Country Reports
2022
June 29, 2022
Romania: Technical Assistance Report on Improving Revenues from the Recurrent Property Tax
Description: This paper highlights Romania’s Technical Assistance report on improving revenues from the recurrent property tax. The current area-based property tax system in Romania is inefficient, producing revenue below its potential, while the taxable value determination is inequitable and complex. The best guiding principle for the property tax reform is to remind taxpayers that a property tax is in the first instance a benefit tax. Comprehensive property tax reform is complex, requiring both political and technical coordination, informed by realistic timelines. In respect of a recurrent property tax, there are two broad approaches to determine a taxable amount. The first approach—value-based assessment—utilizes methods and techniques that rely on market transactions to inform the value of property. It is generally agreed amongst experts that where it is possible to use the market-value approach in practice, since it provides the better, more buoyant, and more equitable tax base. A value-based assessment tends to better differentiate the tax burden between low-income and high-income households—accounting better for ability-to-pay or vertical equity.
June 27, 2022
Guinea-Bissau: 2022 Article IV Consultation and Third Review under the Staff-Monitored Program; Press Release; and Statement by the Executive Director for Guinea-Bissau
Description: This paper discusses Guinea-Bissau’s 2002 Article IV Consultation and Third Review under the Staff-Monitored Program. Guinea-Bissau’s economy has recovered well from the coronavirus disease 2019 pandemic. Growth is projected to reach 3.8 percent in 2022 supported by a continued strong performance of the cashew sector and a relatively stable political situation. The authorities are committed to pursue fiscal consolidation in line with the 2022 budget objectives to continue securing overall debt sustainability. Sustained and inclusive growth will require strengthening governance as well as revenue mobilization to enable priority and infrastructure spending. High levels of nonperforming loans and a large undercapitalized bank need to be addressed to bolster financial intermediation. Also, diversification is needed to create job opportunities and reduce reliance on the cashew nut sector. Program performance at end-December 2021 toward establishing a track record was satisfactory. The 2022 budget and its execution, and the implementation of the tax reform package approved by parliament supports the envisaged fiscal consolidation path. Downside risks remain, including a more protracted high energy and food prices and pandemic that could trigger social tensions and political instability.
June 27, 2022
The Gambia: Fourth Review under the Extended Credit Facility Arrangement, Request for a Waiver of Nonobservance and Modification of a Performance Criterion, and Financing Assurances Review - Press Release; Staff Report; and Statement by the Executive Director for The Gambia
Description: This paper discusses The Gambia’s Fourth Review under the Extended Credit Facility Arrangement, Request for a Waiver of Nonobservance and Modification of a Performance Criterion, and Financing Assurances Review. Despite the various waves of the coronavirus disease 2019 pandemic, the Gambian economy grew by 4.3 percent in 2021 and is expected to grow by 5.6 percent in 2022. Growth is projected to reach 5.6 percent in 2022, predicated on strong remittance inflows, a robust expansion of the construction sector, and large public investment projects. The repercussions of the war in Ukraine intensify inflationary pressures, exacerbate pandemic-related uncertainties, dampen tourism prospects, and disrupt the supply of food and agricultural inputs. The central bank took initial measures to contain inflationary pressures, as inflation reached 11.7 percent at end-April 2022. The authorities remain committed to strong policy measures and structural reforms, including on fiscal management, State-Owned Enterprises, and governance.
June 27, 2022
Iceland: 2022 Article IV Consultation - Press Release; and Staff Report
Description: This 2022 Article IV Consultation discusses that Iceland has weathered recent shocks to the economy relatively well. Well-designed policy measures and a solid health system eased the impact of the pandemic, allowing real gross domestic product and employment to recover strongly. Robust domestic demand and favorable terms of trade boosted output growth to 4.3 percent in 2021, despite slower recovery in tourism. Growth is expected to remain moderate in 2022 and the medium term. Careful policy coordination is required to entrench the recovery, stem risks and rebuild buffers to pre-pandemic levels. Policies should mitigate the flaring-up in inflation, external imbalances, and house prices. Structural reforms should facilitate economic diversification and make the economy more resilient to shocks. Diversification efforts should focus on easing regulatory burdens on start-ups and spurring innovation by leveraging Iceland’s human capital and advanced digital infrastructure. The new collective wage agreement can also foster diversification and resilience through better alignment of wage and productivity growth.
