Mission Concluding Statement 

3. High economic growth in 1380 and the first quarter of 1381 took place in an environment of declining inflation and improved external position against the background of sustained economic reforms. This performance has been facilitated by the authorities' policy to use the increased oil revenue to reduce the external debt, build international reserves, accumulate savings in an Oil Stabilization Fund (OSF), and reduce trade and foreign exchange restrictions. Nonetheless, policymakers are faced with important challenges in the short term and the medium term. The short term ones are emanating from the expansionary fiscal policy in 1381 and high liquidity growth that poses serious risks of increasing the rate of inflation and undermining the competitiveness of the Iranian economy through a real appreciation of the exchange rate. The medium-term challenges relate to the need to deepen and accelerate structural reforms to sustain high growth rates, diversify the economy away from oil, and enhance employment creation. After a brief review of developments in 1380 and the outlook for 1381, the rest of this statement elaborates on these policy challenges and the need for timely corrective actions and sustained reforms.

II. Economic Developments in 1380 and Outlook for 1381

4. Overall economic activity in 1380 remained strong for the second consecutive year, with real GDP growing by 4.8 percent despite lower oil production that resulted from downward revisions in OPEC quotas (Tables 1-2). Performance of the non-oil sector was strong (6 percent growth) and broad based, and was driven by higher domestic demand and improved confidence following progress in trade reform and the removal of foreign exchange constraints that impeded economic activity in previous years. Manufacturing, construction, trade, and to a lesser extent agriculture grew at a rapid rate. Employment creation, however, grew at a low rate (3 percent), probably reflecting the existing excess capacity in some key sectors. The unemployment rate in urban and rural areas as reported by the Central Statistics Office remained at 16 percent in 1380. Average CPI inflation continued its downward trend and reached 10.3 percent compared to 11.7 percent in the previous year. The decline was driven mainly by lower inflation in food prices, due to favorable weather conditions, and in other tradable goods (clothing, footwear, and household goods). Conversely, inflation in nontradables, such as housing and recreation, continued to be relatively high.

5. Fiscal policy was relatively prudent in 1380. Despite the decline in oil revenue, the fiscal position remained in surplus, albeit lower than during the previous year (Table 3). Non-oil revenue was broadly in line with economic growth and total expenditure rose by about 5 percent in real terms, with growth in current expenditure more than offsetting the decline in capital outlays. The authorities continued to take advantage of the sustained high oil revenue to accumulate fiscal savings in the OSF.

6. Reflecting trade balance developments, Iran's current account surplus declined to 4.8 percent of GDP, from 13.4 percent in 1379, owing to lower oil and gas exports, as well as a 20 percent increase in imports (Table 2). Non-oil export receipts, however, rose by close to 5 percent, due mainly to rapid growth in exports of chemicals and petrochemicals. The capital and financial account continued to be in deficit, albeit lower than in the previous year, reflecting a significant reduction in debt repayments and a sharp rise in capital inflows comprising buybacks and oil prefinancing. The surplus in the overall balance was US$4.9 billion and, consequently, gross official reserves, incorporating the US$7.4 billion in the OSF, were equivalent to 9.7 months of imports of goods and services.

7. Monetary developments continued to reflect a buildup of foreign exchange reserves, excluding the OSF, and a rapid expansion of credit to public enterprises and the private sector. Despite efforts by the central bank of Iran (Bank Markazi Jomhouri Islami Iran (BMJII)) to mop up excess liquidity by reducing its lending to commercial banks and issuing Central Bank Participation Papers (CPPs), broad money (M2) grew by 26 percent, following a 30 percent rise in the previous year (Table 4). Such liquidity expansion was aided by an increase in the money multiplier due to the decline in average reserve requirements by 5 percentage points and the reduction in the import deposit requirement to 10 percent. The exchange rate of the Iranian rial against the U.S. dollar was relatively stable at the Tehran Stock Exchange (TSE), but remained under pressure to appreciate. At the same time, the real effective exchange rate appreciated by about 16 percent, following an 18 percent appreciation in 1379. The exchange rate premium in the parallel market in Dubai remained at less than 1 percent throughout the year.

