Report
Description: After a strong post-pandemic performance, economic activity has weakened. GDP contracted slightly in 2023. An unprecedented monetary policy tightening started in mid-2022 to rein in inflation, which has been declining after peaking at 10.8 percent in end-2022. Weak real incomes, elevated interest expenses, and declining real estate valuations have weighed on private consumption and residential investment and strained the highly levered commercial real estate sector. Policies need to carefully maneuver the economy. Strengthening productivity growth is a key medium-term challenge.
March 11, 2024
Finland: 2024 Article IV Consultation-Press Release; and Staff Report
Description: Recent developments and outlook. Weak household income growth, falling house prices, higher interest rates, and stagnation in Europe has caused activity to stall in Finland, with a contraction of 0.5 percent estimated in 2023. Labor markets have shown resilience, but unemployment is expected to increase somewhat in coming months, especially from the construction sector. However, inflation has fallen to more normal levels and financial conditions appear to be easing, paving the way for a modest recovery this year, strengthening further in 2025.
March 10, 2024
Malaysia: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Malaysia
Description: Malaysia’s growth momentum has slowed but remains resilient to external headwinds. While monetary policy has paused its tightening cycle, fiscal policy is consolidating, and the ringgit had been under pressure through most of 2023. The government’s commitment to the reform priorities outlined in its national strategic plans is yet to fully materialize, with the economy’s path to high-income status hanging in the balance.
March 8, 2024
St. Lucia: 2023 Article IV Consultation-Press Release; and Staff Report
Description: The economy has rebounded strongly after the Covid-19 pandemic and the commodity import price shock due to Russia’s war in Ukraine; output is currently near the pre-pandemic level. Higher government revenue has narrowed the fiscal deficit, but public debt is much higher than before the pandemic. The banking sector has adequate liquidity and is profitable, but NPLs are elevated, and additional provisioning is required. Rapid credit growth in the large credit union sector is a concern, and several institutions require additional capital.
March 8, 2024
Jamaica: 2024 Article IV Consultation and Second Reviews Under the Arrangement Under the Precautionary and Liquidity Line and Arrangement Under the Resilience and Sustainability Facility-Press Release; Staff Report; and Statement by the Executive Director for Jamaica
Description: Over the last decade, Jamaica has successfully reduced public debt, anchored inflation, and strengthened its external position. It has built a strong track record of investing in institutions and prioritizing macroeconomic stability. This allowed Jamaica's response to recent global shocks to be prudent, agile, and supportive of growth. During the most recent fiscal year growth has remained strong, and inflation is converging to the Bank of Jamaica’s inflation target band.
March 6, 2024
Principality of Andorra: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Principality of Andorra
Description: After a remarkable recovery, the Andorra economy continues to grow slightly above potential despite significant external headwinds. Headline inflation is elevated amidst persistent core inflation and a tight labor market. The banking sector remains profitable, well-capitalized, and liquid.
March 5, 2024
Botswana: Financial Sector Assessment Program-Technical Note on Financial Sector Safety Nets, Crisis Management, and Bank Resolution Framework
Description: The financial safety net framework in Botswana is incomplete, while crisis preparedness and management structures must be expanded.2 The Bank of Botswana (BoB) lacks an emergency liquidity support mechanism for commercial banks, bank resolution and liquidation remain under the Companies Act, and there is no deposit insurance system. A 2016 TA mission3 on “Banking Sector Safety Net and Crisis Management” identified many deficiencies. To date, there has been limited progress in achieving the recommendations.
March 5, 2024
Botswana: Financial Sector Assessment Program-Detailed Assessment of Observance—Basel Core Principles for Effective Banking Supervision
Description: Despite significant progress improving supervisory frameworks since the last assessment in 2007, supervisory powers remain underdeveloped. The current Banking Act was adopted in 1995 and has several deficiencies such as an absence of provisions for consolidated supervision, major acquisitions, and changes in significant shareholding. There is need for a more frequent and comprehensive review of the regulatory framework to ensure they remain relevant to changing industry and regulatory practice. The regulatory framework needs to be updated to align closer with recent Basel norms, guidance, and principles, particularly in the risk management areas specified below. Supervision tools and methodologies and guidance to supervisors need to be augmented as specified below to make supervision more forward-looking and effective. The planned revision of the Banking Act should aim to address gaps and help strengthen powers and support more intrusive supervision.
March 5, 2024
Botswana: Financial Sector Assessment Program-Technical Note on Systemic Liquidity Management
Description: The challenges of Botswana’s highly interconnected financial system requires an effective systemic liquidity management framework. Commercial banks’2 funding sources from corporates and non-bank financial institutions (NBFIs) and credit exposures to households create avenues for risk transmission. Corporations and NBFIs (pension funds and insurance companies) constitute the main depositors of the banking sector. Strong linkage also exists between banks and the household sector, as households contribute 21 percent of banks’ total deposits and receive 67 percent of banks’ total lending in the form of unsecured loans.