Country Reports
2024
January 24, 2024
Greece: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Greece
Description: Greece’s economic outlook has improved notably, but significant challenges remain. The economy has resumed income convergence, ending a decade of stagnation with high unemployment and low investment amid large deleveraging. Real GDP has expanded beyond the pre-pandemic trend level, driven by the cyclical recovery of tourism demand and the resumption of structural reforms and investment in the context of Next Generation EU. Strong growth and high inflation have brought the public debt-to-GDP ratio down below its pre-pandemic level with limited financing risks in the medium term due to the favorable debt structure. However, despite regaining sovereign investment grade status and improving bank balance sheets, the economy is facing macro-financial challenges amid significant monetary policy tightening, persistent core inflation, and rising real estate prices. Structural imbalances arising from low household savings and still low level of investment as well as increasing risks from climate change are weighing on medium-term growth prospects.
January 23, 2024
Antigua and Barbuda: 2023 Article IV Consultation-Press Release; and Staff Report
Description: Antigua and Barbuda’s economy continues its solid expansion with growth projected at 5.7 percent for 2023. Tourism and construction activity have both been strong, with real activity expected to return to its pre-pandemic level during 2023. After reaching 9.2 percent at end-2022, inflation fell to 6.6 percent by August of this year, with core inflation steadily declining. The current account deficit widened to an estimated 16.2 percent of GDP in 2022 with higher tourism receipts more-than-offset by an increase in goods imports and a worsening in the terms of trade. The current account deficit is expected to fall to around 12 percent of GDP this year. The rebound in nominal GDP lowered public debt to 87 percent of GDP at end-2022, from 95 percent of GDP at end-2021. Nonetheless, gross financing needs are high, and there has been limited progress in resolving arrears to creditors and domestic suppliers. Financial sector balance sheets are healthy. However, credit union lending has continued to grow rapidly, albeit from a low base, raising concerns about future credit quality.
January 19, 2024
Maldives: Financial Sector Assessment Program-Technical Note on Bank Stress Testing and Climate Risk Analysis
Description: A systemic vulnerability analysis and stress tests were conducted as part of the Maldives FSAP. The vulnerability analysis and stress tests were based on quarterly aggregate balance sheet supervisory data for the eight banks in Maldives as of December 2022. Identified vulnerabilities were subjected to hypothetical extreme but plausible scenarios that were informed by the Risk Assessment Matrix. Risks analyzed were credit risk, liquidity risk and market risk. Credit risks materialized as non-performing loans and pressure on pre-provision income, liquidity risks as deposit outflows, and market risks as changes in interest and exchange rates.
January 19, 2024
Maldives: Financial Sector Assessment Program-Technical Note on Financial Safety Net and Crisis Management Arrangements
Description: Maldives legislation includes important elements of a financial safety net and crisis management framework but there are areas for streamlining and improvement. Shortcomings in the early intervention and bank resolution frameworks need to be addressed, including internal arrangements on the escalation process from the exercise of the MMA’s power to take enforcement actions through to the initiation of resolution. The overall design of the resolution tools is complex -the MBA includes different mechanisms for the same resolution tools- and requires streamlining. MMA should develop an effective emergency liquidity assistance framework. Deposit insurance system should be enhanced.
January 19, 2024
Maldives: Financial Sector Assessment Program-Technical Note on Macroprudential Policy
Description: The Maldives Monetary Authority (MMA) is the entity responsible for maintaining financial stability. The Board of the monetary authority has decision-making powers over MMA’s three mandates (in order of priority): maintain price stability, maintain financial stability, provide assistance to the government in attaining economic development and stability. To maintain financial stability, MMA regulates and supervises the financial institutions and oversees the payments and settlements system. It also houses a Credit Information Bureau (CIB), a key element for both micro and macroprudential supervision. The securities market, outside of the scope of MMA, is regulated by the Capital Market Development Authority (CMDA).
January 19, 2024
Nicaragua: 2023 Article IV Consultation-Press Release; and Staff Report
Description: The Nicaraguan economy remained resilient through multiple shocks over the past five years, supported by appropriate policies, substantial pre-crisis buffers (primarily government deposits), and multilaterals support. After a strong rebound in 2021, the economy continued to grow at a steady pace in 2022 and through June 2023 (3.8 percent). Inflation slowed down, the fiscal position turned into a surplus, and record-high remittances, sustained Foreign Direct Investment (FDI) and prudent policies supported a continued accumulation of gross international reserves. Banks remain well capitalized, and the loan portfolio is steadily improving with the economic recovery.
January 19, 2024
Pakistan: First Review Under the Stand-by Arrangement, Requests for Waivers of Applicability of Performance Criteria, Modification of Performance Criteria, and for Rephasing of Access-Press Release; Staff Report; and Statement by the Executive Director for Pakistan
Description: Recent developments. Following the 2022 floods and the acute financial pressures earlier in the year, economic activity has stabilized and inflation has begun to gradually decline on the back of strong policy adjustment. External pressures have eased somewhat since June, and the SBP has taken advantage of renewed inflows to begin rebuilding foreign exchange (FX) reserves. Fiscal performance has also improved, with the general government achieving a primary surplus in FY24Q1. Despite this welcome progress, the outlook is still challenging, and downside risks remain exceptionally high.
January 18, 2024
Australia: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Australia
Description: Australia’s post-pandemic recovery remained strong. However, growth is weakening on the heels of tighter macroeconomic policies and financial conditions. While inflation has peaked, it remains persistently high. Labor market shows signs of easing, and the positive output gap is narrowing. Increased cost of living started to weigh on household consumption. The economy remains resilient in the near term but confronts a secular productivity slowdown. Financial stability risks remain contained although pockets of vulnerability exist and risks of spillovers from global financial conditions have increased since the last Article IV.