8. The growth outlook for 1381 is relatively favorable, but the expansionary policy stance could lead to higher inflation and put pressure on the real exchange rate to appreciate. Buoyed by relatively favorable oil market conditions and rising domestic demand, real GDP growth is projected at about 5.8 percent (Table 1). While oil output is likely to decline slightly compared to the previous year, growth in non-oil activities will accelerate to 6.3 percent, underpinned by strong public sector demand, increased business confidence, and gains in household disposable income. Agricultural output would continue its recovery from the drought conditions of previous years, and construction and manufacturing activities are expected to expand at high growth rates in line with the sharp increase in investment and consumer demand.

9. The fiscal position is expected to deteriorate significantly (Table 3) owing to the expansionary expenditure stance of the 1381 budget, and the cost of the exchange rate unification (see below). The external current account surplus is estimated to decline to the equivalent of 1.5 percent of GDP on the account of a further sharp rise in imports, spurred by a robust growth in domestic demand. Exports of oil and gas, however, are expected to increase by almost 3 percent. A surplus in the capital and financial account is projected owing to higher inflows related to the Eurobond (€500 million), oil prefinancing, buyback operations, and the continuing decline in debt amortization payments. Reflecting somewhat higher net external borrowing, Iran's outstanding external debt is projected to slightly increase in 1381 to US$7.3 billion, or 6.9 percent of GDP, but the debt service would continue to decline to about 4 percent of exports of goods and services. Official international reserves are projected to rise to about US$20.2 billion, equivalent to 9 months of imports. Monetary growth is estimated to reach about 40 percent in the absence of corrective fiscal measures. This, in turn, would heighten uncertainty about inflation, with the balance of risk on the upside.

III. Policy Issues

A. Demand management policies

10. The mission believes that the policy focus for the remainder of 1381 must shift toward ensuring a stable macroeconomic framework, by containing the fiscal deterioration, reducing inflation, introducing effective coordination of fiscal and monetary policies, and ensuring credibility of the recently introduced managed floating exchange rate regime.

11. Fiscal policy. Preliminary estimates based on the current budget suggest that the fiscal position would swing from a surplus of 1 percent of GDP in 1380 to an overall deficit of 5.9 percent of GDP. The non-oil deficit is estimated to deteriorate by 6.6 percent of GDP to the equivalent of 21 percent of GDP, driven by the impact of the exchange rate unification, the large increase in budgetary outlays, and a revenue shortfall compared to the budget estimates.

12. With regard to the effect of the exchange rate unification, the authorities prepared the current budget based on their decision to make all the implicit exchange rate subsidies explicit with no pass-through effect of the exchange rate depreciation; and bear the full cost of the exchange rate losses on letters of credits and other foreign liabilities (contingent liabilities) of the public enterprises. The budgetary cost of these actions amounts to about 6 percent of GDP, which is partially offset by the higher valuation of oil revenue, equivalent to 3 percent of GDP.¹

13. The budget also calls for a sizable increases in other outlays of 5.2 percent of GDP, including capital expenditure, wages and salaries, and subsidies and transfers. Moreover, there are large extrabudgetary expenditures which are estimated to increase by 0.6 percent of GDP.

14. Such an expansionary fiscal policy would intensify domestic demand pressures, leading to higher growth in domestic liquidity, and real exchange rate appreciation. In addition, the granting of tax exemptions and the increase in current expenditure, such as the wage bill will increase the vulnerability of fiscal management to oil price fluctuations, given the difficulty to reduce these outlays during a downturn in oil prices. In the same vein, the planned withdrawal of resources from the OSF to finance the fiscal deficit in the face of abundant oil revenue would defeat the OSF's purpose and undermine its credibility.

15. The mission notes that the authorities are exploring appropriate measures to contain the fiscal deterioration and its impact on monetary and exchange rate policies. The mission has not had the opportunity to discuss in detail with the Iranian authorities possible adjustment measures that could be introduced in the period ahead. It would suggest, however, that such measures include a reduction in current expenditures, which have been budgeted to rise significantly, ensure an orderly scaling-down of capital expenditure and preserve the integrity of the OSF by not withdrawing from past accumulated deposits. The latter would be facilitated by the adjustment measures and the fact that oil revenues accruing this year to the OSF are expected to be higher than foreseen at the time of the budget preparation.

16. Possible revenue-raising measures could include the reduction of tax exemptions and stepped-up collection of tax arrears. The authorities could also consider raising excise taxes, in particular, the specific rates that have not been adjusted for inflation for some years, or excise tax rates on domestic goods to the level imposed on their imported counterparts. Moreover, an acceleration of privatization and divestiture of government equity shares would help mobilize significant resources.

