Country Reports
2018
February 22, 2018
Bosnia and Herzegovina: Technical Assistance Report-Government Finance Statistics
Description: This Technical Assistance Report discusses the findings and recommendations made by the IMF mission about improving government finance statistics (GFS) for decision making in the Republic of Srpska (RS), Bosnia and Herzegovina. The future delineation of tasks and responsibilities in the Bosnia and Herzegovina GFS compilation process between the Agency for Statistics of Bosnia and Herzegovina (BHAS), Central Bank of Bosnia and Herzegovina (CBBH), Ministry of Finance RS, and Republic of Srpska Institute of Statistics is still open. The current TA can assist the RS authorities to compile aggregated RS level GFS data. Together with comprehensive methodological explanations, comprehensive process tables, and the free flow of GFS relevant data, this should allow CBBH and BHAS to compile consolidated data for Bosnia and Herzegovina.
February 22, 2018
Portugal: Sixth Post-Program Monitoring Discussions-Press Release; Staff Report
Description: This paper presents an overview of the Sixth Post-Program Monitoring Discussions with Portugal. The Portuguese economy has strengthened. Supported by a benign external environment, job-rich growth has gathered momentum since late 2016. The headline fiscal balance continued to benefit from stronger growth, controlled budget execution, and falling interest costs, with the 2017 deficit target of 1.4 percent of GDP likely to have been met with some margin. Financial stability has also improved with various bank capital augmentations and the sale of Novo Banco in 2017. Growth is projected at 2.2 percent in 2018. Downside risks in the near term are mostly external in nature and appear moderate.
February 22, 2018
Kyrgyz Republic: Fourth and Fifth Reviews under the Three-Year Arrangements under the Extended Credit Facility, and Request for Modification of Performance Criteria-Press Release; Staff Report
Description: This paper discusses Kyrgyz Republic’s Fourth and Fifth Reviews Under the Three-Year Arrangement Under the Extended Credit Facility, and Request for Modification of Performance Criteria (PCs). Program performance has been mixed. All end-December 2016 and end-June 2017 quantitative PCs, and all but three indicative targets (ITs) were met. The December 2016 IT on tax revenue, the continuous IT on introducing new or renewing existing tax exemptions, and the June 2017 IT on reserve money were not observed. Six structural benchmarks were missed, of which five were proposed to be postponed or modified at the time of the fourth review. Resuming the reform agenda and pursuing consolidation efforts are essential to allow growth to reach its potential over the medium term.
February 21, 2018
Bulgaria: Selected Issues
Description: This Selected Issues paper investigates the role of debt overhang in explaining weak nonfinancial corporate (NFC) investment in Bulgaria using firm-level data. The study confirms a negative association between measures of debt overhang and investment for Bulgarian NFCs using firm-level data. Bulgaria’s NFCs are the most leveraged among new member states. The findings suggest that high NFC debt overhang could be an important drag on investment. While credit demand is likely to pick up in line with economic activity, high NFC indebtedness could continue to stand in the way of corporate credit recovery. A possible direction for future work is to investigate the existence of different investment cycles across business activities/sectors, and their role in explaining the identified negative relationship. Policies that help reduce the corporate debt overhang could help boost credit and growth. Policy initiatives such as an efficient corporate debt restructuring framework and tax measures could help corporate deleveraging. The findings suggest that high corporate debt could be an important drag on investment.
February 21, 2018
Bulgaria: 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Bulgaria
Description: This 2017 Article IV Consultation highlights that the Bulgarian economy is performing well. Growth has been on an upward trend and is estimated to reach 3.8 percent in 2017 and 2018, driven by strong exports, easier financial conditions, and growing confidence. The current account remained in surplus in 2017, despite rapid wage growth. The economy shows signs of a closing output gap. Headline inflation turned positive in 2017 and inflationary pressure is rising. Fiscal outcomes have been stronger than budgeted in recent years, reflecting mainly revenue overperformance and under-execution of capital spending. The main challenge is to translate this recent recovery into sustained and inclusive growth and convergence with other European Union countries.
February 21, 2018
Dominican Republic: Technical Assistance Report-Balance of Payments Statistics and International Investment Position (April 27-May 1, 2015)
Description: This Technical Assistance Report discusses the findings and recommendations made by the IMF mission regarding the balance of payments and international investment position in Dominican Republic. The Central Bank of the Dominican Republic has made considerable progress in disseminating external sector statistics. It will soon disseminate monthly the international reserves and foreign currency liquidity data template to the IMF and data for Table 6 (Gross External Debt Position: by Sector) in the Quarterly External Debt Statistics to the World Bank. Much progress has also been made on the project to compile data on manufacturing services on inputs owned by others.
February 20, 2018
Australia: Selected Issues
Description: This Selected Issues paper on Australia discusses prospects and ramifications of China’s economic transition. Australia and China have strong linkages that are growing over time as China carries on with its economic transition. Trade in commodities and services are constantly growing. Australia has established itself as a dominant player in some key Chinese import needs, particularly for steel. The stylized facts also demonstrate that the rest of Asia is increasingly important for Australia. The charts for tourism, education, and the destination of exports illustrate that both advanced and emerging Asia already have a growing impact. The paper shows that the rest of Asia’s trade linkages with Australia are similar in size to the linkages between Australia and China. China may be Australia’s largest trading partner, but the rest of Asia is also a rapidly growing region, with potential markets for Australian expansion.
February 20, 2018
Australia: 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Australia
Description: This 2017 Article IV Consultation highlights that Australia has enjoyed a comparatively robust economic performance while adjusting to the end of the commodity price and mining investment booms of the 2000s. The recovery from these shocks has advanced further in 2017. Aggregate demand has been led by strong public investment growth amid a boost in infrastructure spending and private business investment has picked up, but private consumption growth has remained subdued. Employment growth has strengthened markedly over the year, although the economy is not yet back at full employment. Wage growth is weak and inflation is below its target range. The macroeconomic policy stance has become more supportive with the infrastructure investment boost.
February 13, 2018
Republic of Korea: Selected Issues
Description: This Selected Issues chapter outlines a strategy to facilitate this and navigate the more challenging monetary environment, involving enhanced communication of policy interest rate intentions and inflation-forecast targeting. The reduction in the inflation target by a percentage point to 2 percent in January 2016 weakened the nominal anchor. Monetary policy can play a role rebuilding the credibility of the anchor more rapidly through the adoption of inflation-forecast targeting. This strengthening of the monetary policy framework involves enhancing communications. An effective, credible monetary policy cannot address all macroeconomic challenges facing Korea. Rather, it can foster robust growth with low inflation, providing a stable and predictable environment that allows other policies to work more effectively. These other policies play a complementary role. Fiscal policy can reinforce the effectiveness of monetary policy, as illustrated by model scenarios. Structural policies can also support monetary policy by, for example, boosting potential growth.
February 13, 2018
Republic of Korea: 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Korea
Description: This 2017 Article IV Consultation highlights that the Republic of Korea’s near-term outlook is improving. After slowing in the second half of 2016, growth has picked up in 2017, while recent geopolitical tensions have had a limited impact. The rebound was led by a strong expansion in investment, especially in the information technology and construction sectors. Export growth strengthened thanks to improving external conditions and high global demand for semiconductors. Private consumption growth picked up, but remains below economic growth. Recovery has been supported by an accommodative monetary policy, with lending rates and long-term yields close to record lows.