Country Reports

January 20, 2016

Malta: Selected Issues

Description: This Selected Issues paper uses a multivariate filter approach to reassess potential output for Malta, given national account data revisions and the ongoing labor market changes. The analysis reveals that the impact of the global financial crisis on potential growth has been short-lived. The analysis of the sources of potential growth reveals that weak total factor productivity growth performance and sizeable investment declines post-global financial crisis have been more than compensated by significant gains in potential employment. Potential employment growth has been the key driver of potential growth in recent years, reflecting growing working age population, and rising labor force participation, particularly among women, albeit starting from low levels.

January 19, 2016

Ireland: Fourth Post-Program Monitoring Discussions-Press Release; and Staff Report

Description: This paper focuses on Ireland’s 2015 Fourth Post-Program Monitoring Discussions. Ireland’s economy continues to improve at a robust pace. Real GDP expanded by 7 percent year-over-year over the first three quarters of 2015, with investment providing the largest contribution to growth followed by private consumption. High frequency indicators suggest that the strong economic momentum continued into the last months of 2015. Exchequer data for December indicate that 2015 revenues significantly exceeded the initial budget profile, whereas spending recorded a modest increase, leading to a likely outperformance of IMF staff’s estimate of the 2015 general government deficit.

January 19, 2016

People’s Republic of China—Hong Kong Special Administrative Region: 2015 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for People’s Republic of China—Hong Kong Special Administrative Region

Description: This 2015 Article IV Consultation highlights that the growth of Hong Kong Special Administrative Region is expected at 2.25 percent in 2015, with domestic demand acting as the principal source of momentum. Growth is likely to pick up modestly to 2.5 percent in 2016, with a smaller drag from external demand reinforcing resilient domestic demand. Inflation has declined and is expected to remain below 3 percent in 2015–16 on softer commodity prices. The current account has dropped to about 2.5 percent of GDP, but is projected to improve to about 3.5 percent over the medium term as the global economy recovers.

January 15, 2016

Albania: Fiscal Transparency Evaluation

Description: This paper discusses key findings of the fiscal transparency evaluation for Albania. Many of the fundamental elements of fiscal transparency are now in place. The budget clearly shows the government’s forecasts of revenue and its plans for spending and for financing the deficit. The budget is detailed, showing spending on each of several hundred government programs. Reports on the implementation of the budget are frequent, timely, and comprehensive. Basic data on revenue and spending are published monthly, usually no more than 20 days after the end of the month. Quarterly and annual reports give more detailed information. There are even daily reports listing each government payment.

January 14, 2016

Slovak Republic: 2015 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Slovak Republic

Description: This 2015 Article IV Consultation highlights that Slovakia remains among Europe’s stronger economies, with growth continuing to pick up in 2015, driven by strong domestic demand. A push to spend expiring European Union funds has underpinned rising investment while job creation and real wage growth have supported private consumption. Unemployment has fallen significantly since 2013, but is still about 11 percent overall, and is much higher for the long-term unemployed, youth, and women. The outlook is favorable with growth of 3–3.5 percent expected through the medium-term, reflecting sustained domestic demand as well as further contributions from the important export sector as substantial additional foreign auto sector investment is planned.

January 14, 2016

Seychelles: Third Review Under the Extended Arrangement and Request for Modification of Performance Criteria-Press Release; and Staff Report

Description: This paper discusses Seychelles’ Third Review Under the Extended Arrangement and Request for Modification of Performance Criteria (PC). All PCs for end-June 2015, the program’s third test date, were met. Based on preliminary data, all the third-quarter indicative targets were also met. The structural agenda is proceeding, albeit with some delays. Growth for 2015 has been revised upward to slightly more than 4 percent. Presidential elections are taking place during December 3–5. The IMF staff recommends completion of the third review under the Extended Arrangement and modification of the PCs for end-December 2015.

January 14, 2016

Slovak Republic: Selected Issues

Description: This Selected Issues paper examines the need of reformation of the Fiscal Responsibility Act (FRA) in the Slovakia. It is suggested that in light of experience gathered so far, FRA modifications should be considered. Clear guidelines regarding a cost-effective cash management strategy should be established. Debt brake level should be kept at the current limits, rather than lowered over time, to avoid unduly eroding fiscal space. Policies should aim to maintain a safe margin below debt thresholds to allow fiscal policy to play a counter-cyclical role in the future during downturns. Adjustment measures should be more gradual and the bias toward spending cuts should be lessened or removed.

January 13, 2016

Republic of Poland: Review Under the Flexible Credit Line Arrangement-Press Release; Staff Report; and Statement by the Alternate Executive Director for the Republic of Poland

Description: This paper discusses Poland’s performance under the Flexible Credit Line Arrangement. In recent years, Poland’s macroeconomic policies have focused on further strengthening fundamentals and institutional frameworks. Fiscal consolidation has led to an exit from the Excessive Deficit Procedure. Monetary policy has been eased to help lift inflation. Financial sector supervision has been strengthened with a new macroprudential framework. Reserves are broadly adequate against standard metrics. The new government has pledged to maintain prudent policies, including gradual fiscal consolidation over the medium term, and to ensure the continued stability of the banking system. In the period ahead, it will be important to identify specific growth-friendly measures to underpin the fiscal adjustment and reduce implementation risk.

January 12, 2016

Pakistan: Selected Issues Paper

Description: This Selected Issues paper reviews Pakistan’s tax regime, evaluates the level and composition of tax revenues, and estimates tax buoyancy and efficiency. Despite recent progress under the program, Pakistan’s tax revenue remains very low relative to comparator developing countries and the tax effort expected for the country’s level of development. This reflects narrow tax bases, overgenerous tax concessions and exemptions, weak and fragmented revenue administrations, and structural features of the economy. The findings suggest that unlocking tax revenue potential requires broadening tax bases, strengthening revenue administration and taxpayer compliance, eliminating distortionary tax expenditures, and rationalizing tax policy for greater efficiency and equity through a comprehensive and front-loaded reform agenda.

January 12, 2016

Iraq: Staff-Monitored Program-Press Release; and Staff Report

Description: This paper discusses the Iraqi authorities’ request for a Staff-Monitored Program (SMP). The authorities have requested an SMP to establish a track record of policy credibility to pave the way to a possible IMF financing arrangement. Under the SMP, the authorities will implement fiscal consolidation that will contain public expenditure in line with available revenue and financing, and aim to reduce the non-oil primary deficit by US$20 billion or 12 percent of non-oil GDP between 2013 and 2016. Under the SMP, agreement has also been reached on measures to strengthen public financial management, anti-money laundering and countering the financing of terrorism, and financial sector stability.

Notes: Also available in Arabic