17. Monetary policy is confronted with a complex setting in 1381, marked by excess liquidity in the banking system, a relaxation of fiscal discipline, pressures on the exchange rate to appreciate, inadequate instruments of liquidity management, and, until recently, limited policy coordination. On the upside, however, the exchange rate unification has enhanced confidence and inflationary expectations seem to have abated, notwithstanding the rise in the price inflation of nontradables.² As such, monetary policy alone cannot contain the liquidity and inflationary effects of a deterioration in the fiscal stance in 2002/03, nor would it be sufficient to prevent a further appreciation of the real exchange rate. A policy mix of fiscal adjustment and monetary policy actions to mop up excess liquidity would be essential to bring domestic liquidity growth under control.

18. The mission has prepared an illustrative scenario based on the assumption of fiscal adjustment, aimed at containing M2 growth to 20-25 percent. Under such a scenario, a reduction in the fiscal deficit to 2.8 percent of GDP would reduce the budgetary recourse to domestic bank financing to about Rls 12.3 trillion.³ Depending on the balance-of-payments outlook, the mission estimates that the central bank may have to buy up to US$5.2 billion of foreign exchange directly from the government on its own account to avoid an undue appreciation of the nominal exchange rate. The impact of this operation on base money would be Rls 42 trillion. To mop up the resulting excess liquidity, the BMJII would need to increase the stock of CPPs to Rls 34 trillion. This would contain M2 growth to 20-25 percent and would help to maintain inflation at about 12 percent.

19. The mission notes that the authorities are examining the possibility of increased recourse to CPPs and possibly other instruments (open deposit accounts) to mop up excess liquidity and sterilize the liquidity impact of the central bank's direct purchase of government oil revenue. However, even if the legal ceiling on the issuance of CPPs can be raised, this instrument should not be considered as a substitute for fiscal adjustment, but rather as a temporary instrument providing some time for fiscal policy to adjust.

20. Exchange rate policy. The trend of real exchange rate appreciation continued in 1380 and the first quarter of 1381, as the TSE rate and subsequently the exchange rate prevailing at the interbank market remained very stable at around Rls 7,920 per U.S. dollar, while the year-on-year CPI inflation rate averaged at about 11 percent. The stability of the exchange rate and higher import penetration have brought the inflation of tradables to single digit levels, while buoyant domestic demand has put pressure on nontradables prices, particularly of real estate. The stable exchange rate has also enhanced predictability, which is important as economic agents in Iran have no access to financial instruments to hedge themselves against exchange rate risk. On the downside, a sustained real exchange rate appreciation is likely to impair the development of the non-oil export sector in the period ahead, by harming export competitiveness and attracting a disproportionate share of investment to the nontradables sector.

21. The authorities have reiterated their commitment to a managed floating exchange rate system, while recognizing the merits of nominal rate stability in the short run to ensure a smooth transition to the new unified interbank market rate. They were confident that the market's response was very much in favor of some stability in the rate in the short run and that no evidence of misalignment of the nominal exchange rate had emerged. However, they were mindful of the need to avoid a further real appreciation, and when conditions are appropriate, they would ensure that the nominal effective exchange rate depreciates, guided by inflation differentials.

22. While agreeing that the above approach is sensible in the interest of ensuring stability during the initial phase of the exchange rate unification, the mission cautioned against the risk of building expectations of a de facto pegged rate, which would make subsequent exchange rate movements politically difficult. Moreover, the perceived fixity of the nominal exchange rate may have contributed to attract potentially volatile capital inflows. The central bank would need to move sooner rather than later to ensure that the exchange rate at the interbank market fluctuates as warranted by market conditions and economic fundamentals. Under current circumstances, however, the large supply of foreign exchange to the domestic market on account of high government financing requirements and a high share of spending out of oil revenue would likely prevent any sizable nominal depreciation during 1381.

23. Coordination of fiscal and monetary policies. The mission welcomes the recent establishment of a high-level committee to coordinate macroeconomic policy and the arrangements in place to enhance such a coordination both at the policymaking and operational levels. Efforts in that direction would need to ensure that policy adaptations during the course of the fiscal year can be made with the needed agility and effectiveness. In the same spirit, the mission suggests that preparation of the budget for 2003/04 be cast in a framework encompassing the key aspects of macroeconomic policies and management; such a framework would be reviewed in the course of the fiscal year and adjusted in a coordinated manner as warranted by domestic and external developments. It would also provide the basis for concerted policy actions in several areas as needed.

