Country Reports
2024
July 11, 2024
Ghana: Poverty Reduction and Growth Strategy
Description: This paper presents Ghana’s Poverty Reduction and Growth Strategy. The vision of the Agenda For Jobs II (2022–2025) is to create an optimistic, self-confident and prosperous nation, through the creative exploitation of our human and natural resources, and operating within a democratic, open and fair society in which mutual trust and economic opportunities exist for all. The Services sector continues to contribute the highest share of gross domestic product (GDP) despite its decline and varied performance of 47.9 percent in 2020, 48.2 percent in 2019 and 47.0 percent in 2018. Industry’s share of GDP decreased from 33.5 percent in 2018 to 33.2 percent in 2019 and 31.6 percent in 2020. Agriculture’s contribution to GDP increased to 20.5 percent in 2020 from 19.5 percent in 2018 and 18.5 percent in 2019. Key challenges requiring attention include the proliferation of slums due to increased rural–urban migration; poor sanitation and noise pollution; weak enforcement of environmental and mining laws and regulations leading to increased illegal mining, forest degradation and water pollution.
July 11, 2024
Brazil: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Brazil
Description: The 2024 Article IV Consultation highlights that Brazil’s economy has shown remarkable resilience amid the ongoing disinflation. Economic activity has grown steadily, surpassing expectations, reflecting favorable demand and supply factors. With proactive and adequately restrictive monetary policy, headline inflation has declined to the target tolerance interval. Gross domestic product growth is expected to moderate in 2024, reflecting still restrictive monetary policy, a lower fiscal deficit, the flood calamity in Rio Grande do Sul, and normalization of agricultural output. Growth is projected to strengthen to 2.5 percent over the medium term, an upward revision of 0.5 percentage point since the 2023 Article IV Consultation, supported by efficiency gains from the value-added tax reform and growing hydrocarbon output. Investment in green growth opportunities could further boost economic potential. The authorities have advanced their ambitious agenda to foster sustainable, inclusive, and green economic growth. Continuing implementation of reforms that promote trade integration, enhance governance, and simplify business regulation would yield productivity gains.
July 11, 2024
Libya: Selected Issues
Description: This Selected Issues paper identifies the sources and quantifies the exchange market pressures on the Libyan dinar. The paper highlights that: (1) the cumulative pressure on the exchange rate has been negative; and (2) despite the alternating appreciation and depreciation pressures, foreign exchange reserves have remained relatively stable. The authorities’ toolkit is limited: they strive to maintain the stock of reserves at a high level and to keep the exchange rate peg intact, all without the use of fiscal policy or of conventional monetary policy instruments. Therefore, developing conventional monetary policy tools and making sure that fiscal policy is consistent with the overall macroeconomic objectives would help the authorities achieve their goals without resorting to capital flow measures. While Libya had periods of both depreciation and appreciation pressures, overall, it faced substantial depreciation pressure. In other words, Libya’s policies over the medium term were not in line with the three-pronged macroeconomic objective of maintaining high foreign reserves, a pegged official exchange rate, and a narrow gap between the parallel and the official exchange rates. The findings suggest that additional monetary tools and the use of fiscal policy can help contain the parallel market premium and avoid the use of capital flow measures.
July 11, 2024
Republic of Uzbekistan: Selected Issues
Description: This Selected Issues paper discusses key channels by which fiscal consolidation impacts short- and medium-term growth, examines the international experience on how to make fiscal consolidation more growth friendly, and analyzes policy implications for Uzbekistan. A large part of the adjustment is implemented with high-quality efficiency-enhancing measures: reducing energy subsidies, improving the targeting of social spending, and curbing policy lending. The World Bank Public Expenditure Review notes that nonwage spending in health and education is low and crowded out by high wage bills, which have been growing in recent years as efforts to improve pay in these areas were implemented. This points to the need to review the adequacy of nonwage spending in these sectors and undertake wage bill rationalization more broadly since these are large sectors of public employment. In the specific case of health spending, consideration should be given to strengthening primary care and introducing task-shifting which will lead to greater efficiency from health wage bill expenditure by shifting its composition over the medium term. Unify the public investment process irrespective of the financing source; create a unified appraisal and selection process; establish a single project pipeline; and improve project monitoring and evaluation to increase public investment efficiency.
July 11, 2024
Ghana: Second Review under the Extended Credit Facility, Request for Modification of Performance Criteria and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Ghana
Description: This paper discusses Ghana’s Second Review under the Extended Credit Facility (ECF), Request for Modification of Performance Criteria and Financing Assurances Review. Ghana’s performance under the program has been generally strong. All quantitative performance criteria for the second review and almost all indicative targets were met. Good progress is being made on the debt restructuring, and key structural reforms are advancing. The authorities’ reform efforts are paying off. Growth has proven more resilient than expected, inflation has declined rapidly from its 2022 highs, and the fiscal and external positions have improved significantly. Greater focus on reforms aimed at private sector development is needed to foster inclusive growth and poverty reduction. In this regard, a key step is to ensure that the policy interventions underpinning Ghana’s National Development Policy Framework are recalibrated to reflect the socio-economic impact of the shocks that occurred after the coronavirus disease 2019 pandemic.
