Country Reports
2021
March 2, 2021
West African Economic and Monetary Union: Staff Report on Common Policies for Member Countries-Press Release; Staff Report; and Statement by the Executive Director for the West African Economic and Monetary Union
Description: After almost a decade of strong growth, the WAEMU region is facing severe challenges from a triple crisis impacting the health, economic and security situations. Both fiscal and monetary policies were relaxed significantly in 2020 to contain the pandemic and support the economy. A gradual fiscal consolidation is expected to start in 2021 and bring back the aggregate fiscal deficit towards the 3 percent of GDP regional ceiling within three years. Growth is expected to recover swiftly in 2021–22 to pre-crisis levels, but the economic outlook is still uncertain.
March 2, 2021
Indonesia: 2020 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Indonesia
Description: Indonesia has responded with a bold and comprehensive policy package to cushion the impact of the COVID-19 pandemic. The economy rebounded in the third quarter of 2020, and the economic recovery is projected to strengthen in 2021 and 2022. Strong policy support and an improving global economy will be the main drivers initially, and greater mobility and confidence will follow with the planned vaccination program in 2021. The uncertainty surrounding the growth outlook is larger than usual. Early completion of a widespread vaccination program is an upside risk, while a protracted pandemic remains a downside risk. The macro-financial fallout of the pandemic and economic downturn could be larger than expected, and credit conditions could be slow to improve. Ongoing reforms aimed at promoting investment are expected to help mitigate the scarring effects from the pandemic and put the economy on a sustained growth path that builds on Indonesia’s favorable demographics.
March 1, 2021
Vietnam: 2020 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Vietnam
Description: Successful containment of COVID-19 and strong policy support have helped contain the health and economic fallout, and a strong recovery is underway. Growth in 2020 reached 2.9 percent, among the highest in the world. However, labor market conditions remain weak. Corporate balance sheets have worsened, potentially hampering private investment and job prospects. Banks entered the crisis in a stronger position than in previous years, but weaknesses remain. Vietnam’s economy remains heavily reliant on external trade and is vulnerable to trade tensions.
March 1, 2021
Costa Rica: 2021 Article IV Consultation and Request for an Extended Arrangement Under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for Costa Rica
Description: Costa Rica has been hit hard by the COVID-19 pandemic, notwithstanding the authorities’ proactive policy response and the country’s well-established universal healthcare system. The socio-economic impact has been significant, exacerbating an already fragile outlook and pre-existing imbalances, with a significant toll on economic activity and unemployment—especially among women and the young. The shock has further weakened the country’s fiscal position, undermining the expected yields from the ambitious fiscal reform launched in late 2018, and generated a large financing gap. Financial support through the Fund’s Rapid Financing Instrument (RFI) in 2020 provided temporary relief to respond to the pandemic, including by catalyzing financial assistance from other official partners, but financing needs remain sizable over the medium term.
February 26, 2021
Tunisia: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Tunisia
Description: The pandemic aggravated Tunisia’s long-standing vulnerabilities stemming from persistent fiscal and external imbalances, rising debt, and contingent liabilities from inefficient state-owned enterprises. The crisis is expected to induce the largest contraction in real GDP since independence. The authorities’ targeted response together with higher outlays on wages widened the fiscal deficit. A second Covid-19 wave is underway. The authorities are securing 500,000 doses to start a first campaign of vaccinations in February and are aiming to secure more doses to vaccinate half of the population starting in April–May. Staff expects GDP growth to rebound modestly in 2021, but it could take years before activity returns to pre-crisis levels, especially if large imbalances were not addressed and key reforms delayed. Downside risks dominate and recent protests highlight the level of social tensions, aggravated by Covid-19 restrictions, and particularly among the youth.
February 26, 2021
Bosnia and Herzegovina: 2020 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Bosnia and Herzegovina
Description: Pre-pandemic, Bosnia and Herzegovina’s (BiH) economy was growing, but at a pace below the more successful countries in Eastern Europe. The pandemic generated a substantial output contraction in 2020. Early in the pandemic, the authorities successfully implemented restrictions to prevent the spread of the virus and took measures to support firms and households. However, the ongoing second wave poses additional challenges. A gradual recovery is expected for the second half of 2021. Political disagreements about policy coordination at the BiH State level have hampered program implementation under the 2016 EFF arrangement and the deepening of the single economic space. The challenge is to deal with the pandemic and put the economy on a higher medium-term growth trajectory.
February 26, 2021
Republic of Mozambique: Technical Assistance Report on Public Sector Debt Statistics Mission (October 19-30, 2020)
Description: This technical assistance (TA) mission on Public Sector Debt Statistics (PSDS) was conducted during October 19-30, 2020. The main purpose of the mission was to review the progress made by the authorities in implementing previous TA recommendations and provide further support to strengthen the compilation and dissemination of GFS in line with international standards set out in the Government Finance Statistics Manual 2014 (GFSM 2014).
February 17, 2021
Republic of Kosovo: 2020 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Republic of Kosovo
Description: Kosovo has been hit hard by the COVID-19 pandemic. Despite policy support, economic activity is estimated to have fallen 6 percent in 2020 on account of the combined effect of strict domestic containment measures and international travel restrictions. The fiscal deficit increased to 7.7 percent of GDP, given the large fall in tax revenues and the implementation of mitigation and recovery measures of 4.2 percent of GDP. The current account deficit is estimated to have increased to 7.5 percent of GDP mainly due to a large decline in diaspora-related inflows, most notably in tourism. Gross international reserves declined but remain adequate in part due to the purchase under the IMF’s Rapid Financing Instrument (RFI) in April 2020 and the use of other external financing. Banks have weathered the recession well to date, and the high pre-COVID19 liquidity levels and ample capital buffers bode well for the system’s stability.
February 12, 2021
Mali: Request for Modification of Criteria Under the Extended Credit Facility-Staff Report
Description: This staff report proposes the modification of the performance criteria for end-December 2020 for the economic program supported by the three-year Extended Credit Facility (ECF) arrangement that was approved by the Executive Board on August 28, 2019. The modifications aim to accommodate the needed response to combat the COVID-19 pandemic and to adjust the end-December 2020 targets to take account of the impact of the pandemic shock.