Country Reports
2018
June 29, 2018
Union of the Comoros: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Union of the Comoros
Description: This 2018 Article IV Consultation highlights that the Comorian economy’s performance improved in 2017. Growth is estimated at 2.7 percent for 2017, half a percentage point higher than in the previous year. A combination of factors contributed to this outcome, notably an improved electricity situation relative to 2016, increased exports, and stronger remittances flows. However, the economy was held back by a perceived deterioration in the business climate and tensions in the financial sector. Inflation remained moderate. The near-term outlook remains challenging in the absence of further reform efforts. The authorities’ reform agenda and investment plans, undertaken in the context of their revised strategic development plan will help raise potential growth rates going.
June 29, 2018
Union of the Comoros: Selected Issues
Description: This paper examines Comoros’ weak domestic revenue and volatile windfall revenues. Weak revenue mobilization and the reliance on volatile one-off windfall gains remains a significant development challenge for Comoros. Weak revenue mobilization not only makes it more difficult for Comoros to finance its significant development needs, but also increases the budget’s reliance on uncertain and volatile one-off revenue streams. Sustainably improving revenue mobilization based on realistic and attainable budgetary targets, is key for financing Comoros’ medium to long-term development goals without endangering debt sustainability. Broadening the tax base and thereby increasing the tax ratio to develop more predictable budgetary financing sources will aid execution of Comoros’ ambitious investment program that underpins the country’s development strategy.
June 28, 2018
Georgia: 2018 Article IV Consultation, Second Review under the Extended Fund Facility Arrangement, and Request for Modification of a Quantitative Performance Criterion – Press Releases; Staff Report; and Statement by the Executive Director for Georgia
Description: This 2018 Article IV Consultation highlights that the macroeconomic performance in Georgia since the global financial crisis has been positive. Growth was higher than that in most peers. The banking sector has remained stable, and foreign reserves have increased. After two years of sluggish growth, following the 2014 regional slowdown, growth has picked up and the external position strengthened. Supported by external demand and buoyant consumption, real GDP grew 5 percent in 2107. The near-term outlook has improved moderately and the output gap is expected to close gradually in 2019–20. Over the medium to long term growth is expected to accelerate moderately and external vulnerabilities to decrease, thanks to the dividends from structural reforms.
June 28, 2018
Georgia: Selected Issues
Description: This Selected Issues paper assesses macroeconomic and structural reforms in Georgia. The government’s reform package includes a fiscal policy within a declining deficit path which intends to incentivize private investment, a scaling up of public investment, improvement in government’s efficiency, and an education reform. Based on modeling analysis, the implementation of this package will provide significant benefits to the economy. Over the long term, real GDP is estimated to be about 5 percent higher than in the baseline and—in the path toward the new equilibrium—annual growth about 0.7 percentage points higher over the medium term. The education reform has sizeable effects, but they only come into effect in the long term.
June 28, 2018
Ireland: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Ireland
Description: This 2018 Article IV Consultation highlights that the Irish economy continues to grow at a rapid pace, well above the European Union average. Although headline data are distorted by the volatility of multinationals’ activity, the broad recovery of (modified) domestic demand (4 percent in 2017) underpins the expansion. Strong labor market performance brought the unemployment rate down to below 6 percent by April 2018. Although wage pressures emerged in some sectors, inflation remained subdued, mainly reflecting the pass-through of pound sterling depreciation. Public finances continued to improve on the back of strong output growth, while the public debt burden declined slightly to 68 percent of GDP. The outlook remains broadly positive but with externally-driven downside risks.
June 28, 2018
Ireland: Selected Issues
Description: This Selected Issues paper estimates the cyclical position of the Irish economy. Assessing the business cycle in Ireland is complicated by the open character of its labor market and large presence of globally active multinationals. However, analysis suggests that the Irish economy is in the midst of a cyclical upswing. All methods suggest a positive output gap in 2017, while the labor market shows signs of upward wage pressures, as net immigration has been weak so far. These signs are consistent with a cyclical upswing, amid strong estimated potential output growth, and point to risks of a boom-bust cycle, should the economy continue to push the growth momentum.
June 28, 2018
The Gambia: Second Review Under the Staff-Monitored Program - Press Release and Staff Report for The Gambia
Description: This paper discusses The Gambia’s Second Review Under the Staff-Monitored Program (SMP). The program is broadly on track. All quantitative targets for end-December 2017 and end-March 2018 were met as were most of the structural benchmarks, with three of them needing to be re-phased and redefined. However, the continuous target on contracting new nonconcessional external debt was breached, owing to a US$25 million loan. The IMF staff supports the completion of the second review under the SMP. The IMF staff also encourages the authorities to ensure macroeconomic stability and step up the pace of structural reforms to strengthen economic governance and tackle the legacy of debilitating public debt to pave the way for a possible Extended Credit Facility arrangement.
June 27, 2018
Austria: Fiscal Transparency Evaluation
Description: This paper evaluates the state of fiscal transparency in Austria. Austria has built strong fiscal institutions over the past decade, notably through the budget reforms introduced in 2009 and 2013, which have significantly improved fiscal transparency. Many elements of sound fiscal transparency practices are in place in Austria. Fiscal reports, covering a substantial part of public activities, are published in a frequent and timely manner and include reconciliations between alternative measures of fiscal aggregates. Budgets and forecasts have a clearer medium-term and performance-oriented focus, and are guided by clear fiscal policy objectives, the compliance with which is subject to independent scrutiny. In addition, there is regular, high-quality reporting on the long-term sustainability of public finances.
June 26, 2018
Czech Republic: Selected Issues
Description: This Selected Issues paper examines the state of labor supply in the Czech Republic. The Czech working age population is projected to decline. This has important implications for labor supply and long-term growth. Policies to increase participation rates and retirement age are important and can mitigate the decline in labor force, but are unlikely to offset it. Under a combined moderate policy improvement scenario, the labor force is expected to decline by 3 percent in 2030 and 15 percent in 2050. Under the very optimistic (hence less likely) scenario, the labor force would increase by 3 percentage points by 2030, but then start to decline later with a gap of 8 percent by 2050.
June 26, 2018
Czech Republic: 2018 Article IV Consultation - Press Release; Staff Report; and Statement by the Executive Director for the Czech Republic
Description: This 2018 Article IV Consultation highlights that Czech Republic’s growth has been strong, broad-based and job rich. The economy grew at 4.4 percent in 2017, led by strong domestic demand. The unemployment rate fell to a record low of 2.3 percent in April 2018, even with increased participation. Meanwhile, headline and core inflation are close to the target of 2 percent. Growth is projected to remain strong this year, at 3.7 percent, but labor shortages are putting constraints on future growth. In the near term, a decline in global trade is a major risk for a small economy highly dependent on external demand, particularly from the euro area, but also indirectly from other regions given how tightly integrated is the Czech economy into supply chains.