Country Reports
2018
December 20, 2018
Suriname: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Suriname
Description: Suriname is recovering from the deep recession of 2015-16. Growth has turned positive, inflation has reduced to single digits, real interest rates have turned positive, and the external position has on balance strengthened. Nonetheless, the economy remains heavily dependent on the mineral sector, and faces fiscal, monetary, and banking sector vulnerabilities.
December 20, 2018
Suriname: Selected Issues
Description: This Selected Issues explores ways for strengthening the current fiscal framework in Suriname and considers options for a new fiscal anchor. The paper provides an overview of mineral natural resources and their importance for the budget. It also lays out the current framework for fiscal planning and budget execution in Suriname and discusses the analytical underpinnings of modernizing it to make it more robust. The paper also presents estimates of long-term sustainability benchmarks based on the IMF’s policy toolkit for resource-rich developing countries. Suriname’s fiscal framework can be strengthened through a fiscal anchor rooted in the non-resource primary balance. Given the size of fiscal adjustment required to bring the non-resource primary balance in line with the long-term sustainability benchmark, a substantial transition period is needed to implement it. The IMF Staff’s adjustment scenario—designed to put public debt on the downward path—closes the current gap by less than half, implying that adjustment would need to continue beyond the 5-year horizon.
December 19, 2018
Argentina: Second Review under the Stand-By Arrangement; Financing Assurances Review; and Request for Modification of Performance Criterion-Press Release; and Staff Report
Description: The redesigned IMF-supported economic reform program is bearing early results. Financial markets have stabilized since end-September, following the adoption of the new monetary policy framework. After the appreciation of the currency in October, the peso has floated within the non-intervention zone. Short-term interest rates have fallen back to their end-September level. The passage of the 2019 Budget with broad political support has helped solidify confidence in the authorities’ stabilization plan. As a result, demand for Argentine bonds has strengthened and sovereign risk premia have narrowed.
December 19, 2018
Georgia: Third Review Under the Extended Fund Facility Arrangement-Press Release; Staff Report; Staff Supplement
Description: Recent economic developments. Economic activity remained strong in 2018H1 but decelerated since due to subdued private construction activity and delays in public infrastructure. Inflation has remained below the 3-percent inflation target in 2018. Higher revenues and lower investment resulted in a fiscal surplus through September 2018. Against the background of high credit growth, the authorities introduced regulations to limit household over-indebtedness. The banking sector remains well capitalized, liquid, and profitable, but dollarization remains high.
December 19, 2018
Niger: Third Review Under the Extended Credit Facility Arrangement, Request for Waiver of Nonobservance of Performance Criterion, and Request for Augmentation of Access-Press Release; Staff Statement; and Statement by the Executive Director for Niger
Description: Niger faces daunting development challenges, aggravated by terrorist incursions, low uranium export prices, and climate change. Nonetheless, GDP grew by a respectable 5 percent in the past two years. It should average 7 percent over the next five years thanks to reforms, substantial donor support, several large-scale projects, and a one-time boost from the projected commencement of crude oil exports in 2022.
December 19, 2018
Republic of Serbia: First Review under the Policy Coordination Instrument-Press Release; and Staff Report
Description: Recent economic developments. The program is broadly on track and the economy is growing strongly, supported by private consumption, investment, and exports. Fiscal performance remains sound, modernization of the tax administration has accelerated, and public debt has fallen sharply. Inflation remains below the mid-point of the NBS inflation band, while the NBS has kept rates on hold since April. Both credit and private sector wage growth are strengthening. Program performance. Quantitative targets (QTs) for end-September 2018 were met, apart from a minor deviation on the QT for domestic arrears. Most reform targets (RTs) have been implemented, albeit some with delays. Staff recommends completion of the first review under the Policy Coordination Instrument and modification of QTs for end-March and an establishment of end-September 2019 QTs.
December 18, 2018
Republic of Kosovo: 2018 Article IV Consultation-Press Release; and Staff Report
Description: The near-term outlook is broadly positive, with robust growth and low inflation. However, growth potential remains constrained by weak external competitiveness, high informality, low labor force participation, and a large infrastructure gap. In a complex political environment, the structural reform progress has been slow and fiscal risks have increased.
December 18, 2018
The Kingdom of the Netherlands-Aruba: Technical Assistance Report-Towards a Sustainable Tax System
Description: Over the last decade, Aruba has faced three recessions resulting in a public debt of approximately 90 percent of GDP. Its current budget deficit needs to be reduced and Aruba should close a fiscal gap of 1.5-2 percent of GDP over the next two to three years to return to a sustainable path. Earlier this year, the authorities have introduced a crisis package, mainly by increasing the turnover taxes. This temporary tax measure should be replaced by a tax reform that will modernize and simplify the current system. The new tax system should not only raise more revenue, but also shift the tax burden away from income and profits toward consumption. The current system is not well equipped to make these changes. In replacing the crisis levy, the Government sees an opportunity to streamline the current tax system, modernize it, and make it more sustainable for the future needs of Aruba.
December 18, 2018
Sierra Leone: Request for An Extended Arrangement Under the Extended Credit Facility-Press Release; Debt Sustainability Analysis; Staff Statement; and Statement by the Executive Director for Sierra Leone
Description: Sierra Leone is a fragile state. Since emerging from a decade-long civil war in 2001, the country has made notable economic progress but has also suffered occasional setbacks, such as the Ebola Virus Disease epidemic of 2014. A three-year ECF arrangement was approved June 2017 to help address Sierra Leone’s macroeconomic weaknesses—in particular, low revenue, elevated inflation, high public debt, and inadequate foreign exchange reserve buffers—which had been exacerbated by the Ebola crisis and a collapse in iron ore prices (Country Report No. 17/154). However, the program went off track shortly after approval as lackluster revenue performance and expenditure overruns led to a budget cash shortfall and a growing stock of budget arrears. With the authorities unable to take corrective actions ahead of the March 2018 presidential elections the first review of the program was put on hold. Since then elections have produced a new government, marking the first change of power in ten years. This government has taken a number of corrective actions over the last six months with the aim of reviving the program engagement with the IMF.
December 18, 2018
Angola: Request for An Extended Arrangement Under the Extended Fund Facility-Press Release; and Statement by the Executive Director for Angola
Description: The Government is implementing a (i) Macroeconomic Stabilization Program, which is focused on strengthening fiscal and debt sustainability; reducing inflation; promoting a more flexible exchange rate regime; improving financial sector stability; and addressing pressures on correspondent banking relationships; and (ii) National Development Plan for 2018–22 to address structural bottlenecks; and promote human development, public sector reform, economic diversification, and inclusive growth. The authorities also focus on improving governance and fighting corruption.