Country Reports
2023
July 13, 2023
Zambia: 2023 Article IV Consultation, First Review Under the Extended Credit Facility Arrangement, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Zambia
Description: Zambia has made commendable progress over the last two years in implementing its reform agenda to stabilize the economy, lay the foundation for inclusive growth, and create jobs against the backdrop of significant external shocks. The authorities reached an agreement with official creditors on June 22 on a debt restructuring consistent with program parameters. The restoration of fiscal and debt sustainability, together with reforms to boost private and human capital investment, and strengthen governance and anti-corruption, support a positive medium-term economic outlook. Nonetheless, with poverty and inequality amongst the highest in the world and climate vulnerabilities high, significant challenges remain. Sustained efforts are essential to maintain fiscal credibility while also creating sufficient space for social, development, and climate spending.
July 13, 2023
Republic of Mozambique: Second Review Under the Three-Year Arrangement Under the Extended Credit Facility, Requests for Modification of The Monetary Policy Consultation Clause, Waivers of Nonobservance for Quantitative Performance Criteria, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Mozambique
Description: The economic recovery is broad-based and strengthening. Inflation pressures remain moderate reflecting favorable domestic food production and stable fuel prices. Fiscal performance in 2022 was worse than expected, mainly due to slippage in the wage bill reform and revenue underperformance. Mozambique has been grappling with the impact of Cyclone Freddy and a persistent cholera outbreak. The security situation in the North has improved; municipal elections will be held in October 2023, and general elections in October 2024.
July 12, 2023
Niger: Third Review Under the Extended Credit Facility Arrangement, Request for Extension, Rephasing, and Modification of Performance Criteria of the Extended Credit Facility Arrangement, and Request for an Arrangement Under the Resilience and Sustainability Facility-Press Release; Staff Report; and Statement by the Executive Director for Niger
Description: Niger continues to face substantial development needs, exacerbated by rapid population growth. Niger is also one of the most vulnerable countries to the effects of climate change. Given the importance of rain-fed agriculture for the country’s economy, climate change is a significant driver of chronic food insecurity and conflict, notably by intensifying competition for scarce resources. These challenges, coupled with a deterioration of the security situation, further hinder Niger’s development prospects in a context of fragility.
July 11, 2023
United Kingdom: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the United Kingdom
Description: Market stress following the September 2022 'mini-budget' has dissipated, in the context of a successful financial stability intervention by the Bank of England (BoE) and two prudent budgets. Post-Brexit uncertainty has declined somewhat due to the Windsor Framework agreement to resolve disputes around the Northern Ireland Protocol. Still, the economy faces several challenges. The post-pandemic recovery was disrupted by the sharp energy price shock due to Russia’s war in Ukraine; labor force participation has declined, mainly on account of rising long-term illness; and large policy rate increases—needed to arrest high and sticky inflation—have tightened financial conditions. Accordingly, and despite recent upgrades, GDP growth is forecast at a modest 0.4 percent for 2023, followed by 1 percent growth in 2024. Lower energy prices and emerging economic slack is projected to help reduce headline inflation to around 5¼ percent by end-2023 and to the 2 percent target by mid-2025. Risks are tilted to the downside for growth and to the upside for inflation. Tighter-than-expected global financial conditions present the key downside risk to growth, while robust wage growth and greater inflation persistence pose upside risks to inflation.
July 10, 2023
Cameroon: Fourth Reviews Under the Extended Credit Facility and the Extended Fund Facility Arrangements, and Requests for Waiver for Nonobservance of Performance Criterion and Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Cameroon
Description: Cameroon’s recovery has continued, despite security concerns and external risks, including tight global financial conditions and increased oil price volatility. Cameroon is a fragile and conflict affected state, with drivers of fragility ranging from insurgency and conflicts along its borders and in neighboring countries, to poor governance, social exclusion, and climate change. Nevertheless, economic prospects remain positive in the medium term, provided reforms continue, and the external environment is supportive. The three-year arrangements under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) approved in July 2021 amount to SDR (Special Drawing Rights) 483 million (about US$689.5 million, or 175 percent of quota). Completion of the fourth review will allow a disbursement of SDR 55.2 million (about US$73.3 million).
July 7, 2023
Ukraine: First Review under the Extended Arrangement under the Extended Fund Facility-Press Release; Staff Report; Staff Statement; and Statement by the Executive Director for Ukraine
Description: Russia’s invasion of Ukraine continues to have a devastating economic and humanitarian impact. In addition to the continuing combat in Eastern and Southern parts of Ukraine, air raids on Kyiv and other population centers have been escalating since early May; the recent destruction of the Kakhovka dam has added to the challenges. The war is having a severe impact on human and physical capital, with loss of life, drop in living standards and rise in poverty, as well as infrastructure damages. Despite the resilience of the Ukrainian people and the authorities’ skillful policymaking in maintaining macroeconomic and financial stability, continuous external support is critical to help restore medium-term external viability, prepare the country for post-war recovery and reconstruction, and facilitate Ukraine’s path to EU accession.
July 7, 2023
Chile: Technical Assistance Report-Fiscal Considerations in Managing Stabilization Funds
Description: Chile’s strong fiscal framework has served the country well. The fiscal rule has helped insulate the budgets from volatility in resource prices and economic activity. The sovereign wealth fund (SWF)—the Economic and Social Stabilization Fund (ESSF) and the Pension Reserve Fund (PRF)—was established to encourage savings over time and has provided buffers for stabilizing the economy. During the pandemic, Chile has appropriately used the ESSF to provide swift and impactful support to protect people. Recent efforts to upgrade the fiscal framework— adopt a medium-term fiscal path, formalize a prudent debt ceiling, and introduce an escape clause—can further safeguard fiscal sustainability.