B. Medium-Term Outlook and Reforms

24. Iran's medium-term outlook for the remainder of the Third Five Year Development Plan (TFYDP) is relatively favorable under current oil prices projections and the assumption that the fiscal expansion would be corrected in a timely manner. Taking into account the authorities' objective of achieving a real GDP growth rate of 5 percent on average during the remainder of the TFYDP, the overall external position would be in surplus, albeit on a declining trend, the external debt would remain low, and international reserves would be maintained at a comfortable position. Achieving the targeted real GDP growth and increasing employment would be subject to uncertainties on several fronts, including oil prices, weather conditions, the pace of implementation of structural reforms, and the prospects for regional stability. To enhance the medium-term prospects, adequate fiscal adjustment would need to be phased in during the current year and in 1382 (Tables 3-4).

25. The mission commends the authorities for the high degree of ownership of their economic reforms and the progress achieved in implementing their reform strategy as outlined in the TFYDP, including the exchange rate unification; the passage of the foreign direct investment law aimed at enhancing the transparency of foreign investment procedures; the reform of direct taxation; and the licensing of private banks. The mission and the authorities agree that the reform effort must be deepened to yield tangible results in terms of sustained growth and employment creation. The current favorable situation should not lead to complacency in fiscal discipline or a relaxation of the reform effort. On the contrary, structural reforms must be accelerated at a time when they can add credibility and synergy to the whole reform process and when there are resources to cover their social cost. In particular, the reform process must now focus on achieving greater openness of the economy by further liberalizing trade, eliminating the remaining exchange restrictions, attracting foreign direct investment, and preparing the groundwork for opening up the capital account. In parallel, fiscal management would need to be enhanced to allow for the buildup of financial savings and a balanced intergenerational sharing of resources. Also, the domestic price setting system must be overhauled, the financial sector reformed, and government state enterprises restructured or privatized.

26. Employment creation. Pressure on the labor market might remain severe in the next few years, owing to Iran's demographic dynamics and the relatively weak employment content of growth compared to other countries. Over the last three years, the labor force grew by about 3.5 percent per year, with close to 600,000 newcomers to the job market each year. On the supply side, employment creation has been around 450,000 per year on average, resulting in a rise in unemployment to 16 percent in 1380. The relatively weak employment content of growth stems from several factors, including the excess labor in many public enterprises, the low energy cost and subsidies which introduce a bias in favor of capital intensive activities, the highly restrictive labor market regulations, and the lack of competition.

27. Various initiatives have been introduced recently by the authorities to promote employment creation, including the provision of subsidized credits to small- and medium-sized enterprises and tax exemptions on the salaries of new employees. In addition, lending in foreign exchange from the OSF has been made available to private companies to help create jobs. The mission is of the view that while financial incentives to create new jobs may help alleviate unemployment problems in the short run, their effectiveness and possible distortive effects would need to be assessed after a short period of implementation. As outlined below, sustained implementation of structural reforms aimed at opening up the economy, attracting foreign direct investment, enhancing competition, and eliminating labor market rigidities would foster growth and help alleviate the unemployment problem in Iran. The mission encourages the authorities to step up the efforts underway to reform the labor law and provide a regulatory environment conducive to job creation.

28. Trade reform and elimination of exchange restrictions. Building on the progress achieved in 1380 in reducing nontariff barriers and replacing them with tariffs, the authorities have streamlined licensing procedures, with the bulk of import items now requiring only licensing at the ministry of commerce for recording purposes, and adopted a negative list of prohibited imports.⁴ In addition, following the exchange rate unification, tariff rates (customs duties and the commercial benefit tax), as well as the other duties and charges on imports which were valued for customs purposes at the official rate of Rls 1,750 were reduced in most cases proportionately to the change in the exchange rate, resulting in a simple average customs duty rate of 1 percent and a commercial benefit tax on imports of about 26 percent.

