Country Reports
2022
September 20, 2022
Democratic Republic of São Tomé: Fifth Review Under the Extended Credit Facility Arrangement, Request for Waiver of Nonobservance of Performance Criterion and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for the Democratic Republic of São Tomé
Description: The COVID-19 pandemic exacerbated long-standing socio-economic vulnerabilities, which were further compounded by persistent energy shortages, flood-related damages at end-2021, and a sharp increase in global fuel and food prices caused by the war in Ukraine. These have put pressure on domestic inflation, aggravated electricity shortages, and disrupted business activities, with negative implications for growth in 2022. Protracted negotiations with labor unions resulted in additional wage supplements for the lowest paid category of civil servants in June 2022. Parliamentary elections are scheduled to be held in September 2022.
September 20, 2022
Papua New Guinea: 2022 Article IV and the Staff Monitored Program-Press Release; Staff Report; and Statement by the Executive Director for Papua New Guinea
Description: Papua New Guinea (PNG)’s economy is weathering the pandemic well, despite many challenges. Real GDP in 2022 is projected to exceed its 2019 level, and the medium-term outlook is positive, supported by investment in (and revenues from) the resource sector. The war in Ukraine is impacting PNG through higher commodity prices and higher inflation, with the former leading to a stronger balance of payments and higher fiscal revenues, since PNG is a large commodity producer. Risks remain skewed to the downside and include a worsening health situation given the low vaccination rate, volatility in commodity prices, and political instability.
September 19, 2022
Norway: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Norway
Description: The economy bounced back strongly from the first wave of Covid-19 pandemic, and the recovery is well entrenched in 2022. However, risks to the outlook are considerable, given the uncertainty over spillovers from the war in Ukraine, the intensity of the pandemic globally, and in Europe, in particular, and supply bottlenecks. Given the strong fundamentals, Norway is relatively shielded and there are both upside (higher energy prices and export volumes) and downside risks (lower demand from Europe for non-energy exports). The forecast is especially sensitive to where energy prices settle, whether energy supply to Europe will be disrupted, and Norway’s capacity to increase gas supplies to Europe.
September 16, 2022
West Bank and Gaza: Selected Issues
Description: For more than a decade, commercial banks in West Bank and Gaza (WBG) have struggled to manage buildups of excess physical Israeli shekel cash. Banks elsewhere typically manage the amount and currency composition of physical cash they hold in their vaults through transactions with other commercial banks and central banks. However, citing money laundering and terrorism financing (ML/TF) concerns, the two Israeli banks that currently offer correspondent services to banks operating in WBG no longer offer them cash services. The Bank of Israel (BoI) has imposed limits on the amount of shekel coins and notes it accepts back from Palestinian banks. This has long hindered liquidity management and been a drag on the profitability of Palestinian banks, but periodic large increases in excess cash in recent years have created additional risks and raised the costs to the Palestinian banking system.
September 16, 2022
West Bank and Gaza: Report to the Ad Hoc Liaison Committee
Description: The Palestinian economy is facing formidable challenges. The fiscal situation, high political, security and social tensions, rising inflation, movement and access restrictions and an unfinished structural agenda all weigh on the medium-term outlook. Under unchanged policies, debt is unsustainable and per capita GDP is projected to decline. The situation is particularly dire in Gaza with persistently high unemployment and poverty.
September 16, 2022
Thailand: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Thailand
Description: Thailand’s economy is recovering from an unprecedented crisis emanating from multiple waves of the COVID-19 pandemic. Ample policy space has allowed a swift and bold policy response and vaccine rollout has accelerated. However, the recovery is weak and uneven across sectors, with inflation rapidly rising driven by energy prices. Downside risks dominate the outlook, sharpening policy tradeoffs. The pandemic has also brought to the fore the urgency for Thailand to identify new growth drivers to reverse the pre-pandemic trend of declining productivity growth and meet the challenges of the post-pandemic world.
September 16, 2022
United Arab Emirates: Technical Assistance Report-Hedonic Methods for Price Indices Mission
Description: A technical assistance (TA) mission was conducted remotely during January 16-20, 2022 to assist the Dubai Statistics Center (DSC) in introducing hedonic methods for quality adjustments in the consumer price index (CPI) and the real estate price index (REPI). Currently the REPI is compiled by DSC using stratification with simple averages. Moving from simple averages to hedonic regressions will improve the accuracy of the indicator since it will take into account the quality mix of properties within each stratum. The mission recommended the hedonics time dummy method with a rolling window of 12 months for compiling the REPI. This method provides more stable results, i.e., less volatile indices, since it pools one year of data instead of one quarter, and it is particularly recommended when few observations are available. It is widely used for Residential Property Price Index compilation and for CPI compilation with web scraped data. The TA mission provided extensive training on using this method accompanied by R codes adapted to the Dubai sample data.
September 16, 2022
Brunei Darussalam: 2022 Article IV Consultation-Press Release; and Staff Report
Description: After successfully weathering the pandemic in 2020, Brunei was hit by new waves of COVID-19, with case numbers going up significantly and new lockdown measures imposed in H2 2021. Reduced activities in mining and LNG manufacturing, combined with the negative impact of new pandemic variants on domestic services, led to a slowdown in the economy. Real GDP contracted by 1.6 percent in 2021. For 2022, growth is projected to rebound to 1.2 percent, on the back of easing of mobility constraints and a positive terms of trade shock due to surges in O&G prices. Inflation, while remaining relatively low at 2.2 percent at end 2021, has increased in 2022 and pressures are expected to remain elevated in the short term, owing to supply disruptions and higher food and fuel prices. The economy continues to diversify, with double-digit growth of the food/agriculture sector and a new fertilizer sector commencing production. The risks to the outlook are tilted to the downside, due to potential new COVID-19 variants, increased global uncertainty associated with an escalation of the war in Ukraine, monetary tightening from the US and a larger-than-expected growth slowdown in China. On the upside, higher energy prices would further improve the terms of trade and restore fiscal positions in the short term, while partially contributing to build the buffers needed to ensure stronger intergenerational equity. Strong policy actions are needed to boost medium-term growth and foster resilience.