Country Reports
2020
November 19, 2020
Chile: Technical Assistance Report—Assessment of Tax Expenditures and Corrective Taxes
Description: In response to a request from Mr. Ignacio Briones Rojas, Minister of Finance of Chile, a remote mission was conducted by a joint team of staff from the International Monetary Fund (IMF) and the secretariat of the Organisation for Economic Co-operation and Development (OECD) during April – October 2020. The mission’s main purpose was to assist the Minister of Finance with technical support to review Chile’s tax expenditure methodology and its corrective excise taxes. The present report reflects the findings of the mission. This report was written jointly by the IMF and the OECD, with the IMF team leading the work assessing tax expenditures in the corporate income tax (CIT) and the analysis of excises, and the OECD team leading the work assessing tax expenditures in the personal income tax (PIT) and value added tax (VAT). A presentation of the main findings was given to the Minister of Finance on October 6, 2020. The report incorporates comments provided by the Ministry and the Chilean Revenue Administration.
November 18, 2020
Botswana: Technical Assistance Report-National Accounts Mission
Description: A technical assistance (TA) mission was conducted by IMF’s Regional Technical Assistance Center for Southern Africa (AFS)1 during June 8–12, 2020 to assist Statistics Botswana (SB) in improving the quality of the national accounts statistics. The mission was conducted remotely respecting the constraints imposed by the COVID-19 outbreak. Reliable national accounts are essential for informed economic policymaking by the authorities. It also provides the private sector, foreign investors, rating agencies, donors and the public in general with important inputs in their decision-making, while informing economic analysis and IMF surveillance. Rebasing the national accounts is recommended every five years. Rebasing requires comprehensive surveys and ideally, supply and use tables (SUT) to support coherence checking of data.
November 18, 2020
Burkina Faso: Fourth & Fifth Reviews Under the Extended Credit Facility Arrangement, Request for a Waiver of Nonobservance of Performance Criterion & Rephasing of Access-Press Release; Staff Report; and Statement by the Executive Director for Burkina Faso
Description: The security crisis is worsening and is leading to disruption of basic public services and an unprecedented humanitarian crisis. The Covid19 outbreak and the authority’s response to contain its spread further compounded the situation. Presidential and legislative elections are scheduled for November 2020. Outlook and risks. The economic impacts of the global and domestic measures to contain the spread of the COVID19 pandemic have been stronger than expected. Real GDP contracted by 1.4 percent and 8.6 percent (y-o-y) in the first and second quarters of 2020, respectively. The economic outlook remains uncertain, with growth expected to stand around -2.8 percent in 2020 (down from 6 percent forecast prior to the pandemic). Inflation is expected to pick up and reach 4.1 percent by end-2020. The fiscal deficit in 2020 is expected to widen to about 5.3 percent of GDP, to accommodate an effective response to the Covid19 and security shocks. The main risks to the outlook are the uncertainty surrounding the duration of the pandemic and the security crisis.
November 16, 2020
Republic of South Sudan: Request for Disbursement Under the Rapid Credit Facility-Press Release; Staff Report; Statement by the Executive Director for the Republic of South Sudan
Description: After five years of civil conflict, the warring parties came to a peace agreement in September 2018. Until the COVID-19 crisis broke out, improved political stability and an uptick in international oil prices led to significant progress, with a rebound in economic growth, a decline in inflation, and a stabilization of the exchange rate. The COVID-19 pandemic is severely disrupting South Sudan’s economy, leading to a sharp decline in projected growth (-3.6 percent in FY20/21, about 10 percentage points below the pre-pandemic baseline) and a contraction of oil export proceeds—the main source of exports and fiscal revenue—which has given rise to urgent balance of payments needs and opened a large fiscal financing gap.
November 13, 2020
Islamic Republic of Afghanistan: Request for a 42-Month Arrangement Under the Extended Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for the Islamic Republic of Afghanistan
Description: The COVID-19 pandemic has inflicted a heavy economic and social toll, amplifying the challenges of the armed conflict and fragility. Activity contracted sharply, and new external and fiscal financing needs emerged since the approval of the Rapid Credit Facility disbursement. President Ghani and Mr. Abdullah resolved the contested 2019 presidential election in mid-May, and peace negotiations between the government and Taliban started in September. The authorities are seeking renewed support from the international community for Afghanistan’s development and reforms. Donors remain committed but encourage reform implementation and combatting corruption. Aid is likely to decline in the medium term underscoring the need to advance to self-reliance.
November 13, 2020
Spain: 2020 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Spain
Description: COVID-19 impact. The pandemic has hit Spain’s society and economy severely following five years of strong job-rich growth. A large service sector dominated by SMEs, importance of tourism, and widespread use of temporary employment make the economy particularly vulnerable to the health crisis. It will take several years for the economy to recover, and the outlook is subject to strong downside risks.
November 13, 2020
Spain: Selected Issues
Description: The COVID-19 pandemic will exacerbate Spain’s already large inclusion gap. Responding in the recovery with policies that support social objectives should be a key priority and calls for several structural changes. This paper summarizes some of the main drivers behind the social dispersion, which pre-dates the COVID-19 crisis, and policy options. The focus is on how to address the fragmented labor market, tackle pressures on rental-housing affordability, and lower the gender pay gap.1, 2
November 10, 2020
Cabo Verde: Second Review Under the Policy Coordination Instrument and Request for Modification of Targets
Description: The Cabo Verdean economy is facing considerable challenges stemming from the impact of the COVID-19 pandemic. Prior to the health crisis, economic growth was robust, the fiscal and external positions were improving, reserves were at comfortable levels, and public debt was on a downward trajectory. The pandemic is threatening to erode these gains and has generated significant financing needs. The authorities have been implementing policy and healthcare measures to address the fallout of the pandemic and protect vulnerable groups while seeking to safeguard macroeconomic stability.
November 10, 2020
Philippines: Financial Sector Assessment Program-Detailed Assessment of Observance—Basel Core Principles for Effective Banking Supervision
Description: The BSP’s regulatory framework is broadly effective for the size and complexity of the Philippine banking system, but legislative gaps continue to hinder effective supervision of banks. The BSP has a well-resourced, experienced and highly committed staffing complement, but there is an ongoing need to develop and maintain adequate expertise in certain complex areas (e.g., risk modelling). Since the FSAP in 2002, and the assessment update in 2010, the BSP has made significant progress in enhancing the regulatory framework in a number of areas. But significant weaknesses in the legislative framework, arising notably from the bank secrecy laws and the lack of power for the BSP to supervise the parent companies and their affiliates of banking groups, present a material hindrance to effective supervision.
November 10, 2020
Norway: Financial Sector Assessment Program-Technical Note-Risk Analysis and Stress Testing
Description: Much of the work of the FSAP was conducted prior to the COVID-19 outbreak. The risk and vulnerability analysis integrates the original work with a quantification of the impact of the COVID-19 crisis on bank solvency under two separate scenarios. The original ‘market shock’ scenario explores additional risks that feature less prominently in the COVID scenarios.