Country Reports
2015
November 24, 2015
Mexico: Review Under the Flexible Credit Line Arrangement-Press Release; and Staff Report
Description: This paper discusses Mexico’s Review Under the Flexible Credit Line (FCL) Arrangement. Mexico has navigated successfully a complex external environment, characterized by falling commodity prices, a sharp appreciation of the U.S. dollar, and heightened volatility in international financial markets. The economy continues to grow at a moderate rate and inflation is close to the target. Looking ahead, activity should be supported by strengthening external demand and by the implementation of the structural reforms. The IMF staff’s assessment is that Mexico continues to meet the qualification criteria for access to FCL resources
November 24, 2015
Sierra Leone: Third and Fourth Reviews Under the Extended Credit Facility Arrangement and Financing Assurances Review, Requests for Waivers for Nonobservance of Performance Criteria and Modification of Performance Criteria, and Requests for Rephasing and Augmentation of Access Under the Extended Credit Facility-Press Release; and Staff Report
Description: This paper discusses Sierra Leone’s Third and Fourth Reviews Under the Extended Credit Facility Arrangement and Financing Assurances Review, Requests for Waivers for Nonobservance of Performance Criteria (PC) and Modification of PC. Program implementation has been good, notwithstanding the shocks that the economy has experienced. Despite missing several end-2014 PCs, owing to the Ebola outbreak, authorities have placed policies back on track. All end-June 2015 PCs, as well as most structural benchmarks, have been observed. The IMF staff supports the authorities’ requests for waivers, as well as for additional financing from the IMF.
November 20, 2015
Uganda: Fifth Review Under the Policy Support Instrument and Request for Waiver of an Assessment Criterion and Modification of Assessment Criteria-Press Release; and Staff Report
Description: This paper discusses Uganda’s Fifth Review Under the Policy Support Instrument (PSI) and Request for Waiver of an Assessment Criterion and Modification of Assessment Criteria. The economy of Uganda has fared well in a difficult environment. Program performance under the PSI was generally positive. All end-June and continuous quantitative assessment criteria were observed, with one exception, and so were most indicative targets. Inflation remained within the bands of the consultation clause. An unprecedented increase in tax revenue was a key achievement. However, further progress on structural reforms is needed. The authorities are rightly adjusting the policy mix. The IMF staff recommends completing the fifth review under the PSI.
November 19, 2015
Republic of Armenia: Second Review Under the Extended Arrangement and Request for Waivers of Nonobservance and Rephasing; Press Release; Staff Report; Supplement; and Statement by the Executive Director for the Republic of Armenia
Description: This paper discusses Armenia’s Second Review Under the Extended Arrangement and Request for Waivers of Nonobservance and Rephasing. Since late 2014, Armenia’s economic performance has been affected by significantly weaker external conditions, as the slowdown of the Russian economy, the weakening of the ruble, lower metals prices, and the strengthening of the dollar have led to pressures on external receipts, particularly remittances. Performance under the program has come under strain. Three performance criteria (PCs) were missed both at end-December 2014 and end-June 2015. The authorities are requesting waivers of nonobservance for the missed June and continuous PCs. The IMF staff supports completion of the review.
November 18, 2015
Nepal: 2015 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Nepal
Description: This 2015 Article IV Consultation highlights that the earthquakes in April and May and protests and trade disruptions following the promulgation of a new constitution in September have exacerbated the macroeconomic policy challenges facing the Nepalese economy. Real GDP growth is estimated to have decelerated to 3.4 percent in 2014/15 (mid-July 2014 to mid-July 2015) from 5.5 percent in 2013/14. Growth is expected to gradually rebound to about 5.5 percent by 2016/17, as economic activity recovers from the earthquake and reconstruction gains momentum. Inflation is projected to rise to about 8.5 percent over the next 12 months. The medium-term outlook depends importantly on the authorities’ reform efforts.
November 18, 2015
Papua New Guinea: Selected Issues
Description: This Selected Issues paper provides an overview of financial access and inclusion indicators, related causal factors, and both current and possible reform priorities for on Papua New Guinea (PNG). The paper presents indicators of financial market depth, development, and access for PNG and compares PNG’s performance against that of other countries in the region, at similar levels of development, and beyond. It provides an overview of country-specific challenges facing PNG related to financial inclusion that helps to explain its performance, as well as possible reform priorities in the near term. The government’s current initiatives aimed at promoting financial sector development and inclusion and their preliminary results are also discussed.
November 18, 2015
Dominica: Request for Disbursement Under the Rapid Credit Facility-Press Release; Staff Report; for Dominica
Description: This paper discusses Dominica’s Request for Disbursement Under the Rapid Credit Facility (RCF). Tropical Storm Erika had a devastating effect on Dominica’s economy. Total damage and loss is estimated at 96 percent of GDP. Real GDP is projected to decline by 3 percent in 2015, and reconstruction expenditures and the impact on agriculture and tourism activities are putting pressure on the fiscal and external accounts. Despite the high capital expenditures, the 2015 budget deficit will be contained to 2.4 percent of GDP reflecting strong grants, and the current account balance could deteriorate to a deficit of about 15 percent of GDP. The IMF staff supports the authorities’ request for a disbursement under the RCF.
November 18, 2015
Papua New Guinea: 2015 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Papua New Guinea
Description: This 2015 Article IV Consultation highlights that Papua New Guinea (PNG) is facing strong headwinds from lower global commodity prices. Although the commencement of liquefied natural gas (LNG) production has boosted overall GDP growth in 2014–15, the slow growth of the nonresource sector calls for a renewed policy focus on inclusive growth in the post-LNG construction period. Risks to the outlook are increasingly skewed to the downside. Fiscal consolidation necessitated by weaker-than-anticipated revenue performance will dampen nonresource growth over the short run, and a weak global economy could further dampen external demand and commodity prices.
November 17, 2015
Iceland: Technical Assistance Report-Optimal Reform and Distributional Analysis of the Personal Income Tax
Description: This paper discusses key findings and recommendations of the Technical Assistance Report on Optimal Reform and Distributional Analysis of the Personal Income Tax (PIT). With regard to reforming the PIT schedule, it recommends that the basic credit be increased and made fully refundable to all taxpayers age 18 and older. To avoid paying this benefit to young singles, such as students, who generally have other means of support, it could be conditioned on a certain level of labor earnings. This credit should be rapidly phased out as labor income rises, and the initial PIT rate should be significantly reduced. The current top PIT rate does not need reform, although the threshold for that rate should ideally be raised.
November 17, 2015
Finland: 2015 Article IV Consultation-Press Release; Staff Report; Informational Annex; and Statement by the Executive Director for Finland
Description: This 2015 Article IV Consultation highlights that Finland’s exports have suffered owing to the declines of Nokia and the paper industry, compounded by weak external demand, especially from the euro area and Russia. The current account and fiscal balances have deteriorated, with the 2014 fiscal deficit breaching the Stability and Growth Pact’s 3 percent of GDP criterion. A modest recovery is projected to begin in 2015 and gradually strengthen in 2016. However, in absence of further reforms, growth is likely to remain much lower than pre-crisis. Weaker-than-expected growth in key trade partners would be a drag on exports, and spillovers from an external financial shock would create tighter financial conditions, with negative effects on output.