Country Reports
2019
December 19, 2019
Republic of Serbia: Third Review under the Policy Coordination Instrument-Press Release; and Staff Report
Description: This paper discusses the Republic of Serbia’s Third Review Under the Policy Coordination Instrument (PCI). Serbia is the second IMF member country to request a PCI and aims to maintain macroeconomic and financial stability, while advancing an ambitious reform agenda to foster rapid growth, job creation and improved living standards. All quantitative targets (QTs) for end-September 2019 were met. Most reform targets (RTs) have been implemented. The IMF Staff recommends completion of the third review under the Policy Coordination Instrument and establishment of end-September 2020 QTs. Fiscal policy is on track so far, however, it will be important to closely monitor 2019 budget implementation to ensure that the deficit stays within the program ceiling. While progress has been made in reforming the tax administration and strengthening public investment management frameworks, delayed reforms of the public wage system and public employment framework need to advance in 2020.
December 19, 2019
Iceland: Selected Issues
Description: This Selected Issues paper examines scope for improving Iceland’s fiscal framework. Iceland’s fiscal framework provides for a forward-looking exercise in consolidated fiscal planning. The Icelandic fiscal framework shares most elements of successful fiscal frameworks but would benefit from more structured guidance in dealing with cyclical fluctuations. It is backed by a firm legal basis that reflects political support for the fiscal policy objectives, covers the consolidated general government, and is based on sound accounting practices and budget management arrangements. The current parameters of the policy rules have a bias to reduce net public debt and gradually build fiscal space to deal with adverse shocks to economic activity. Adding a primary structural balance rule to the framework would ensure a countercyclical fiscal policy but would add significant complexity. Once the net public debt reaches a socially desirable level, the fiscal rule parameters may be modified to keep net public debt fluctuating around that level.
December 19, 2019
Iceland: 2019 Article IV Consultation-Press Release and Staff Report
Description: This 2019 Article IV Consultation with Iceland discusses that after years of robust growth, economic activity has significantly weakened. Supply disruptions in tourism, the engine of recent growth, and the associated uncertainty have triggered a drop in domestic demand and an increase in unemployment. A swift policy response, with fiscal relaxation and monetary easing, has stabilized expectations and cushioned the effects. A moderate but fragile growth recovery is expected in 2020. Macroprudential measures are helping to preserve buffers for managing financial stability risks. Macroprudential policies are adequate, given still elevated household debt and real-estate prices and benign external financing conditions. Looking forward, the macroprudential toolkit could be expanded to contain potential risks in the loan portfolio over the medium term. Ongoing education reforms would boost human capital and productivity, greater transparency of large unlisted companies would preserve the business environment, and strategic policies in tourism and fisheries would protect the sustainability of traditional economic sectors.
December 18, 2019
Ghana: 2019 Article IV Consultation; Press Release; Staff Report; and Statement by the Executive Director for Ghana
Description: This 2019 Article IV Consultation with Ghana highlights discussions focused on strengthening institutions and policies to preserve macroeconomic stability and promote inclusive growth, building on the authorities’ “Ghana beyond Aid” strategy. The government headline deficit is projected to reach 4.7 percent of gross domestic product in 2019, driven by lower-than-expected revenues, spending on flagship programs, and unexpected security outlays due to emerging security challenges in the region. Medium-term prospects are favorable, with robust growth driven mostly by the extractive sector. Election-related spending pressures in 2020 constitute the main risk to the baseline scenario. Fiscal risks in the financial and energy sectors could also impact the government deficit. Government borrowing needs are exposed to rollover risk that should be carefully managed as financing conditions could tighten. The commitment to the new fiscal rules is expected to help maintain fiscal discipline, as reflected in the unchanged policy baseline. A more ambitious fiscal stance is called for to reduce macroeconomic risks, accelerate debt reduction, and strengthen the external balance.
December 18, 2019
Cote d'Ivoire: Sixth Reviews Under the Arrangement Under the Extended Credit Facility and the Extended Arrangement Under the Extended Fund Facility, and Request for Extension and Augmentation of Access; Press Release; Staff Report; Staff Supplement; and Statement by the Executive Director for the Cote d’Ivoire
Description: This paper discusses Cote d’Ivoire’s Sixth Review Under the Arrangement of the Extended Credit Facility and the Extended Arrangement Under the Extended Fund Facility, and Request for Extension and Augmentation of Access. Côte d’Ivoire has been pursuing a development-oriented policy agenda, and the IMF-supported program in place since 2016 has supported that focus, paving the way for the private sector to become the main driver of growth. The performance under the program has been strong. The medium-term growth prospects remain robust, predicated on continuing prudent macroeconomic policy, furthering financial sector reforms and sustaining structural reforms to bolster private sector-led inclusive growth. Côte d’Ivoire’s reform efforts have resulted in improvements in its business climate in recent years. It will be imperative to continue the reform agenda to further stimulate private sector activity and support inclusive growth, including by improving the energy sector, human capital and financial inclusion, accelerating digitalization, enhancing trade connectivity and governance, expanding the coverage of social safety nets, and reinforcing the statistical apparatus to help better inform economic policy.