July 11, 2024
Republic of Moldova: Fifth Reviews Under the Extended Credit Facility and Extended Fund Facility Arrangements, First Review Under the Arrangement Under the Resilience and Sustainability Facility, and Request for Modification of a Performance Criterion-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Moldova
Description: This paper highlights Republic of Moldova’s Fifth Reviews under the Extended Credit Facility and Extended Fund Facility Arrangements, First Review under the Arrangement under the Resilience and Sustainability Facility, and Request for Modification of a Performance Criterion. The recovery of the economy from the multiple shocks has been slower than anticipated, with growth lower than expected in 2023 and more subdued in 2024. Inflation has remained within the National Bank of Moldova’s target band since last October. The authorities’ continued focus on contingency planning, while maintaining agile policies, has helped contain the impact of recent shocks. Going forward, ongoing efforts to undertake growth-friendly reforms, strengthen energy security, and promote climate resilient investments, while pursuing the path toward EU accession, will support Moldova’s development objectives. Continued progress on anti-corruption reforms is needed to further increase trust in Moldova’s institutions and foster socio-economic development. Adoption of the law establishing a new Anti-Corruption Court, expected this summer, would be a key welcomed development, and the authorities should operationalize the Court quickly and effectively.
July 11, 2024
Union of the Comoros: Second Review under the Extended Credit Facility Arrangement and Request for a Waiver of Nonobservance of Performance Criterion-Press Release; Staff Report; and Statement by the Executive Director for the Union of Comoros
Description: This paper presents Union of Comoros’ Second Review under the Extended Credit Facility (ECF) Arrangement and Request for a Waiver of Nonobservance of Performance Criterion. Performance under Comoros’s economic reform program continues to be broadly satisfactory, and the authorities remain committed to the economic policies and reforms underpinning the ECF-supported program. Reforms are beginning to bear fruit, with visible signs of macroeconomic stabilization. However, Comoros continues to face the challenges of a small, fragile island state which requires steadfast program implementation and continued support from international partners. Monetary policy has contained inflation and ensured sufficient external buffers for Comoros and the stability of the peg. Continued efforts to stabilize the financial sector, including through the restructuring of the state-owned postal bank, addressing credit quality in the banking system, and strengthening banking supervision and resolution capacities are welcome. Support from international partners continues to be important for addressing the country’s large development needs and climate-related risks.
July 11, 2024
Republic of Uzbekistan: 2024 Article IV Consultation-Press Release; and Staff Report
Description: The 2024 Article IV Consultation discusses that Uzbekistan’s growth momentum continues on the back of far-reaching structural reforms to liberalize its economy, favorable commodity prices, and notable increases in financial and income flows. Growth is expected to remain robust at 5.4 percent in 2024, despite the appropriate withdrawal of fiscal stimulus and slowing trading partner growth. In 2025, growth is projected to pick up to around 5½ percent. Needed increases in administered energy prices would temporarily raise inflation to 11.5 percent by end-2024. The government’s planned fiscal consolidation is appropriate and will help reduce inflation and imports while protecting the vulnerable. Further efforts are needed to broaden the tax base, modernize the tax system, improve the efficiency of public spending, and strengthen public financial management. Monetary policy should remain focused on reducing inflation to the central bank’s target and be tightened if energy price reforms spill over to core inflation and inflation expectations. Structural reforms should focus on reducing the state’s role in the economy, promoting women’s participation in the labor market, advancing decarbonization and climate adaptation initiatives, and enhancing governance and transparency, building on progress already made.
July 11, 2024
Libya: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Libya
Description: The 2024 Article IV Consultation highlights that Libya remains a fragile state trapped in political uncertainty, but the episodes of active conflict have become less frequent. The outlook continues to be dominated by the dynamics of hydrocarbon production. Libya needs to manage public expenditure consistent with its macroeconomic constraints, and requires proper budgeting to avoid procyclical spending, and improve coordination between fiscal and monetary policies. Completing the central bank reunification remains key to maintaining financial stability, along with reforms on strengthening monetary policy and updates to the banking supervision framework. The baseline projection is for declining fiscal and external balances over the coming years, in line with a projected decline in global oil prices. The Central Bank of Libya is expected to maintain the current stock of international reserves, and the country will continue to have no public debt as conventionally understood. However, the balance of risks is tilted to the downside, and uncertainty remains high due to the continuing political stalemate and possible geopolitical spillovers.
July 10, 2024
Republic of Madagascar: Request for an Arrangement Under the Extended Credit Facility and Cancellation of the Current Arrangement Under the Extended Credit Facility and Request for an Arrangement Under the Resilience and Sustainability Facility-Press Release; Staff Report; Staff Supplement; Staff Statement; and Statement by the Executive Director for Republic of Madagascar
Description: This paper presents Republic of Madagascar’s Request for an Arrangement under the Extended Credit Facility (ECF) and Cancellation of the Current Arrangement under the ECF and Request for an Arrangement under the Resilience and Sustainability Facility (RSF). The RSF arrangement will underpin reforms to strengthen adaptation to climate change and resilience against natural disasters, support climate change mitigation efforts, enhance the protection of ecosystems, and create conditions for green private sector investment. Madagascar continues to face challenges, with economic growth easing in a context of weak fiscal performance and gradual reform progress. Going forward, climate change poses significant risks to Madagascar’s economy. The authorities are implementing measures to create fiscal space for much needed social spending and investment. These include medium-term revenue mobilization efforts through tax policy and revenue administration measures. Tackling climate change challenges will be critical for Madagascar’s medium-term macroeconomic resilience. The report suggests that the authorities should take full advantage of the support provided by the IMF and the World Bank through the Enhanced Cooperation Framework for Climate Action, and by other development partners to catalyze private climate financing.