Country Reports
2023
June 29, 2023
Republic of Croatia: 2023 Article IV Consultation-Press Release; Staff Report; and Staff Statement
Description: On January 1, 2023, Croatia became the 20th member of the eurozone. The country posted another strong growth year in 2022, among the highest in the eurozone. But the momentum started to slow in H2, while inflation rose to a multi-decade high, reflecting indirect impacts from Russia’s war in Ukraine. Staff expects growth to moderate to 2.4 percent in 2023 and recover to its potential over the medium term. Inflation is projected to average 7½ percent in 2023 and gradually fall towards the 2 percent target. The outlook is subject to considerable uncertainty. Risks to growth are broadly balanced and risks to inflation are tilted to the upside.
June 29, 2023
Lebanon: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Lebanon
Description: Lebanon’s severe and multifaceted crisis, triggered by sizable deposit outflows and followed by the country’s first ever external public debt default, has been raging for more than three years. It was aggravated by the COVID-19 crisis and the Beirut port explosion in August 2020, but also allowed to persist and deepen by a failure to take much needed policy action, hampered by a lasting political crisis and resistance from vested interests to reforms. The economic and social impact of the crisis has been staggering: output contracted by an estimated 40 percent over 2019–22, the lira lost about 98 percent of its value in the parallel market, triple digit inflation has decimated real incomes, and unemployment and poverty have increased sharply. After three years, the public sector is failing, the provision of public services is almost nonexistent, and the banking sector has collapsed. Informality and the shadow economy have increased sharply.
June 28, 2023
Seychelles: Requests for an Extended Arrangement under the Extended Fund Facility and Arrangement under the Resilience and Sustainability Facility and Cancellation of the Current Arrangement Under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for Seychelles
Description: Under the current EFF, the authorities have made substantial progress in restoring macroeconomic stability and debt sustainability after being hit hard by the COVID-19 pandemic. Now, they would like to pivot to the deeper medium-term structural reforms needed to support structural balance of payments needs and promote sustainable and inclusive growth. To support this pivot, they have requested the cancellation of the current EFF and the approval of a new one. Concurrently, they have requested a program under the Resilience and Sustainability Facility (RSF) to help advance their climate agenda, including measures to enhance resilience to climate-related shocks.
June 28, 2023
Republic of Fiji: 2023 Article IV Consultation-Press Release; and Staff Report
Description: As a small island dependent on tourism, Fiji’s economy contracted sharply with the pandemic and then rebounded strongly in 2022, as tourism recovered with the reopening of international travel. Growth momentum is expected to continue in 2023, as tourist inflows approach pre-pandemic levels. The new government installed in December has committed to pursue economic reforms that promote inclusive growth and fiscal sustainability. Downside risks to the outlook stem from weaker growth in tourism-source countries, delayed recovery in hotel capacity, and exacerbated skilled labor shortages. Fiji remains vulnerable to external shocks related to natural disasters and climate change.
June 28, 2023
Jamaica: Technical Assistance Report-Climate Public Investment Management Assessment (C-PIMA)
Description: Jamaica is highly exposed to multiple natural hazards, including tropical cyclones, floods, and droughts. Jamaica ranks 47th out of 191 countries in the 2023 Inform Risk index.1 Jamaica suffers from damaging winds, rain, and storm surges, especially during the tropical cyclone season. Over the coming decades, Jamaica is expected to experience more heatwaves, more irregular rainfalls that bring heightened hazards of droughts or flooding, stronger tropical cyclones, and raising sea levels. Intensified climate hazards interact with socioeconomic vulnerability in Jamaica—since infrastructure, population and tourism activities are concentrated in the coastal areas—amplifying climate related costs to the country’s physical assets, population, and the broader economy.
June 27, 2023
Costa Rica: Fourth Review Under the Extended Arrangement Under the Extended Fund Facility, First Review Under the Resilience and Sustainability Arrangement, Request for Modification of Reform Measure Under the Resilience and Sustainability Facility, and Monetary Policy Consultation-Press Release; and Staff Report
Description: Recent developments. Growth has been resilient despite global headwinds and inflation is on a strong downward trend. The easing of external pressures has allowed the authorities to rebuild reserves, while the ongoing fiscal consolidation has strengthened debt sustainability and contributed to upgraded sovereign ratings.
June 27, 2023
Suriname: Second Review Under the Extended Arrangement Under the Extended Fund Facility, Requests for Rephasing and Reduction of Access, Waivers of nonobservance of Performance Criteria and Financing Assurances Review-Press Release; Staff Report; Staff Supplement; Staff Statement; and Statement by the Executive Director for Suriname
Description: The program went off-track in mid-2022, due to the delayed completion of a prior action on parliamentary approval of the VAT law and, subsequently, to spending overruns which injected local currency liquidity into the system, fueling currency depreciation and inflation. The authorities have taken concerted efforts to restore fiscal discipline including through passage of a 2023 budget. The central bank has also taken measures to tighten monetary conditions. Progress has been made in restructuring both official and privately-held public debt.
June 26, 2023
United Arab Emirates: 2022 Article IV Consultation-Press Release; and Staff Report
Description: The 2022 Article IV Consultation highlights that United Arab Emirates (UAE) economic growth strengthened in 2022, benefitting from a rapid and effective coronavirus disease response, supportive fiscal measures, and the benefits of earlier social and business-friendly reforms. The economic outlook remains positive, supported by strong domestic activity. Overall, gross domestic product is projected to grow at 3.6 percent in 2023, with non-hydrocarbon growth of 3.8 percent driven by continued tourism activity and increased capital expenditure. Strong reform efforts continue under the UAE 2050 strategies. Advancement on Comprehensive Economic Partnership Agreements will boost trade and integration in global value chains and further attract Foreign Direct Investment. In addition, the benefits of artificial intelligence and digitalization and investments in enabling infrastructure will further support economic diversification, foster a smooth energy transition, and help address vulnerabilities from global decarbonization efforts. Long-term vulnerabilities from global decarbonization efforts are being addressed through commitments to climate initiatives and a balanced approach to energy transition.