Country Reports
2015
August 4, 2015
Republic of Mozambique: Fourth Review Under the Policy Support Instrument and Request for Modification of Assessment Criteria—Press Release; Staff Report; and Statement by the Executive Director for the Republic of Mozambique
Description: This paper discusses Republic of Mozambique’s Fourth Review Under the Policy Support Instrument (PSI) and Request for Modification of Assessment Criteria. Although program performance at end-2014 was mixed, the implementation of the structural reform agenda has improved, and the new government has expressed strong commitment to program implementation, including through strong policy adjustment, credible corrective measures, and new steps to improve fiscal transparency. Maintaining fiscal discipline over the medium term through a more prudent debt management strategy will be essential to preserve debt sustainability. The IMF staff recommends the completion of the fourth PSI review.
Notes: Also available in Portuguese
August 4, 2015
United Arab Emirates: Selected Issues
Description: This Selected Issues paper discusses measures to strengthen fiscal policy and budget frameworks in the United Arab Emirates (UAE). It provides an overview of government’s revenue and expenditure developments, and presents fiscal sustainability analysis that is most relevant to countries with large hydrocarbon wealth such as the UAE. The paper discusses measures to contain expenditure growth—controlling the public wage bill, reducing subsidies and transfers, and stabilizing other expense in real terms. It also proposes options to increase nonhydrocarbon revenue such as broadening corporate income tax with lower rates, introducing a low rate-broad based value added tax, and levying an excise tax on automobiles.
August 4, 2015
United Arab Emirates: Staff Report for the 2015 Article IV Consultation
Description: This 2015 Article IV Consultation highlights that United Arab Emirates has continued to benefit from its perceived safe haven status and large fiscal and external buffers that have helped limit negative spillovers from lower oil prices, sluggish global growth, and volatility in emerging market economies. Non-oil growth remained robust at 4.8 percent in 2014, driven by construction. The economic outlook is expected to moderate amid lower oil prices. Non-oil growth is projected to slow to 3.4 percent in 2015, before increasing to 4.6 percent by 2020, supported by the implementation of mega projects and private investment in the run-up to Expo 2020.
August 4, 2015
Central African Economic and Monetary Community (CEMAC): Staff Report on Common Policies and Challenges of Member Countries
Description: This paper discusses common policies of the member countries of the Central African Economic and Monetary Community (CEMAC). Medium-term prospects for CEMAC are uncertain. Despite their recent stabilization, oil prices are projected to remain well below pre-shock levels in the medium term. In addition, oil production is projected to start falling after 2017. The Executive Directors have encouraged the authorities to accelerate the reform of the monetary policy framework to improve transmission channels and better manage systemic liquidity. They have also stressed the importance of full compliance with the pooling of foreign exchange earnings with the regional central bank, and called for stepped-up efforts to implement outstanding safeguards recommendations.
Notes: Also Available in French
August 4, 2015
Nepal: Request for Disbursement Under the Rapid Credit Facility
Description: This paper discusses Nepal’s Request for Disbursement Under the Rapid Credit Facility (RCF). Before the April 2015 earthquake, Nepal’s macroeconomic performance was broadly favorable but the government’s weak budget implementation capacity held back growth and propped up the external position. The authorities’ main challenge has been to boost their capacity to plan, prioritize, and implement capital spending. The authorities are requesting financial assistance under the IMF’s RCF to address the urgent balance of payments and fiscal needs associated with the rehabilitation and reconstruction efforts. The IMF staff supports the authorities’ request for a disbursement under the RCF in the amount of SDR 35.65 million.
August 3, 2015
Rwanda: Detailed Assessment Report—Anti-Money Laundering and Combating the Financing of Terrorism
Description: This paper discusses key findings and recommendations of the Detailed Assessment Report on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) for Rwanda. Rwanda has taken considerable steps over the last years to establish a national AML/CFT framework. The Rwandan authorities have made great progress in modernizing the financial sector, and aim at making it more attractive to foreign investors. Although the risks of money laundering and terrorist financing do not appear to be particularly significant in Rwanda, further action should be taken to bolster the legal framework, improve its implementation, strengthen overall supervision of reporting entities within the financial sector, and mitigate the potential domestic and cross-border risks.
August 3, 2015
Russian Federation: Selected Issues
Description: This Selected Issues paper analyzes Russia’s fiscal framework and the oil-price shock. Russia has relied heavily on its abundant natural resource wealth to finance fiscal deficits since the global financial crisis in 2008–09. The pace of adjustment of the oil-price benchmark could be increased by including future prices in its calculation. Although converting oil revenues using a backward-looking average of the exchange rate could also lead to a more rapid fiscal adjustment, it also implies additional technical and communication challenges. In addition, the fiscal anchor could be more ambitious to safeguard intergenerational equity. Expressing the fiscal rule in terms of a minimum “structural" balance could promote greater savings.
August 3, 2015
Russian Federation: Staff Report for the 2015 Article IV Consultation
Description: This 2015 Article IV Consultation highlights that Russia entered 2014 with declining potential growth owing to the stabilization of oil prices, stalled structural reforms, weak investment, declining total factor productivity, and adverse population dynamics. In addition, the ongoing slowdown was exacerbated by the dual external shocks from the sharp decline in oil prices and sanctions. The authorities took measures to stabilize the economy and the financial system. Russia is expected to be in recession in 2015 owing to the sharp drop in oil prices and sanctions. Growth should resume in 2016 while inflation continues to decline.
Notes: Also Available in Russian
August 3, 2015
Bosnia and Herzegovina: Financial Sector Assessment Program-Banking Sector Stress Testing—Technical Note
Description: This Technical Note discusses results of Banking Sector Stress Testing for Bosnia and Herzegovina (BiH). The stress tests focused on the banking system and covered all 27 banks operating in BiH. System-wide solvency and liquidity indicators appear broadly appropriate, but significant pockets of vulnerability remain. On the basis of the supervisory data used, stress tests suggest that aggregate stress losses, mainly related to increased provisions in the loan book, although non-negligible, remain broadly manageable. Similarly, system-wide liquidity ratios appear broadly adequate. Nevertheless, there are several banks within the system—mainly small domestically owned banks—with a wide range of significant vulnerabilities. These include, low liquidity ratios, large concentration risks, and round-trip cross-border exposures.
August 3, 2015
Bosnia and Herzegovina: Financial Sector Assessment Program - Banking Sector Supervision Core Principles Implementation Update—Technical Note
Description: This Technical Note presents an update on Banking Sector Supervision Core Principles Implementation in Bosnia and Herzegovina. The system of banking supervision oversight has significantly improved since the last review in 2006, but shortcomings remain. Both supervisory authorities have made progress in enhancing the regulatory framework and supervisory processes since the 2006 Financial Sector Assessment Program. The banking agencies are in the process of preparing a new Law on Banks that should address deficiencies in the supervisory powers, resolution tools, and consolidated supervision. Comprehensive regulations on risk management have been drafted that will address remaining deficiencies that are highlighted in this assessment.