December 18, 2019
Ghana: Selected Issues Paper
Description: This Selected Issues paper discusses growth strategy for Ghana. Ghana has achieved impressive development gains over the last decades, with rising incomes, lower poverty, and better health, education, and gender outcomes. However, growth has recently become less inclusive, with high inequality and slower poverty reduction. In order to address these challenges, the authorities are pursuing a “Ghana beyond Aid” development strategy centered around agricultural modernization and export-led industrialization. Accelerating productivity growth calls for fostering competition, improving the business environment, strengthening human capital, taking advantage of growing regional markets and industrial policies that prioritize sectors that can export and innovate and where Ghana could achieve economies of scale. Consistent and predictable government policies can help increase long-term investment and improve public spending effectiveness. A key lesson from growth accelerations in other countries is that it is crucial to achieve economies of scale. In most cases, rapid economic growth required achieving export success in specific sectors.
December 18, 2019
Barbados: 2019 Article IV Consultation, Second Review Under the Extended Arrangement, Request for Completion of the Financing Assurances Review, and Modification of Performance Criteria-Press Releases; Staff Report; and Statement by the Executive Director for Barbados
Description: This paper presents 2019 Article IV Consultation with Barbados and its Second Review Under the Extended Arrangement, Request for Completion of the Financing Assurances Review, and Modification of Performance Criteria. The Article IV discussions focused on fiscal adjustment, medium-term growth and resilience to climate change and natural disasters. The Barbadian authorities continue to make good progress in implementing the comprehensive Economic Recovery and Transformation (BERT) plan aimed at restoring fiscal and debt sustainability, rebuilding reserves, and increasing growth. All program targets for end-June and end-September 2019 have been met. All three structural benchmarks for the second review have also been met. The authorities have continued the reform of state-owned enterprises (SOEs) by completing a review of tariffs and fees charged by SOEs, tightening reporting requirements, and reducing costs. The authorities reached agreement with the External Creditor Committee on a restructuring of external debt to private creditors in October 2019 and launched a debt exchange offer in early November. The IMF Staff proposes modification of the performance criteria relating to the primary balance, net international reserves and net domestic assets.
December 18, 2019
Republic of Georgia: Fifth Review Under the Extended Arrangement, Requests for Waivers of Nonobservance of Performance Criteria, Modification of Performance Criteria, and an Extension of the Arrangement and Rephasing of Access-Press Release; Staff Report; and Statement by the Executive Director for Georgia
Description: This paper discusses Republic of Georgia’s Fifth Review Under the Extended Arrangement, Requests for Waivers of NonObservance of Performance Criteria, Modification of Performance Criteria, and an Extension of the Arrangement and Rephasing of Access. Georgia’s gross domestic product (GDP) growth remains on track to reach 4.6 percent despite the ban on direct flights from Russia. Strong revenue growth has more than offset higher-than-envisaged capital spending, and the 2019 fiscal deficit is likely to be lower than projected at the Fourth Review. The 2020 budget implies a neutral fiscal stance; spending on education and social benefits is expected to rise, while overall current primary spending would remain unchanged. Medium-term fiscal plans are anchored at keeping net debt below 45 percent of GDP. The central bank should maintain a tightening bias until inflation expectations are firmly anchored. The planned emergency liquidity assistance and bank resolution framework will strengthen financial stability. Decisive implementation of structural reforms is critical to support higher and more inclusive growth. Advancing education reform, adopting the insolvency framework, developing the local capital market, and judiciary reform will further improve the business environment and support private investment.
December 9, 2019
Belize: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Belize
Description: This 2019 Article IV Consultation with Belize focused on structural reforms to raise growth and social inclusion; strengthening resilience to natural disasters; balanced medium-term fiscal consolidation; tax reform; and strengthening financial oversight and anti-money laundering and combating the financing of terrorism actions. Public debt remains above 90 percent of gross domestic product, the current account deficit is projected to remain large over the medium term, and international reserves are just below three months of imports of goods and services. The pace of structural reform has been slow. Downside risks, including from slower US growth, natural disasters, crime, and renewed pressures on correspondent banking relationships could weaken growth and financial stability. Belize is adapting its tax regime in response to concerns from multilateral institutions regarding potentially harmful features. Sustaining Belize’s recent economic expansion, spurring private investment, and facilitating structural diversification hinges on strengthening the business environment.
December 9, 2019
Belize: Selected Issues
Description: This Selected Issues paper provides an overview of Belize’s tourism sector and main achievements and discusses the country’s comparative advantages and bottlenecks in tourism. It also analyzes the impact of structural and institutional reforms on tourist arrivals. The outturns in tourism have significantly exceeded targets set in the authorities’ National Sustainable Tourism Masterplan (NSTMP). The implementation of the NSTMP reforms has supported the tourism sector’s expansion. In order to guide the development of the tourism sector, the NSTMP 2011 proposes reforms and targets to propel Belize into an internationally recognized tourist destination by 2030. The emergence of the shared economy business model has also brought new challenges, in addition to opportunities. The benefits of the peer-to-peer accommodation available to customers on digital platforms include the expansion of tourism product, service, and sector offerings; improved access to market; and opportunities for income generation. It is imperative that reforms in the near term should focus on addressing the impact of recurring natural hazards, infrastructure bottlenecks, fortifying the institutional and governance framework, reducing crime, and mitigating concerns relating to the shared economy.