Country Reports
2024
November 25, 2024
Morocco: Second Review Under The Arrangement Under the Resilience and Sustainability Facility-Press Release; Staff Report; and Statement by the Executive Director for Morocco
Description: While agricultural output suffers from yet another drought, non-agricultural output has remained robust, and domestic demand is strengthening. Nonetheless, unemployment has increased. Inflationary pressures have abated, allowing BAM to cut the policy rate in June 2024. The fiscal deficit is on track to meet the 2024 budget target, with stronger-than-expected revenues offset by increased current spending. Strong revenues from tourism, exports of goods, and remittances have kept the current account deficit to low levels. Morocco continues to make progress in bolstering its resilience against climate change and seizing the opportunities from decarbonization, under the RSF arrangement. Significant investments in water infrastructure aim at addressing water scarcity and will need to be complemented by demand management reforms. Continued progress toward liberalizing the electricity markets, a key dimension of the RSF, is needed to boost private sector participation in renewable energies (RE). This will not only help Morocco achieve its NDC targets but would also reduce its reliance on imported fuels, improve firms’ competitiveness, and help create jobs.
November 25, 2024
Tonga: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Tonga
Description: Tonga’s economic activity has strengthened, bolstered by consistent remittance flows, continued tourism recovery, and robust construction activities, despite a fall in agricultural output. The potential for a stronger recovery has, however, been hindered by supply-side constraints including labor shortages. Inflationary pressures have eased, and headline inflation is falling below the 5 percent reference rate of the National Reserve Bank of Tonga (NRBT), mainly driven by the moderation of global goods and commodity prices. The elevated frequency of natural disasters, limited economies of scale, and geographical remoteness collectively temper medium-term growth. Localized risks are emerging in the banking sector.
November 22, 2024
Sierra Leone: Poverty Reduction and Growth Strategy
Description: The Government of Sierra Leone (GoSL) has launched a new Medium-Term National Development Plan (MTNDP). Unlike the previous plans that were implemented for five years, the new plan will be executed for a period of seven years spanning 2024-2030, in order to be fully aligned with the remaining period of implementation of the United Nations 2030 Agenda for Sustainable Development, summarised in the 17 Sustainable Development Goals (SDGs). The current plan is highly strategic and prioritised, drawing from crucial lessons learned in the implementation of the previous plan, the MTNDP 2019-2023. The new plan is focused on the Government’s Big Five Game Changers that constitute the country’s overarching agenda for 2030 and give strategic direction to the plan.
November 22, 2024
Sierra Leone: 2024 Article IV Consultation and Request for a 38-Month Arrangement Under the Extended Credit Facility-Press Release; Staff Report; Staff Statement; and Statement by the Executive Director for Sierra Leone
Description: Political and social stability have been tested by a cost-of-living crisis, a coup attempt, and allegations of electoral fraud. To help maintain calm, the ruling coalition and the opposition released a joint statement promoting a constructive political dialogue. The Tripartite Committee facilitated by the UN published its recommendations to strengthen the electoral system. External shocks and suboptimal policies contributed to substantial macroeconomic imbalances following the Covid-19 pandemic. A new economic team has taken action to stabilize the economy and reduce debt-related risks, but additional efforts will be needed, including to protect the most vulnerable. The Extended Credit Facility (ECF) arrangement will serve as a critical policy anchor, and strong ownership will be key.
November 8, 2024
Lao People's Democratic Republic: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Lao People's Democratic Republic
Description: Growth gathered momentum in 2023 on the back of recovering external demand, but exchange rate depreciation continues and inflation remains persistently high. Labor and FX shortages are intensifying. Public debt is assessed to be unsustainable, despite a tight fiscal stance. FX reserves remain low.
November 4, 2024
The Federal Democratic Republic of Ethiopia: First Review Under the Extended Credit Facility Arrangement, Request for Modification of Performance Criteria, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for The Federal Democratic Republic of Ethiopia
Description: The Board approved Ethiopia’s request for a four-year arrangement under the Extended Credit Facility (ECF arrangement) in July 2024 to support the authorities’ program aimed at addressing macroeconomic imbalances, restoring external debt sustainability, and laying the foundation for high, private sector-led growth. The transition to a market-determined exchange rate has been progressing well with a significant narrowing of the spread between the parallel and official market rate and no signs of significant inflationary pressures, albeit the supply of foreign exchange (FX) to the market has picked up more slowly than anticipated with some unmet demand persisting. With economic agents still adjusting to the new FX regime, persistent uncertainty, and seasonal lows in export earnings, it is too early to draw definitive conclusions on the full effects of the exchange rate reform.
November 1, 2024
Kenya: Seventh and Eighth Reviews Under the Extended Fund Facility and Extended Credit Facility Arrangements, Requests for Reduction of Access, Augmentation and Rephasing of Access Under the Arrangements, Modifications of Performance Criteria, Waiver of Nonobservance of Performance Criteria, and Review Under the Resilience and Sustainability Facility Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Kenya
Description: Kenya is confronted with the need to chart a course that attends directly to the recent public outcry. The widespread protests that started in June and resulted in tragic loss of lives and injuries were triggered by the authorities’ efforts to correct a large tax revenue shortfall in FY2023/24 through revenue raising proposals in the 2024 Finance Bill, some of which were unpopular or seen as regressive. The protests forced the President to withdraw the Bill, introduce significant spending cuts through a Supplementary Budget in July, and reconstitute the Cabinet in August. Persistent difficulties in mobilizing revenue coupled with spending rigidities have led to a further accumulation of pending bills, and necessitated deep cuts in development spending, with potential for knock-on effects on growth and debt sustainability. Against this backdrop, preceded by large exogenous shocks (COVID-19, global developments impacting import price and affordable access to market finance, and severe multi-season droughts), the authorities face a complex and difficult balancing act: meeting critical spending needs for priority areas (social programs, health, and education), servicing large upcoming debt obligations, and boosting domestic revenues. Earlier in the year, Kenya addressed the exceptional balance of payments (BoP) needs associated with repayment of the June 2024 US$2 billion Eurobond, boosting market confidence that helped strengthen the shilling and build reserves. Meanwhile, fiscal pressures continue, including from uncertainty surrounding the constitutionality of the 2023 Finance Act on which the Supreme Court’s decision is awaited.
November 1, 2024
Mexico: 2024 Article IV Consultation and Review Under the Flexible Credit Line Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Mexico
Description: Economic activity is decelerating, and inflation pressures are receding. The fiscal deficit is expected to register a substantial increase in 2024. Mexico maintains sizable buffers, a strong external position, and effective financial oversight. A range of supply-side reforms will be needed to catalyze lasting higher growth.
October 29, 2024
Suriname: Seventh Review Under the Extended Arrangement Under the Extended Fund Facility, Requests for Modification of Performance Criteria, Waivers of Nonobservance of Performance Criteria, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Suriname
Description: The authorities’ commitment to a range of policy reforms is showing results in terms of macroeconomic stability and investor perceptions. The economy is growing, inflation is declining, donor support is increasing, and international bond spreads are at historic lows.