29. While these steps have significantly improved the foreign trade regime in Iran, restrictive elements remain. In particular, the combined simple average tariff rate of about 27 percent is relatively high and there are numerous other duties and charges on imports and exports. The commercial benefit tax has some 61 tariff rates, mostly ranging from 0 to 116 percent, with few even higher rates. The authorities are aware of the need to rationalize the tariff structure (including consolidating all duties and charges on imports into the tariff structure), reducing the dispersion of tariff bands, and lowering the simple average tariff rate. They intend, however, to move with caution in this area in line with the need to carefully assess the impact on domestic activities of the reforms already introduced and provide adequate time for some sectors to adjust to increased competition from abroad. While sharing this view, the mission underscores the need to set specific trade reform targets to be attained by the end of the TFYDP, including rationalizing the tariffs, lowering the average rate, reducing the number of tariff bands to say about 3-4, and eliminating the remaining discretionary tariff exemptions. Also, the negative list for imports should cover only prohibitions for national security, public health, and public morals, and not for protection. The remaining quantitative restrictions and nontariff barriers, such as import monopolies, and export restrictions, would need to be eliminated as soon as possible and, where relevant, after phasing out price controls and subsidies. Finally, to be effective, the trade reform must be accompanied by a streamlining of customs and administrative procedures.

30. The authorities remain committed to eliminating all remaining exchange restrictions and accepting the obligations of Article VIII, Sections 2a and 3 of the IMF's Articles of Agreement by the end of the current Iranian year (March 20, 2003). An IMF technical assistance mission has recently reviewed the remaining exchange restrictions and discussed with the authorities a timetable for their elimination. The mission encourages the authorities to follow up on the recommendations of the technical assistance mission in time for the acceptance of the obligations of Article VIII by the end of this fiscal year.

31. Medium-term fiscal reform strategy. The mission welcomes the progress achieved in the reform of direct taxes, including the reduction in the tax rates and the streamlining of tax brackets. These would significantly improve the efficiency and the transparency of the tax system. The mission also notes that the value-added tax (VAT) law has been submitted to the cabinet for approval and calls for steadfast efforts to approve it and accelerate implementation of the organizational reforms approved by the parliament in June 2001, including the establishment of the National Tax Organization (NTO) and a large taxpayer unit. The mission welcomes the elimination of tax exemptions for public enterprises and Bonyads and the authorities' intention to step up efforts to collect tax arrears. More generally, it advises against excessive recourse to tax incentives and privileges as instruments of industrial and social policy. Most prominently, reinvested profits are now fully exempted for all companies; and temporary tax holidays are extended to newly established businesses for some selected industries. Such exemptions might undermine the authorities' efforts to broaden and diversify the revenue base away from oil revenue. Similarly, exemptions from the proposed VAT would need to be kept to a minimum to facilitate the implementation of the new tax and avoid distortions. The mission will follow up on the authorities' interest in receiving IMF technical assistance to strengthen the administrative capabilities of the NTO.

32. On the expenditure side, the mission calls for determined efforts to contain the growth of wages and salaries, including through a civil service reform, and encourages the authorities to enhance public expenditure management, including with technical assistance from the IMF and the World Bank. The authorities would need to firm up their plans to phase out subsidies and replace them with a targeted subsidy system and a social safety net that would provide adequate protection of the vulnerable groups of the population. In the meantime, consideration could be given to introducing in the near future interim price adjustments on selected commodities, including on energy products, while awaiting for the comprehensive subsidy reform to be put in place.

33. The establishment of the OSF last year was an important step toward enhancing the resilience of fiscal policy and insulating it from the fluctuations in oil prices. Building on this progress, the authorities would need to reflect on the merits of setting fiscal policy in a medium-term framework that would seek to limit current consumption out of oil resources to ensure balanced intergenerational sharing of resources. In this respect, fiscal sustainability would be framed on the basis of estimates of a notional permanent income that takes into account the nonrenewable nature of oil resources and the need to build assets for future generations. As such, fiscal policy would need to focus on reducing the non-oil deficit to a level that would be compatible with the desired accumulation of long-term savings and precautionary assets. As a first step in that direction, consideration could be given to transforming the OSF in the near future into a long-term saving fund with stringent and transparent rules of accumulation and withdrawals.

