Country Reports
2016
February 12, 2016
Austria: Selected Issues
Description: This paper reviews two main issues pertaining to Austrian economy: (1) Austria's long-term fiscal sustainability in light of current tax and expenditure trends, and (2) Austria's macroeconomic challenges and opportunities due to immigration. To maintain fiscal sustainability over the longer run, Austria needs to implement a strategy based on structural expenditure consolidation. Attention to the structure of Austrian taxes and expenditure is germane because this displays important differences vis-á-vis European peers. In 2015, Austria has recorded about 90,000 asylum applicants, making it one of the top three host countries relative to its population. Austria attracts immigrant populations that improve the characteristics of its labor force.
February 12, 2016
Austria: 2015 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Austria
Description: The 2015 Article IV Consultation discusses the key issues related to the economy of Austria. Austria has recovered from the global financial crisis, but the crisis still remains in bank and public sector balance sheets. Major banks have been striving to strengthen their capital and profitability positions amid regulatory and supervisory reforms. Despite lackluster growth, economic slack is limited as potential growth has fallen as well. The governing coalition of Social Democrats and the right-of-center People's Party holds a constructive dialogue on economic policy issues. Growth is estimated at 0.7 percent in 2015, a slight improvement over the ½ percent average in 2012–14, on the back of strengthening external and domestic demand.
February 11, 2016
Kingdom of the Netherlands—Netherlands: Selected Issues
Description: This paper aims to contribute to the discussion by sketching ways in which the taxation equity-efficiency frontier could be shifted outward in the Netherlands. In a nutshell, we argue that significant efficiency gains could be achieved by shifting the tax burden away from labor, and toward consumption and capital—especially housing. The detrimental impact of the tax-benefit system on labor supply—in particular by mothers—and the insufficient and distortionary use of the value-added tax (VAT) as a revenue-collection mechanism is also highlighted in the paper. This paper also reviews the main features of the Dutch tax system and sketches the contours of a hypothetical tax reform.
February 11, 2016
Islamic Republic of Afghanistan: Ex Post Assessment of Longer-Term Program Engagement
Description: The Ex Post Assessment aims to provide a frank review of progress during the 2006 and 2011 programs, and a forward-looking assessment that takes into account lessons learned. It begins by providing the background and context for the two programs. It then discusses their overall objectives, how the programs were designed to achieve these objectives, and program performance. After outlining the key issues, it concludes with some lessons, including for Afghanistan's future engagement with the IMF. Since late 2001, after NATO forces toppled the Taliban, the country received unprecedented support from the donor community in the context of two IMF-supported programs.
February 11, 2016
Tunisia: Selected Issues
Description: This paper discusses recent trends, constraints, and opportunities for the future of Tunisia's economy. Tunisia enjoyed solid GDP growth rates in the run-up to the revolution of 2011, driven by the manufacturing and service sectors. A stable macroeconomic environment and a gradual liberalization of trade and investment facilitated growth. Labor has been gradually overshadowed by capital accumulation as the main growth driver, while productivity has been lagging. The existing gap in factors of production can be filled by appropriate financial and banking policies to increase access to finance and boost physical capital accumulation, a sound business environment to attract investors and boost long-term productivity, and a reduction in macroeconomic risks.
February 11, 2016
Kingdom of the Netherlands: 2015 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Kingdom of the Netherlands-Netherlands
Description: This paper presents the overview of the Dutch economy. After a double-dip recession that ended in early 2014, a strengthening but moderate recovery led by exports and investment is underway, although lower production and exports of natural reduced gas reduced growth in the second quarter of 2015, without however interrupting its momentum. Unemployment is falling slowly and inflation is low, but positive. Credit has continued to decline, but demand for credit is gradually rebounding. The Dutch banking system is emerging from its restructuring. The economy now appears set on a gradual path of recovery, and growth is expected to reach 1.9 percent this year and in 2015, supported by an improving domestic demand.
February 10, 2016
Italy: Report on the Observance of Standards and Codes on FATF Recommendations for Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT)
Description: This paper provides a summary of the anti-money laundering/combating the financing of terrorism (AML/CFT) measures in place in Italy and of the level of compliance with the Financial Action Task Force 40 (FATF 40) recommendations and the level of effectiveness, and contains recommendations on how the AML/CFT system could be strengthened. The assessment is based on the information available at the time of the mission from January 14–30, 2015, and other verifiable information subsequently provided by the authorities. It was conducted using the 2013 assessment methodology. The Detailed Assessment Report on which this document is based was adopted by the FATF Plenary on October 22, 2015.
February 10, 2016
Italy: Detailed Assessment Report on Anti-Money Laundering and Combating the Financing of Terrorism
Description: This report provides a summary of the anti-money laundering and combating the financing of terrorism (AML/CFT) measures in place in Italy as at the date of the onsite visit. It analyzes the level of compliance with the Financial Action Task Force recommendations and the level of effectiveness of Italy's AML/CFT system, and provides recommendations on how the system could be strengthened. Italy has a mature and sophisticated AML/CFT regime, with a correspondingly well-developed legal and institutional framework. Law enforcement agencies access, use, and develop good quality financial intelligence. Financial sector supervisors have been using a risk-based approach to varying degrees, but their supervisory tools could be improved.
February 9, 2016
Republic of Tajikistan: Financial System Stability Assessment Report
Description: This paper highlights Tajikistan's macroeconomic environment and gives an overview of the financial sector and its stability, and discusses its regulatory, supervisory, crisis prevention, and management framework. The economy of Tajikistan is entering a downturn, and the banking sector is showing substantial weakness. GDP growth has been on a declining trend. Inflation is also projected to rise further. The external position continues to deteriorate, putting pressure on the somoni and eroding already low external buffers. The financial sector of Tajikistan is dominated by banks, which account for 84 percent of total financial sector assets. Dollarization in the financial sector has been increasing and remains a challenge for foreign exchange risk and credit risk management.
February 8, 2016
Morocco: Financial System Stability Assessment
Description: This paper assesses financial sector vulnerabilities, the policy oversight framework, bank resolution, and financial safety nets. The assessment is intended to help Moroccan government identify key sources of systemic risk in the financial sector and implement policies to enhance its resilience to shocks and contagion. Since the 2007 Financial Sector Assessment Program update, Morocco's financial system has grown in size and complexity, with increased links between the banking and insurance sectors and a significant expansion into sub-Saharan Africa. Although banks are adequately capitalized and profitable, with stable funding, they are vulnerable to large corporate defaults and deposit withdrawals. But the new banking law has helped in strengthening the banking sector.