Country Reports
2019
April 23, 2019
Jamaica: Fifth Review Under the Stand-By Arrangement-Press Release and Staff Report
Description: This first review under the Stand-By Arrangement (SBA) highlights that the economy has expanded for the past 15 quarters, unemployment is at historic lows, international reserve coverage is consistently high, inflation is subdued—albeit below the Bank of Jamaica (BOJ) target 4–6 percent range, the stock market was the globe’s best performer in 2018, and Fitch recently upgraded Jamaica’s credit rating. A slow pick-up in private investment, however, is still pointing to the need to reinvigorate the effort to remove supply-side impediments to growth and job creation. It has been observed that sustained reduction in the public wage bill will require a fundamental transformation of the compensation framework and the public sector. Moreover, the BOJ’s recent advances in communication should continue to stress the central bank’s commitment to its inflation mandate. The discussions described that an escalation in crime could further curtail private investment and growth. Weaker world growth and tighter global financial conditions represent important downside risks.
April 17, 2019
Bosnia and Herzegovina: Technical Assistance Report-Report on Government Finance Statistics Technical Assistance Mission, (October 1-5, 2018)
Description: This Technical Assistance Report discusses details of the mission conducted to support the Bosnia and Herzegovina authorities, with a specific focus on the Republic of Srpska (RS), in improving government finance statistics (GFS) for decision making. The mission rounded off research to establish appropriate reconciliation procedures, although some statistical discrepancies remain. The goal is to use the compilation and reconciliation procedures for quarterly and annual GFS reporting to Eurostat and the IMF’s Statistics Department. The May 2018 mission initiated the development of a standardized compilation procedure for nonbudgetary public sector units, and more specifically extrabudgetary units. The report recommends focussing on investigating possibilities into incorporating these compilation files into the wider GFS and macroeconomic statistics compilation. On analysis of the financial statements, the mission assessed that Accrued revenues and received donations also require and adjustment to following the European System of National and Regional Accounts 2010 and Government Finance Statistics Manua 2014 recording.
April 17, 2019
Maldives: Technical Assistance Report-Public Investment Management Assessment
Description: This Technical Assistance Report discusses that in the Maldives, public investment trends have been influenced by a number of contextual factors including the economic dependency on tourism, the high exposure to climate change, and the recent democratization. The mission assessed the strength and quality of public investment management (PIM) in the Maldives using the IMF Public Investment Management framework, based on the three phases of the PIM cycle. The report highlights that the most significant weakness in the PIM and the wider Public Financial Management system is poor budget credibility and budget execution. However, some progress has been made in improving PIM institutions, and reforms are ongoing in a number of areas. It is imperative to strengthen the project appraisal process by developing a standard methodology for project appraisal, publishing this methodology and verifying that it is consistently applied by the line ministries. It is also important to develop a framework for ex-post evaluations and ensure that lessons learned from past projects are incorporated in revised guidelines and practices.
April 17, 2019
Zimbabwe: Technical Assistance Report-Report on Government Finance Statistics Technical Assistance Mission
Description: This Technical Assistance Report discusses that the authorities are making some progress towards higher quality and more comprehensive Government Finance Statistics, however, sufficient information for meaningful monitoring and surveillance of the public sector in Zimbabwe should be considered a long-term goal with several remaining challenges. The government of Zimbabwe has recently embarked upon an ambitious reform program for public sector corporations, which is expected to lead to a dramatic reduction in government balance sheet risk via contingent liabilities and the direct fiscal impact arising from the high likelihood of those guarantees being called. The report also highlights that the Accountant General office should have the ability to set a standardized format and the required information for general government financial statements which are to be reported for all subsectors and ministries. The mission recommends that the authorities review compliance with Republic of Zimbabwe Public Finance Management Act of 2009 across general government subsectors, including, all local government units, Extrabudgetary Units funds and social security funds.
April 13, 2019
Costa Rica: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Costa Rica
Description: This 2019 Article IV Consultation highlights that Costa Rican government recognizes the challenges and is planning a broad array of measures, although the political and social environment remains difficult. The Consultation focused on policies that would help restore fiscal sustainability, strengthen the inflation targeting framework, enhance resilience of the financial system, and boost potential and inclusive growth. The fiscal reform constitutes a critical step towards restoring fiscal sustainability, but full and timely implementation is key. Further frontloaded fiscal consolidation, based largely on revenue measures, should be implemented to further reduce debt and financing pressures, while taking measures to protect the poor. It is also recommended that monetary policy should continue to remain data dependent and balance downside risks to inflation stemming from slower activity and upside risks to inflation arising from tighter global financial conditions. Structural reforms, including those planned under the Organisation for Economic Co-operation and Development accession process should be implemented to improve competitiveness and foster inclusive growth.
