Country Reports
2016
July 20, 2016
Liberia: 2016 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Liberia
Description: This 2016 Article IV Consultation highlights that the Ebola epidemic and the fall in commodity prices have revealed the vulnerabilities of Liberia’s economy. After barely positive growth in 2014, GDP was flat in 2015 mainly owing to the decline in activity in the iron ore and rubber sectors. Although international gross reserves increased in 2015, the Central Bank of Liberia’s net foreign exchange position declined owing to operational deficits and exceptional support to the banking sector. In 2016, growth is expected to rise to 2.5 percent, thanks to a rebound in services and the start of gold production, while inflation should stay in the single digits.
July 19, 2016
St. Vincent and the Grenadines: 2016 Article IV Consultation-Press Release; Staff Report
Description: This 2016 Article IV Consultation highlights that St. Vincent and the Grenadines’ recovery from the global financial crisis was hampered by a series of natural disasters, sluggish global demand, and slow implementation of key infrastructure projects. Economic activity appears to have recovered in 2015, led by strong tourism inflows and a rebound in construction. Inflation has trended down owing to falling food and fuel prices. The new airport, now foreseen for completion in 2016, is expected to sustain the near- and medium-term economic growth. Real GDP is projected to expand by 2.2 percent in 2016 and reach 3.1 percent over the medium term.
July 18, 2016
Vietnam: 2016 Article IV Consultation- Press Release; Staff Report; and Statement by the Executive Director for Vietnam
Description: This 2016 Article IV Consultation highlights that Vietnam’s economy has experienced solid growth with low inflation, reflecting policy attention to maintaining macroeconomic stability. Economic performance was robust through most of 2015, driven by rapid export growth, foreign direct investment, and strong domestic demand. Manufacturing and exports moderated near year-end, reflecting slowing external demand. Inflation declined below 1 percent in 2015 before ticking upward in early 2016 owing to higher food and administered prices. For 2016, growth is projected to moderate to about 6 percent, reflecting the adverse agriculture shock, lower external demand, and spillovers of tighter global financial conditions.
July 15, 2016
Peru: 2016 Article IV Consultation-Press Release; and Staff Report
Description: This 2016 Article IV Consultation highlights that Peru has successfully navigated the commodity cycle and the 2008–09 global financial crisis, and still leads growth among large Latin American economies. Following a sharp and unexpected drop in 2014, growth picked up in 2015, reaching 3.3 percent largely owing to higher metals production and fishing, and a partial recovery in services and commerce. Peru is now positioned to grow faster in the next two years, as mining production reaches full capacity and large infrastructure projects advance. Inflation is expected to decline. Risks to the outlook are balanced, and downside risks are mostly on the external side.
July 15, 2016
Peru: Selected Issues
Description: This Selected Issues paper presents a comparative analysis of the macroeconomic adjustment in Chile, Colombia, and Peru to commodity terms-of-trade shocks. The study is done in two steps: (1) an analysis of the impulse responses of key macroeconomic variables to terms-of-trade shocks and (2) an event study of the adjustment to the recent decline in commodity prices. The experiences of these countries highlight the importance of flexible exchange rates to help with the adjustment to lower commodity prices, and staying vigilant in addressing depreciation pressures on inflation through tightening monetary policies. On the fiscal front, evidence shows that greater fiscal space, like that of Chile and Peru, gives more room for accommodating terms-of-trade shocks.
July 14, 2016
Iraq: First and Second Reviews of the Staff-Monitored Program and Request for a Three-year Stand-By Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Iraq
Description: This paper discusses Iraq’s First and Second Reviews of the Staff-Monitored Program (SMP) and Request for a Three-Year Stand-By Arrangement. The oil price decline has resulted in a massive reduction in Iraq’s budget revenue, pushing the fiscal deficit to an unsustainable level. The authorities are responding to the crisis with a mix of necessary fiscal adjustment and financing, maintaining their commitment to the exchange rate peg. The authorities started an SMP in November 2015 to establish a track record of policy credibility and pave the way to a possible IMF financing arrangement. Their performance under the SMP has been broadly satisfactory.
Notes: Also available in Arabic
July 13, 2016
The Bahamas: 2016 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for The Bahamas
Description: This 2016 Article IV Consultation highlights that economic growth in The Bahamas is estimated to have stalled in 2015, as a modest increase in air tourism arrivals was not sufficient to offset a contraction in domestic demand and weak exports of goods. Private consumption and investment were weighed down by headwinds from fiscal consolidation, as well as an end to construction. Inflation was moderate at 1.9 percent on average in 2015. Growth is expected to strengthen to about 0.5 percent in 2016, supported by continued growth in air tourist arrivals and moderating headwinds to private consumption and investment.
July 13, 2016
Russian Federation: Report on the Observance of Standards and Codes-IOSCO Objectives and Principles of Securities Regulation
Description: This paper presents an assessment of the level of implementation of the IOSCO (International Organization of Securities Commissions) objectives and principles in the Russian Federation. Some of the most recent regulatory changes in the Russian Federation are clearly based on international standards. In other areas, further initiatives will be required. These include conflicts of interest identification and improving standards of management in professional market participants. It will also require the creation of legal gateways which will enable supervisors with the necessary skills sets to provide guidance as to what the Central Bank of the Russian Federation’s (CBR) reasonable expectations are on a range of issues. CBR also faces a major challenge in enforcing the regulatory regime and will need additional resources.
July 13, 2016
Russian Federation: Report on the Observance of Standards and Codes-Basel Core Principles for Effective Banking Supervision
Description: This paper presents an assessment of the level of implementation of Basel Core Principles for Effective Banking Supervision in Russian Federation. The legal framework currently in place provides the Central Bank of the Russian Federation (CBR) with necessary powers and responsibilities. The Russian licensing regime for banks appears exhaustive. The legal and regulatory framework provides CBR with a set of instruments and tools to ensure that the licensing process is sound. CBR also has the power to review, reject, and impose prudential conditions on any proposals to transfer significant ownership or controlling interests held directly or indirectly in existing banks to other parties. However, the legal regime for major acquisitions in Russia is found to be weak.
July 13, 2016
Russian Federation: Staff Report for the 2016 Article IV Consultation-Press Release; and Staff Report
Description: This 2016 Article IV Consultation highlights that the Russian economy contracted by 3.7 percent in 2015 owing to falling oil prices and the quasi closure of international financial markets to Russian entities. The economic contraction is nonetheless shallower than previous recessions as a stronger external position and the authorities’ economic package cushioned the shocks, helped restore confidence and stabilized the financial system. Lower oil prices and needed fiscal adjustment will keep the economy in recession in 2016 with an expected decline in real GDP of 1.2 percent. Growth is expected to resume in 2017 and reach 1 percent, as domestic demand slowly recovers on the back of easing financial conditions and pent up demand.