June 27, 2022
Iceland: Selected Issues
Description: This Selected Issues paper on Iceland analyzes housing market risks and housing affordability. House prices in Iceland have increased markedly since the onset of the coronavirus disease-pandemic, with signs that the valuations have exceeded macro fundamentals and long-term trends. Overvaluation has important implications for macroeconomic and financial stability, and housing affordability. House price cycles seem to be closely linked with the business cycle, indicating an amplification risk in the event of price correction. Thus, well calibrated and coordinated policies are crucial to navigate the house price cycle, minimize adverse feedbacks, and reduce affordability risk. IMF’s quantitative analysis examines the interplay between house prices and related factors. The ongoing monetary policy tightening cycle should help address Iceland’s house price pressures. Further macroprudential tightening through binding and effective borrower-based measures could help contain systemic risks and create further buffers in the financial sector. In the medium term, focusing on structural measures that reduce construction costs and increase supply by eliminating red-tape and reducing the period for obtaining building permits is likely to have the highest pay-off.
June 27, 2022
Senegal: Fifth Review Under the Policy Coordination Instrument, Second Reviews Under the Stand-By Arrangement and the Arrangement Under the Standby Credit Facility, and Requests for Augmentation of Access, Waiver of the Nonobservance of a Performance Criterion, and Modification of a Performance Criterion and Quantitative Targets-Press Release; Staff Report; and Statement by the Executive Director for Senegal
Description: This paper presents Senegal’s Fifth Review under the Policy Coordination Instrument, Second Reviews under the Stand-By Arrangement and the Arrangement under the Standby Credit Facility, and Requests for Augmentation of Access, Waiver of the Nonobservance of a Performance Criterion, and Modification of a Performance Criterion and Quantitative Targets. The war in Ukraine and trade sanctions against Mali are having significant spillovers on Senegal. The authorities are taking temporary and targeted measures to support the most vulnerable and to stabilize food prices, while preserving debt sustainability. Rebuilding buffers is critical through an accelerated implementation of the domestic revenue mobilization strategy, prudent debt management, and enhanced spending efficiency, notably by gradually phasing out subsidies and reducing recourse to single source procurement. Program performance was broadly satisfactory. All but one end-December 2021 performance criteria and one of three indicative targets were met. Four out of eight structural benchmarks were implemented on time. Progress is ongoing to finalize the remaining ones.
June 24, 2022
Bulgaria: 2022 Article IV Consultation - Press Release; and Staff Report for Bulgaria
Description: The economy showed resilience through the pandemic, but the war in Ukraine has clouded the outlook, heightened uncertainty, and increased downside risks. With policy support, growth rebounded in 2021 despite the lingering COVID-19 crisis and protracted political uncertainty that hampered investment. Inflation accelerated significantly, pushed by global factors and strong domestic consumption. GDP growth is projected to slow below 3 percent and average inflation to exceed 12 percent in 2022. In this context, policies must navigate difficult trade-offs as they need to support activity, meet needs from the war, and contain inflation, while raising living standards, reducing inequalities, and supporting the green transition.
June 24, 2022
Argentina: First Review Under the Extended Arrangement Under the Extended Fund Facility, Request for Modification of Performance Criteria, and Financing Assurances Review-Press Release; Staff Report; Staff Statement; and Statement by the Executive Director for Argentina
Description: First Review under the Extended Arrangement under the Extended Fund Facility, Request for Modification of Performance Criteria, and Financing Assurances Review
June 22, 2022
Republic of Uzbekistan: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Uzbekistan
Description: Uzbekistan embarked on an ambitious reform path in 2017, starting to liberalize its economy after years of state control. Incomes are still relatively low compared to other emerging economies and the role of the state is still large. Uzbekistan weathered the pandemic relatively well. Strong fundamentals, ample policy buffers, and high gold prices allowed the authorities to take strong actions to mitigate the impact of the pandemic and growth accelerated to 7.4 percent in 2021.