Country Reports
2024
May 24, 2024
Georgia: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Georgia
Description: Georgia’s economic performance remains robust. Growth has moderated from double digits but remains high, inflation is low, and fiscal and financial buffers are healthy. EU candidate status has boosted sentiment, but the global environment remains highly uncertain due to ongoing conflicts and shifting geo-economic patterns. Georgia should continue to strengthen its resilience to adverse shocks by maintaining prudent macroeconomic policies and boost its growth potential by addressing long-standing structural challenges, capitalizing on new economic opportunities, and making decisive progress towards EU accession.
May 21, 2024
Peru: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Peru
Description: The economy is recovering after consecutive climate-related shocks as well as social turmoil at the beginning of 2023. Inflation has receded due to the central bank’s decisive monetary policy tightening, while the fiscal position and financial system remain strong. The country is in a period of relative political stability, but lingering political uncertainty is denting the appetite for the reforms needed to boost potential growth.
May 20, 2024
Guinea-Bissau: Fourth and Fifth Reviews Under the Extended Credit Facility Arrangement and Requests For Rephasing of Access, Waiver of Nonobservance of Performance Criteria, Modification of Performance Criteria, and Financing Assurances Review
Description: A political crisis in December 2023 resulted in another change in the government. In December 2023, the former Minister of Finance and Secretary of State of Treasury from the opposition-led government were arrested over corruption charges related to settlement of cross-arrears and NPLs of the large and undercapitalized bank. This led to a deadly shootout between the National and Presidential Guards. The President considered this event as a coup attempt, dismissed the opposition-led government, dissolved Parliament elected in June 2023, and appointed the new government in December 2023. The new legislative election is planned for the last quarter of 2024 and the presidential election for 2025. The new government has restored the strong program commitments. During the four-month tenure, the previous government demonstrated weaker reform orientation, which caused significant policy slippages and delayed the program implementation. As prior actions, the new government is implementing strong corrective actions to keep on track with the fiscal consolidation path, reduce public debt, and achieve the program objectives.
May 17, 2024
Guinea: Selected Issues
Description: This Selected Issues paper examines the potential medium and long-term effects of the Simandou iron ore project on Guinea’s economy and income distribution. The paper uses two complementary macroeconomic models. If production began in 2025, the level of real gross domestic product would be around 26 percent by 2030 compared to a baseline scenario without the project. The project would induce a currency appreciation of around 3 percent in 2025 and 2 percent in 2030. It would lead to an increase in employment, but the positive impact on private consumption and inequality could be limited without active policies. Different policy scenarios suggest that spending the potential tax revenues on education and infrastructure results in higher growth and stronger poverty reduction. Results show that the investment of tax revenues in infrastructure and education would foster the positive impact of the project on growth and poverty reduction.
May 17, 2024
Guinea: 2024 Article IV Consultation and Request for Disbursement Under the Rapid Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for Guinea
Description: On December 18, 2023, the explosion of a major fuel import and storage facility led to fuel shortages and new urgent financing needs. The blast caused 25 deaths and 457 injured as well as widespread fuel shortages, affecting transportation and economic activity. The relatively strong mining sector is sustaining growth, although growth is expected to decelerate to 4.1 percent in 2024, lower than the 2019-23 average of 5.1 percent. Average inflation is expected to increase to 11 percent in 2024 as fuel shortages pushed up prices. Socio-political tensions persist in the wake of the military coup of September 2021 and the hardship caused by the explosion.
May 16, 2024
Iraq: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Iraq
Description: The 2024 Article IV Consultation highlights that domestic stability has improved since the new government took office in October 2022, facilitating the passage of Iraq’s first three-year budget, which entailed a large fiscal expansion starting in 2023. The ongoing fiscal expansion is expected to boost growth in 2024, at the expense of a further deterioration of fiscal and external accounts and Iraq’s vulnerability to oil price fluctuations. Without policy adjustment, the risk of medium-term sovereign debt stress is high and external stability risks could emerge. Key downside risks include much lower oil prices or a spread of the conflict in Gaza and Israel. A fiscal adjustment is needed to stabilize debt over the medium term while protecting critical social and capital spending. Large savings can be attained from containing the outsized public wage bill and policy measures aimed at mobilizing additional non-oil revenues. Private sector development and economic diversification are crucial to ensure long-term external sustainability and foster private job creation.
May 15, 2024
St. Kitts and Nevis: 2024 Article IV Consultation-Press Release and Staff Report
Description: The 2024 Article IV Consultation with St. Kitts and Nevis discusses that despite a continued strong tourism performance, growth fell to 3.4 percent in 2023 due to delays in public and private sector investment projects. The economic outlook is positive thanks to the renewable energy projects that would significantly reshape the economy. A privately funded utility-scale solar and battery storage project is expected to be completed in 2025 and a geothermal project in Nevis is at the planning stage. Debt and cash management could be improved and the social security fund requires urgent reform. Maintaining a large amount of short-term debt can be costly, particularly when fiscal buffers are available. The 2023 external position is assessed to be weaker than the level implied by medium-term fundamentals and desirable policies. The current account deficit is projected to fall to over the medium term supported by lower fossil fuel imports. International reserves are adequate.
May 15, 2024
St. Kitts and Nevis: Selected Issues
Description: This Selected Issues paper on St. Kitts and Nevis studies economic benefits from energy transition. Cheaper and more stable energy prices can support macroeconomic stability. In addition to the aforementioned effects, low and stable energy prices can mitigate the adverse impact from terms-of-trade shocks and reduce inflation volatility, thus contributing to smoothing out economic cycles. The energy landscape of St. Kitts and Nevis calls for energy reform. The two islands of St. Kitts and Nevis rely heavily on fossil fuels, primarily diesel, to power their grids without Interconnection. The analysis uses cross-country examples to examine the channels through which the adoption of renewable energy on a large scale can yield numerous long-term economic benefits. Transitioning to domestic renewable energy sources could stabilize domestic energy prices and reduce the volatility of inflation. A sharp reduction in energy costs in St. Kitts and Nevis could promote sectoral diversification. High-energy costs can prohibit economic diversification, particularly into energy intensive industries.