Country Reports
2024
July 8, 2024
Republic of Serbia: Third Review Under the Stand-By Arrangement and Request for Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Republic of Serbia
Description: This paper presents Republic of Serbia’s Third Review under the Stand-By Arrangement (SBA) and Request for Modification of Performance Criteria. With the impact of the energy crisis fading, growth is expected to increase to close to 4 percent in 2024 alongside a robust labor market, real wage increases and higher investment. Macroeconomic outturns under the program remain strong. Growth is increasing, inflation is falling, the current account deficit has narrowed, reserves are at record highs, and public debt is declining. The authorities are firmly committed to their 2024 fiscal plans, which are aligned with the SBA’s fiscal targets, but higher public investment means that deficits over 2025–27 are set to be higher than previously envisaged. Stepped-up public investment will be accompanied by additional transparency and public investment management reforms. The financial situation of the energy sector state-owned enterprises (SOE) has been stabilized. Structural reforms in the energy sector companies, SOE governance, and broader fiscal management are progressing well.
July 8, 2024
United Kingdom: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for United Kingdom
Description: The 2024 Article IV Consultation discusses that the UK economy is approaching a soft landing, following a mild technical recession in 2023. A modest recovery is projected, with 0.7 percent growth in 2024, strengthening to 1.5 percent in 2025. Inflation has fallen rapidly from double digit levels last year in the context of easing energy prices and tight policies. Assuming wage and services inflation continue to moderate from their current elevated levels, inflation should return durably to target in the first half of 2025. The overarching policy objective is to maintain price and financial stability, durably lift per capita growth, and address pressing public spending needs while credibly stabilizing debt. Macroprudential settings are appropriate but continued close monitoring of credit conditions and financial stability risks, including stringent stress tests, is merited in future calibrations. IMF supports a redoubling of policy efforts to credibly achieve the UK green transition targets and maintaining a cautious approach toward industrial policy interventions.
July 8, 2024
United Kingdom: Selected Issues
Description: This Selected Issues paper analyses monetary policy issues in the UK. It examines key macro and financial indicators and assesses the effects of the tightening thus far. The paper finds that monetary transmission has largely mirrored previous episodes, with the most notable exception of the mortgage channel, which has been slower due to a higher share of fixed-rate mortgages. Additionally, it reveals an outsized impact of federal announcements on UK financial markets and argues that this will place a premium on Bank of England (BoE) communications in a context where the BoE may diverge. Monetary transmission in the UK during the current cycle has mostly worked as expected and has been similar to the experiences in other advanced economies. The paper identifies identify monetary policy surprises through changes in high-frequency market indicators within a narrow window around monetary policy announcement. The results indicate that Federal Open Market Committee spillovers do have a sizable effect on monetary transmission in the UK.
July 1, 2024
Jordan: First Review Under the Extended Arrangement Under the Extended Fund Facility and Request for Modification of Performance Criteria-Press Release; and Staff Report
Description: This paper highlights Jordan’s First Review under the Extended Arrangement under the Extended Fund Facility and Request for Modification of Performance Criteria. Jordan’s economy continues to show resilience despite a challenging external environment. The economy continues to grow, albeit at a somewhat slower pace, inflation is low, and reserve buffers are strong. Growth is projected to pick up pace in 2025, contingent upon the Israel-Gaza conflict ending and its impact fading. Uncertainty is high, however, and structural challenges remain, with continued high unemployment. Strong progress was also made in implementing structural benchmarks (SBs), with all six SBs for the first review met, and with good progress being made toward meeting SBs for the next review. The authorities remain firmly committed to sound macro-economic policies and advancing structural reforms, to maintain macro stability, further strengthen economic resilience in the face of successive external shocks, and foster stronger, job-rich growth. Steadfast implementation of structural reforms is crucial to create a more dynamic private sector that can generate sufficient jobs and contribute to higher living standards.
July 1, 2024
Paraguay: Selected Issues
Description: The Selected Issues paper focuses on analyzing trade barriers in Paraguay. This study aims to conduct a more comprehensive analysis of Paraguay's trade performance compared to other Latin American nations and countries outside the region that share similar traits with Paraguay. The analysis highlights the crucial role of comprehensive policies in infrastructure development, governance enhancement, and human capital improvement for promoting trade in all countries, including Paraguay. Reducing trade barriers, overcoming infrastructure shortfalls, and enacting policies to enhance Paraguay's attractiveness for investment are key strategies for fostering trade and economic development. Finally, given Paraguay's levels of export concentration across products, alongside an increasing concentration across markets, and the vulnerability of its primary agricultural exports to droughts, diversification strategies should be intensified, both in terms of products and export markets. Investing in agricultural technology and practices that enhance drought resilience is crucial to safeguard primary exports. Additionally, exploring and developing nonagricultural sectors for export can reduce reliance on volatile agricultural commodities.
