Country Reports
2024
June 14, 2024
Costa Rica: Sixth Review Under the Extended Arrangement Under the Extended Fund Facility, Third Review Under the Resilience and Sustainability Facility Arrangement, and Monetary Policy Consultation Clause
Description: Recent developments and outlook. Growth accelerated to 5.1 percent in 2023 and is projected to remain robust at 4 percent in 2024. Inflation (year-on-year) has stayed negative since mid-2023, triggering Board Consultation under the Monetary Policy Consultation Clause. However, as base effects drop out of the year-on-year calculation, headline inflation is expected to return to the central bank’s tolerance band (2-4 percent) by late 2024. Formal employment, private-sector wages, and poverty are all moving in the right direction.
June 13, 2024
Sri Lanka: 2024 Article IV Consultation and Second Review Under the Extended Fund Facility, Request for Modification of Performance Criterion, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Sri Lanka
Description: Reform efforts are bearing fruit with the economy starting to recover, inflation remaining low, revenue collection improving, and reserves continuing to accumulate. Performance under the program, the design of which benefitted from the 2021 Article IV recommendations, has been strong. Nevertheless, the economy is still vulnerable and the path to debt sustainability remains knife-edge. Sri Lanka faces considerable uncertainties associated with the upcoming presidential elections and ongoing debt restructuring. Sustaining the reform momentum is critical to safeguarding the hard-earned gains and ensuring Sri Lanka can emerge from one of its most severe economic crises.
June 13, 2024
Bulgaria: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Bulgaria
Description: For two years in 2021–23, a political stalemate hampered policymaking as Bulgaria needed to stir the exit from the pandemic, cope with the global inflation shock and the fallout of Russia’s war in Ukraine, secure its energy supply, implement reforms to unlock EU Funds, and prepare for euro adoption. The government formed in June 2023 prioritized euro and Schengen areas accession, NGEU funds delivery, and judicial reforms. It fell in March 2024, increasing the risk of delays in key policy decisions. Despite the succession of international and domestic shocks, the economy showed resilience and can achieve a soft landing if inflation decelerates towards 2 percent as expected under the baseline. Moreover, longstanding intertwined challenges remain: convergence toward EU average income is lagging peers, investment is low, perception of corruption is large, inequality is high, poverty is widespread, the population is shrinking, and the growth model still relies largely on brown energy.
June 10, 2024
Republic of Fiji: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Fiji
Description: The Fijian economy has recovered strongly from the pandemic. Real GDP rebounded by around 30 percent cumulatively in 2022–23, surpassing pre-pandemic levels. Inflation has recently ticked up modestly largely due to a temporary effect of the hike in Value-Added Tax rates. Supported by the economic recovery, the fiscal deficit and debt-to-GDP ratios continued to decline but remain at elevated levels. The FY2024 (August–July) budget included significant revenue enhancing measures, partially offset by spending increases, which, on balance, are expected to reduce the fiscal deficit and debt ratios. The monetary policy stance has remained accommodative, although the Reserve Bank of Fiji has begun tightening liquidity. The banking sector is sound overall, and asset quality is improving (although still lower than pre-pandemic levels). The coalition government is developing a program of growth-enhancing reforms, particularly in the National Development Plan due in June.
June 10, 2024
Republic of South Sudan: 2023 Article IV Consultation, and First and Second Reviews under the Staff-Monitored Program with Board Involvement-Press Release; Staff Report; and Statement by the Executive Director for Republic of South Sudan
Description: South Sudan is a very fragile post-conflict country, and one of the most vulnerable in the world to climate change effects. The spillovers from the fighting in Sudan have exacerbated an already dire humanitarian situation. Two-thirds of South Sudan’s population was exposed to acute food insecurity prior to the outbreak of the conflict in Sudan and the situation has worsened due to a large and growing number of refugees, and a sharp increase in fuel and food prices in the border areas with Sudan driven by trade disruptions. The Sudan war has also delayed the needed repair of the pipeline that transports South Sudan’s crude oil to international markets through Sudan. As a result, oil exports have since mid-February 2024 collapsed to about one-third of their previous level. This has increased significantly the fiscal financing and balance of payments gaps given that oil exports account for nearly 90 percent of fiscal revenues and 95 percent of exports. National elections, the first-ever since South Sudan’s independence in 2011, are scheduled for December 2024. However, due to delays in and operationalizing key election-related institutions development partners have expressed skepticism that free and fair elections will be feasible by the envisaged date.
June 10, 2024
Somalia: Staff Report for the First Review Under the Extended Credit Facility Arrangement, and Requests for Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Somalia
Description: Economic activity has picked up in recent months, supported by a rebound in agriculture, though still affected by the lingering effects of two years of drought and recent severe flooding. The security situation remains challenging, with the government scaling up its military actions against the Al-Shabab terrorist group, amid the planned withdrawal of the African Union Transition Mission in Somalia (ATMIS) by end-December 2024. Despite these significant challenges, the authorities remain committed to the reform effort, leveraging the benefits of the HIPC Completion Point achieved in December 2023.
June 7, 2024
Luxembourg: Financial Sector Assessment Program-Financial System Stability Assessment
Description: The assessment of Luxembourg’s large, interconnected, and complex financial system took place against heightened economic, financial, and geopolitical uncertainty. Investment funds have grown since the 2017 FSAP, while their connections to other funds, banks, nonbank financial intermediaries, and foreign entities have also increased. Domestic banks face risks from the ongoing downturn in credit and house price cycles, especially in the high-risk mortgage segment. Securities portfolios in large banks are mostly held-to-maturity and spread across euro area issuers. The banking sector maintains higher capital ratios than euro area peers, has low but rising nonperforming loans, and benefits from support to the economy from a AAA-rated sovereign.
June 7, 2024
Luxembourg: 2024 Article IV Consultation-Press Release; and Staff Report; and Statement by the Executive Director for Luxembourg
Description: The new government took office in November 2023 and key plans include lowering taxation to boost purchasing power and competitiveness. A financial sector assessment program (FSAP) concluded together with the Article IV in March 2024.