34. A recent IMF technical assistance mission has reviewed the practices of transparency and observance of standards and codes (Reports on the Observance of Standards and Codes (ROSC)) in the fiscal area in Iran. The preliminary conclusions of the fiscal ROSC mission highlight a number of positive elements. In particular, quasi-fiscal operations are increasingly being recognized; the audit framework for the public sector is based on a solid legal framework; and fiscal reports are disseminated in the media. Improvements, however, are needed in three main areas: (a) the government's involvement in the economy would need to be more fully disclosed, including by clarifying financial relationships within the enlarged public sector; (b) the quality of fiscal information could be upgraded by widening its coverage and enhancing the timeliness of budget reporting; and (c) the budget process would need to be strengthened, including by rationalizing banking operations of the government and integrating extrabudgetary funds in the budget process. The mission encourages the authorities to follow up on the recommendations of the technical assistance mission and consider publishing the ROSC report.

35. Financial sector reform. A key element of the authorities' medium-term plan to reform the financial sector has been the licensing of three private banks, one of which was already operating as a nonbank credit institution. Also, legislation to allow private banks to operate in the Free Trade Zones was passed in 1380. The private banks are allowed to conduct business in all banking areas and will operate under the same regulatory framework. They have been allowed more flexibility in credit allocation and in the setting of deposit and lending rates, which would enhance competition and open the door for granting the same flexibility to state banks. Efforts aimed at strengthening bank supervision and prudential regulations along the lines recommended by IMF technical assistance missions have continued, including recapitalization of state-owned banks and streamlining of prudential regulations. The Article IV mission is encouraged to learn that the authorities have formulated an overall action plan for fundamental banking supervision reform and some specific regulations on net foreign exchange open positions of banks, asset classification, provisioning, large exposures, and licensing, which all have already been approved by the Monetary and Credit Council and issued to banks. Also, draft legislation on anti-money laundering has been approved by the cabinet. However, as was originally reported in the March 2001 IMF technical assistance report, progress in raising the level of compliance with the Basle Core Principles has remained slow.

36. The reform of the capital market has also been slow. In the absence of a general securities law which would govern the issue of securities both inside and outside of the stock exchange, it remains difficult to address weaknesses in the stock exchange in areas such as insider trading, lack of protection of minority shareholders' rights, unregulated activities of the investment companies, and the low level of disclosure of listed companies. While by-laws have been issued to address some of these concerns, a comprehensive approach to reforming the capital market is urgently needed.

37. The mission reiterates the need to develop policy instruments that would provide the central bank with sufficient flexibility and agility in its conduct of monetary policy. The CPPs have provided a useful tool to mop up excess liquidity in the past year, but need some adaptation to be effectively used for open money market-type operations. Previous IMF technical assistance missions had advised the authorities to auction the CPPs to derive a benchmark rate of return and remove restrictions on their secondary market trading. Moreover, the mission underscores the need for rapid progress on other financial sector reforms, including eliminating the restrictions on deposit rates, allowing banks more freedom in setting the lending rates, and establishing an interbank money market. An important initiative currently under consideration is the establishment of an agency fee (Hak-Al-Wakala) as part of the rate of return, which could induce more flexibility in the setting of the rates of return.

38. Privatization. Progress in privatization has been limited. While the legislative and regulatory environment governing privatization has been streamlined and clarified, privatization operations have mostly consisted of sales of government equity shares to private investors, Bonyads, and even to public entities such as the social security, without transfer of majority control to the private sector. The mission underscores the need to set up more ambitious privatization targets with a clear objective of disengaging the government from key activities that can be carried out more efficiently by the private sector, such as telecommunication, transportation, insurance, tourism activities, and other services. If announced to the public, these objectives could add to the credibility of the privatization effort and help attract foreign direct investment. The mission suggests that consideration be given to depositing in the OSF the part of the privatization proceeds allocated to the budget, which could then be reinvested in long-term financial assets for future generations.

IV. Other Issues

39. Statistical issues. The mission commends the authorities for their commitment to improving Iran's statistical base as evidenced by their intention to subscribe to the Special Data Dissemination Standard. To this effect, a multisector mission from the IMF's Statistics Department (STA) visited Iran during June 18-July 1, 2002 to assess the current data dissemination practices and provide technical assistance on ways to improve the compilation and dissemination of macroeconomic statistics. The mission welcomes the authorities' intention to follow up, within the suggested timeframe, on the action plan recommended by the STA technical assistance mission.

40. The mission reiterated the readiness of the IMF to continue to support the authorities' reform effort through technical assistance and policy advice.