April 10, 2019
Myanmar: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Myanmar
Description: This 2018 Article IV Consultation highlights that Myanmar’s economy is expected to gain steam albeit at a somewhat slower pace than previously envisaged but faces greater downside risks including from the crisis in Rakhine state. The country’s long-term prospects remain strong, supported by a growing demographic dividend, a competitive labor force and its strategic location. The discussions recommend that successful implementation of the second wave of reforms in the Myanmar Sustainable Development Plan with a focus on peace, stability and good governance will help sustain the growth take-off and achieve the Sustainable Development Goals (SDGs). Financial regulations and supervision should be strengthened with a view to ensuring financial stability and deepening, while forming contingency plans to address systemic banking risks, and strengthening the resolution framework. Fiscal policy should be directed towards SDG-related spending, while lowering Central Bank of Myanmar financing and ensuring debt sustainability. The business environment is expected to benefit from upgraded infrastructure, access to finance, and strengthening of the overall governance framework.
April 6, 2019
Arab Republic of Egypt: Fourth Review Under the Extended Arrangement Under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for the Arab Republic of Egypt
Description: This paper discusses Argentina’s Fourth Review under the Extended Arrangement under the Extended Fund Facility (EFF). The paper highlights that Egypt’s macroeconomic situation has improved markedly since the initiation of the authorities’ reform program in November 2016. The liberalization of the foreign exchange market, prudent monetary policy, and ambitious fiscal consolidation has helped stabilize the macroeconomic environment. Growth has accelerated; external and fiscal deficits have narrowed; international reserves have risen; and public debt, inflation, and unemployment have declined. The external environment has shifted in recent months, posing new policy challenges. The tightening of global financial conditions and heightened global risk aversion have contributed to a pullback by investors from emerging markets. The outlook remains favorable, provided policies agreed under the program are implemented, but the balance of risks has shifted. The authorities’ prudent policies have been instrumental in preserving macroeconomic stability, even as the external environment has weakened notably. The IMF staff supports the authorities’ request for the completion of the fourth review under the Extended Arrangement under the Extended Fund Facility.
April 5, 2019
Argentina: Third Review under the Stand-By Arrangement, Request for Waivers of Applicability of Performance Criteria, Financing Assurances Review, and Request for Modification of Performance Criteria-Press Release and Staff Report
Description: This paper discusses Argentina’s Third Review under the Stand-By Arrangement, Request for Waivers of Applicability of Performance Criteria, Financing Assurances Review, and Request for Modification of Performance Criteria. Discussions centered on the risks to the fiscal position, how best to counter the rise in inflation and inflation expectations, how best to mitigate debt rollover risks, and what more can be done to mitigate the impact of the economic downturn on the most vulnerable. The paper highlights that the Argentina economy continues to contract, albeit at a modestly slower pace than had been expected under the program. After a brief period of falling monthly inflation, price pressures and inflation expectations are again rising. Financial conditions improved in January, with declining sovereign spreads and a rally in the local equity market, but have since then erased much of those gains, with rising volatility in both currency and interest rates in March. All end-March performance criteria and fiscal targets are expected to be met.
April 5, 2019
Ghana: Seventh and Eighth Reviews Under the Extended Credit Facility Arrangement and Request for Waivers of Nonobservance of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Ghana
Description: This paper discusses Ghana’s Seventh and Eighth Reviews Under the Extended Credit Facility Arrangement and Request for a Waiver of Nonobservance of Performance Criterion (PC). Ghana’s macroeconomic performance has significantly improved in the last two years under the ECF-supported program. The elevated debt burden and fiscal risks from the financial and energy sectors limit policy space. The large loss of foreign exchange reserves in 2018 is a pointed reminder of Ghana’s exposure to shifting investors’ sentiment and external shocks, amplified by the government’s still elevated financing needs. Ghana’s legacy of political budget cycles will test the authorities’ commitment to macroeconomic discipline and reform in 2020—a challenge that the authorities intend to face head on. Corrective measures have been put in place to address the PCs missed at end-June (three) and end-December (two) and the continuous PC on credit to the government by the Bank of Ghana.
April 2, 2019
Albania: Technical Assistance Report-Revenue Administration: Supporting the Delivery of the Reform Agenda
Description: This Technical Assistance Report discusses several tax administration issues and high-level recommendations for the reform agenda. The General Directorate of Taxes (GDT) continues to make good progress in modernizing its administration of the taxation system. A program to consolidate some core functions into fewer regional locations, beginning with the arrears collection function, should be accelerated. The GDT’s increased use of electronic services and telephone contact centers reduces the need for face-to-face contact with taxpayers. The GDT must have access to a broader range of third-party information, and data-warehouse facilities to manage the risk assessment with automated analytical tools. There are some positive developments in the audit function; however, further capacity building is necessary. A new comprehensive desk audit manual has been developed, which will help to standardize operations and provide more appropriate case allocation based on auditor experience and skills.