Country Reports
2024
October 18, 2024
Ukraine: Fifth Review Under the Extended Arrangement Under the Extended Fund Facility, Requests for Waivers of Applicability of Performance Criteria, Modification of Performance Criterion, Rephasing of Access, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Ukraine
Description: Russia’s war in Ukraine continues to bring a rising economic, social, and humanitarian toll. The attacks on the energy infrastructure have inflicted severe economic damage and losses, and the outlook remains highly uncertain. The war is expected to continue through the coming year, generating expenditure pressures and opening additional financing needs. In addition to the longer war, several other recent developments carry important implications for the IMF-supported program: first, a package of tax measures awaits adoption by Parliament, after which the authorities must continue to build on this effort with further broad-based measures to support fiscal sustainability; second, the successful Eurobond exchange in August is a major achievement toward restoring debt sustainability and securing debt relief amid pressing expenditure needs; and finally, the G7’s assurance to provide US$50 billion of stable, multi-year financing to Ukraine through Extraordinary Revenue Acceleration Loans for Ukraine (ERA) initiative is critical for meeting the now larger financing needs.
October 17, 2024
Republic of Kazakhstan: Financial Sector Assessment Program-Technical Note on Astana International Financial Center and the Kazakhstan Financial System
Description: Launched in 2018, the Astana International Financial Center (AIFC) aims to establish a leading international financial center for financial services in Astana, as well as to attract foreign investment and support the growth and development of Kazakhstan and the region. Drawing from a model adopted in the Gulf region, the AIFC is established as a distinct and separate jurisdiction operating under its own legal structure, governance arrangements and regulatory framework (the Astana Financial Services Authority (AFSA) is the designated regulatory authority). Nonetheless, there are multiple interconnections between the AIFC and the domestic financial system that may impact financial stability in Kazakhstan. Policy challenges arise when financial services may be provided under distinct legal and regulatory arrangements from both a ‘domestic’ jurisdiction and a jurisdictionally-separated international financial center. Financial activity in the Center remains small, limiting the immediate risks to Kazakhstan financial stability, but given the strategy of the Center, service provision is expected to increase and interlinkages with the Kazakhstan financial system to grow, raising the systemic importance of the AIFC, as well as the associated risks. While some positive steps have been taken to address these risks, additional enhancements are advisable, to further reinforce regulatory arrangements and lower the risks of spillover, arbitrage, and gaps arising from the co-existence of separate regulatory frameworks for the domestic financial system and the AIFC. Development of a Financial Stability Protocol would codify objectives, responsibilities and working procedures and help ensure effective cooperation and collaboration between the Kazakhstan domestic regulatory agency (ARDFM), the central bank (NBK), and AFSA, in support of the common goal of financial stability in Kazakhstan.
October 11, 2024
Liberia: Request for a 40-Month Arrangement Under the Extended Credit Facility-Press Release; Staff Report; Staff Supplement; and Statement by the Executive Director for Liberia
Description: Liberia’s real per-capita income is still about a third of the level prior internal conflicts. Notwithstanding the strong economic rebound recorded after the pandemic, a large infrastructure gap has remained, and the expected domestic revenue mobilization has not materialized. These two factors have posed significant economic and fiscal challenges in the short and medium term. The implementation of the 2019-23 Fund-supported program was mixed, with a strong start followed by a disappointing performance ahead of the recent presidential elections. To address current and future challenges, fiscal discipline needs to be restored, governance vulnerabilities addressed, and the Central Bank of Liberia (CBL) governance, independence, and supervisory role strengthened. Therefore, scope for deviation from the established policy and reform agenda is very limited given the implications to debt sustainability and capacity to repay the Fund.
October 11, 2024
Republic of Türkiye: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Türkiye
Description: A significant tightening of macroeconomic policy since mid-2023 has substantially reduced crisis risks. Tighter financial conditions are weighing on domestic demand and inflation has fallen. Tax and expenditure measures partly dampened an expansionary fiscal impulse and the commitment to stronger incomes policies has strengthened credibility. Market sentiment has improved, with investors shifting into lira while lower commodity prices, buoyant exports, and reduced gold imports have strengthened the current account and boosted international reserves. Türkiye’s sovereign ratings have been upgraded and country risk premia have halved. While now subsiding, still-high inflation expectations and sequential inflation suggest an insufficiently tight policy stance to reach the midpoint of the authorities’ inflation forecast range.
October 10, 2024
Pakistan: 2024 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 Pakistan
Description: While the 2023–24 Stand-By Arrangement (SBA) supported the restoration of economic stability, Pakistan’s vulnerabilities and structural challenges remain substantial. The new government formed after the February elections has continued efforts to strengthen economic conditions and is embarking on a multi-year home-grown reform program to achieve resilient and inclusive economic growth.
October 2, 2024
Portugal: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Portugal
Description: Portugal achieved a remarkable recovery from the successive shocks that hit the global economy since the pandemic. Growth exceeded the euro area (EA) average. Inflation decelerated fast. The fiscal position improved substantially, achieving a large surplus in 2023 and an impressive public debt reduction by 36 percentage points of GDP since 2020 to 99 percent of GDP. The external position strengthened, buoyed by vigorous exports including tourism, EU funds, and, more recently, better terms of trade. Financial stability indicators improved, reflecting a reduction in systemic risks. At this juncture, a soft landing is within reach. However, subdued productivity growth, population aging, and low investment remain key constraints to higher medium-term growth and better living standards.
September 30, 2024
Kingdom of Eswatini: 2024 Article IV Consultation-Press Release; and Staff Report
Description: Growth reached 4.9 percent in 2023, driven by services, manufacturing, and high transfers from the Southern African Customs Union (SACU). The latter helped move the external current account to a surplus of 2.2 percent of GDP. Inflation averaged 4.9 percent in 2023 and moderated to 4.2 percent in July 2024. The fiscal deficit is estimated to have narrowed to 1.5 percent of GDP in FY23/24; however, domestic payment arrears persisted. Public debt is moderate, at 38.5 percent of GDP. Widening of the policy rate differential between the Central Bank of Eswatini and the South African Reserve Bank to 75 bps in July 2023 has encouraged capital outflows, and official reserves at end-2023 covered only about 2.2 months of imports.