July 1, 2024
Paraguay: 2024 Article IV Consultation, Third Review Under the Policy Coordination Instrument, Modification of Targets, and First Review Under the Arrangement Under the Resilience and Sustainability Facility-Press Release; and Staff Report
Description: This paper presents Paraguay’s 2024 Article IV Consultation, Third Review under the Policy Coordination Instrument (PCI), Modification of Targets, and First Review under the Arrangement under the Resilience and Sustainability Facility (RSF). The PCI underpins Paraguay's economic strategy and structural objectives of maintaining macroeconomic stability and promoting social welfare and inclusion. The PCI is yielding positive results, though two targets were missed due to the identification of additional unrecorded healthcare-related expenditure. Three reform targets have been met. The new government is committed to continuing reforms guided by the PCI and RSF arrangements. It is crucial for Paraguay to rebuild fiscal buffers, ensure the sustainability of the public servants’ pension fund and enhance supervision of public enterprises to limit contingent risks. Taking decisive action against corruption to minimize reputational risks, reducing informality, and increasing international market integration will make Paraguay a significantly more attractive investment destination, including for green projects. Adaptation and mitigation measures should reduce the country"’s vulnerability to climate change and preserve its substantial natural assets and clean energy matrix.
June 28, 2024
Central African Economic and Monetary Community: Common Policies in Support of Member Countries Reform Programs-Staff Report; and Statement by the Executive Director
Description: This paper presents a report on the common policies in support of member countries reform programs in the Central African Economic and Monetary Community (CEMAC). The CEMAC’s economy lost some momentum in 2023 and the external position deteriorated somewhat, while inflation cooled but remained high. Updated statistics revealed a much more deteriorated fiscal situation than originally estimated. In the absence of decisive corrective actions, and with current policies unchanged, fiscal and external imbalances are set to widen in the medium term, threatening to reverse reserve accumulation and add to financial stability risks. Decisive corrective policies are warranted to address the sustained fiscal slippages and return to fiscal prudence. In order to boost potential output, faster progress is needed on strengthening anti-money laundering and combating the financing of terrorism, governance, and regulatory policies, as well as improving human capital, the business climate, the rule of law, financial inclusion, and regional infrastructure.
June 28, 2024
Seychelles: 2024 Article IV Consultation, Second Reviews Under the Arrangement Under the Extended Fund Facility and the Arrangement Under the Resilience and Sustainability Facility, Requests for a Waiver of Nonobservance and Modification of Performance Criteria-Press Release; and Staff Report; and Statement by the Executive Director for Seychelles
Description: This paper presents Seychelles’ 2024 Article IV Consultation, Second Reviews under the Arrangement under the Extended Fund Facility (EFF) and the Arrangement under the Resilience and Sustainability Facility (RSF), Requests for a Waiver of Nonobservance and Modification of Performance Criteria. The government has made considerable progress under the EFF and RSF Arrangements—strengthening fiscal and external buffers, reducing public debt, and enhancing the policy framework to address climate change. Long-term challenges center on the limits to sustainable tourism-based growth, economic diversification, and Seychelles’ high vulnerability to the effects of climate change. The policy framework is guided by the need to preserve macroeconomic and financial sustainability, build fiscal and external buffers, as well as advance prospects for long-term inclusive growth and economic resilience, in line with the objectives under the EFF and RSF. Toward this end, the mission agreed with the authorities on a revised macroeconomic framework and quantitative program targets consistent with the program objectives of steady fiscal consolidation and reduction of public debt over the medium-term.
June 28, 2024
Barbados: Third Reviews Under the Arrangement Under the Extended Fund Facility, Arrangement Under the Resilience and Sustainability Facility, and Request for Modification of Performance Criteria-Press Release; and Staff Report
Description: This paper presents Barbados’ Third Reviews under the Extended Arrangement under the Extended Fund Facility, Arrangement under the Resilience and Sustainability Facility, and Request for Modification of Performance Criteria. Barbados’ economy has recovered to pre-pandemic levels and the external position has improved. Inflation moderated gradually with the easing of global commodity prices but remained somewhat elevated due to adverse weather conditions that affected some domestic crops, and stronger demand for tourism-related services. Gross domestic product growth is expected to remain strong in 2024, driven by dynamism in tourism and related sectors. Implementation of the home-grown Barbados Economic Recovery and Transformation plan and the ambitious climate policy agenda continues to be strong. The authorities have completed both reform measures for this RSF review. In March, the government tabled a Stormwater Management Act, replacing the existing Prevention of Floods Act. Meanwhile, Cabinet approved the Energy Efficiency and Conservation Policy Framework to reduce energy use of all government agencies and develop efficient public lighting.
June 28, 2024
Islamic Republic of Mauritania: Poverty Reduction and Growth Strategy
Description: This paper presents Islamic Republic of Mauritania’s poverty reduction and growth strategy. With the second Strategy for Accelerated Growth and Shared Prosperity (SCAPP) Action Plan 2021–2025, Mauritania is embarking on a new phase in the implementation of its three-five-year strategy to achieve the vision “The Mauritania we want in 2030.” Mauritania, through its commitment to the implementation of the SCAPP, marks its willingness to initiate a large-scale economic, social and environmental transition, on the path of inclusive growth, economic diversification, social cohesion, respect for fundamental rights and human dignity, peace and respect for the environment. The first Action Plan 2016–2020 demonstrated that the implementation of the SCAPP was able to record convincing results. However, some of the objectives could not be achieved, in particular because of the Coronavirus disease 2019 pandemic, which severely affected the world economy, and therefore the Mauritanian economy, which resulted in the emergence of new priorities. This Action Plan 2021–2025 takes into account the lessons learned from the implementation of the first and implements the necessary measures to support the country in its economic recovery and respond to the decisive challenges of the next 5 years, which will be decisive in the preparation of the third Action Plan and the achievement of the 2030 Goals.