Country Reports

September 3, 2015

Former Yugoslav Republic of Macedonia: Selected Issues

Description: This Selected Issues paper analyzes export competitiveness in the Former Yugoslav Republic of Macedonia (FYR Macedonia). Export performance in FYR Macedonia has been strong over the last decade, critically contributing to overall growth. Exports have been re-oriented toward new products with higher technological content, allowing for the build-up of revealed comparative advantages in these products. The analysis based on Constant Market Share analysis shows that the overall competitiveness gap of FYR Macedonia with respect to other emerging European countries has narrowed. There appears to be significant room for quality improvement, including for the most successful export products. Although the contribution of exports to GDP growth has been significant, spillover into the domestic tradable sector from the foreign investment led export sector remains limited so far.

September 3, 2015

Republic of Kazakhstan: 2015 Article IV Consultation-Press Release; Staff Report for the Republic of Kazakhstan

Description: This 2015 Article IV Consultation highlights that against the backdrop of external shocks, economic growth and inflation in Kazakhstan have decelerated. Financial conditions have tightened, and external imbalances are emerging. Real GDP growth slowed to an annualized 2 percent during the first quarter of 2015, down from about 4 percent in 2014 and 6 percent in 2013. In addition to weaker external demand, slower growth was driven by the impact of lower income and profitability and confidence effects on private consumption and domestic investment. Real GDP growth is projected to decelerate to 2 percent in 2015, owing to weaker demand from Russia and China, lower oil prices, confidence effects, and continuing delays in the Kashagan oil field.

Notes: Also Available in Russian

September 3, 2015

Zambia: Technical Assistance Report-Towards an Integrated Legal Framework for Public Financial Management

Description: This Technical Assistance report proposes a roadmap for completing the process of drafting and adopting an Integrated Legal Framework for Public Financial Management (PFM) in Zambia. The legal framework for PFM in Zambia is fragmented, and much of it is outdated. The government has prioritized a revision of the existing legal framework for PFM and national development planning. This revision will permit a range of important PFM reforms that are ongoing or planned to be incorporated within the legal framework. An updated legal framework would also permit other important improvements in current practices to be incorporated.

September 3, 2015

Former Yugoslav Republic of Macedonia: 2015 Article IV Consultation - Press Release; Staff Report; and Statement by the Executive Director for Former Yugoslav Republic of Macedonia

Description: This 2015 Article IV Consultation highlights that the economic recovery of Former Yugoslav Republic of Macedonia has strengthened. Real GDP growth accelerated to 3.8 percent in 2014, from 2.7 percent in 2013. Strong growth was attributed to double-digit growth in investment driven by activities in the Technological Industrial Development Zones and public infrastructure, as well as strong private consumption supported by robust credit growth and improving labor market conditions. GDP growth in 2015 is expected to moderate to 3.2 percent, with significant downside risks. A derailment of recent political agreement could negatively impact economic sentiment and growth.

August 20, 2015

Hungary: Technical Assistance Report—Operational Aspects of Establishing an Asset Management Company

Description: This Technical Assistance report examines Operational Aspects of Establishing an Asset Management Company. In November 2014, the Magyar Nemzeti Bank (MNB) established the Magyar Reorganizációs és Követeléskezelo (MARK), an asset management company. This step was taken to help restore monetary transmission, credit growth, and economic recovery. The MNB has established MARK on a sound foundation: banks’ participation is voluntary, market prices determine valuations, and MARK’s lifetime is 10 years. MARK has a clear, well-defined mandate to focus on maximizing the value of its assets. This is supported by an ambitious return on equity and a valuation methodology based on market prices.

August 19, 2015

Panama: Staff Report for the 2015 Article IV Consultation

Description: This 2015 Article IV Consultation highlights that Panama’s economic performance is expected to remain strong. Real GDP slowed to 6.2 percent in 2014, reflecting a slower pace of public investment, continued weakness in Colón Free Zone activity, and delays in the Canal expansion. Growth is expected to remain stable in 2015. Lower oil prices and the U.S. recovery will be positive forces but these factors will be offset by U.S. dollar appreciation and some lags in new public investment. Over the medium term, the expanded Canal and the new copper mine should help maintain growth at 6–7 percent.

August 19, 2015

Panama: Selected Issues

Description: This Selected Issues paper assesses risks in the Panamanian banking sector. The analysis suggests that Panama’s banking system seems able to withstand reasonably severe shocks, while contagion risks stem primarily from foreign banks. Ample starting capital buffers and bank profitability prevent translation of higher loan defaults under stress into materially impair capital adequacy ratios. Reverse engineering the exercise to gauge what it would take to erase one-fourth of system capital reveals that the shock would need to be not only unprecedented, but also extremely large. In terms of contagion, while failures of both domestic and foreign banks would result in significant capital losses for Panamanian banks, the risk of contagion propagation is much higher in the case of the latter.

August 18, 2015

Iraq: Staff Report for the 2015 Article IV Consultation and Request for Purchase Under the Rapid Financing Instrument

Description: This 2015 Article IV Consultation highlights that Iraq is facing a double shock emerging from the ISIS insurgency and the plunge in global oil prices. In 2014, real GDP contracted by 2.1 percent mainly owing to the impact of the conflict, while oil production and exports increased slightly compared with 2013. In 2015, overall economic activity is expected to see a modest recovery of 0.5 percent thanks to oil sector expansion, while non-oil activity is expected to contract further. Medium-term growth prospects remain positive, though less favorable than before the crisis. Growth will be driven by the projected ramp-up in oil production and the rebound in non-oil growth supported by the expected improvement in security and implementation of structural reform.

Notes: Also available in Arabic

August 18, 2015

Iraq: Selected Issues

Description: This Selected Issues paper focuses on the Iraqi oil sector and analyzes the developments and prospects after the twin shock. The Iraqi economy was affected by the two major challenges during 2014—ISIS insurgency and the fall in global oil prices. Iraq’s oil sector has performed well despite the security challenges that emerged after the onset of the ISIS insurgency in June 2014. On average, Iraq earned $97 per barrel on oil exported in 2014. Asia remained the leading destination of the Iraqi oil exports during 2013–14, and its share increased from 50 percent in 2012 to 65 percent in 2014.

Notes: Also available in Arabic

August 14, 2015

People’s Republic of China: Staff Report for the 2015 Article IV Consultation

Description: This 2015 Article IV Consultation highlights that China is transitioning to a new normal, with slower-yet-safer, more sustainable growth. Growth in 2014 fell to 7.4 percent and, in 2015, is forecast to slow further to 6.8 percent on the back of slower investment, especially in real estate. The labor market has remained resilient despite slower growth, as the economy pivots toward the more labor-intensive service sector. Considerable progress has been made in external rebalancing. The current account surplus fell to 2.1 percent in 2014 from the peak of about 10 percent in 2007, and the renminbi has appreciated by about 10 percent since 2014 in real effective terms. Further progress has also been made on domestic rebalancing.

Notes: Also available in Chinese