Country Reports
2023
September 18, 2023
Kuwait: 2023 Article IV Consultation-Press Release; and Staff Report
Description: Benefiting from high oil prices, Kuwait’s economic recovery continues, and the fiscal and external balances have strengthened. Inflation is contained and external buffers are increasing. However, structural challenges persist. The dominance of oil in Kuwait’s economy coupled with global decarbonization trends underscore the urgency for economic diversification and structural transformation, and the pursuit of fiscal reforms to reinforce sustainability.
September 18, 2023
Kingdom of Bahrain: Selected Issues
Description: Interest in CBDC is growing globally including in Bahrain, which has made considerable strides in the areas of payment service digitalization and fintech. While a CBDC could bring about various benefits, it may also imply risks. The analysis presented in this paper aims to assess some of these benefits and risks for Bahrain. It will quantify the potential impact of introducing a CBDC on the financial system and monetary policy transmission using a model specifically calibrated and estimated for Bahrain. It finds that a CBDC's perceived utility by the population is key for wide adoption. While high adoption and remuneration can help enhance monetary policy transmission, they may imply a drag on banking system profitability. A careful and analytically informed design could enhance adoption while limiting risks to financial stability.
September 15, 2023
Kiribati: 2023 Article IV Consultation-Press Release; and Staff Report
Description: Due to supportive fiscal policies, the economy recovered strongly in 2021, with real GDP growing 7.9 percent. However, a domestic outbreak of COVID-19 and the subsequent lockdown restrictions imposed in the first half of 2022 along with a severe drought dampened economic activities. With the reopening of borders in August 2022, GDP growth is expected to increase from an estimated 1.2 percent in 2022 to 2.5 percent in 2023. Inflation has picked up recently due to the recovery in domestic demand, supply shortages, and elevated commodity prices and freight costs. Risks to the outlook are mainly on the downside.
September 15, 2023
Republic of Latvia: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Latvia
Description: Latvia is facing an inflation shock, slow growth, and geopolitical challenges, while the long-term policy concern is to sustain the income convergence process. Headline inflation has surged over the past year in Latvia, measuring 12.3 percent y/y in May, while core inflation increased to 12.4 percent y/y in May. The new government, which took office in December 2022, will also have to continue to deal with the spillovers in the Baltic region from the Russian invasion of Ukraine and the impact of sanctions imposed on Russia and Belarus, the cost-of-living crisis, energy security, and the expected slowdown in growth. To secure high long-term growth in a low-inflation environment, Latvia needs to address three structural issues: (i) low productivity, (ii) low investment, and (iii) skilled labor shortages.
September 14, 2023
Guinea-Bissau: Second Review Under the Extended Credit Facility Arrangement and Requests for a Waiver of Nonobservance of Performance Criteria, Rephasing of Access, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Guinea-Bissau
Description: Guinea-Bissau is a fragile state facing significant development challenges, including sustaining the recovery from the COVID-19 pandemic, supply disruptions, and the global economic slowdown. The IMF Board approved the First Review of the Extended Credit Facility (ECF) arrangement in May 2023. The reform agenda includes an ambitious fiscal consolidation to support inclusive growth while preserving debt sustainability and structural and governance reforms to strengthen state capacity. The opposition party won an outright majority at the legislative election on June 4, 2023, but a change in the government has not affected the authorities’ program commitments.
September 13, 2023
West Bank and Gaza: Report to the Ad Hoc Liaison Committee
Description: The outlook for the Palestinian economy remains dire, with risks tilted to the downside. Amid a deteriorating security, political and social situation, the recovery is losing momentum and per capita income is projected to decline over the medium term. The fiscal crisis remains unresolved, amid limited prospects for much-needed deep expenditure reforms and resolution of the outstanding fiscal files with Israel. The banking sector remains stable and well-monitored, but early signs of asset quality deterioration are emerging.
September 13, 2023
West Bank and Gaza: Selected Issues
Description: Years of isolation and continuous conflicts have left Gaza’s economic development far behind that of the West Bank. In 2022, per capita income in Gaza was only a quarter of that in the West Bank, and unemployment and poverty rates were much higher. This reflects much lower employment and investment rates as well as considerably lower productivity growth. While Israeli-imposed restrictions on access and movement of labor and goods severely hinder trade outcomes and productive capacity in both West Bank and Gaza, restrictions are far more severe for Gaza. As a result of this Gaza blockade and repeated wars with Israel since 2008, the capital stock is stagnant, and infrastructure is derelict (especially electricity). Analytical work suggests sizeable economic gains from boosting Gaza’s electricity infrastructure. Prospects for declining donor aid risk worsening Gaza’s humanitarian crisis. Under these conditions, Gaza is unlikely to meet the U.N. 2030 Sustainable Development Goals. A major easing of the blockade and financing constraints is necessary to improve prospects, provided the security situation can be assured in parallel.
September 8, 2023
Cyprus: Technical Assistance Report–Strengthening the Governance and Oversight of State-Owned Enterprises
Description: Cyprus’s government has enhanced financial oversight and governance of public entities over the past decade. Several legal and administrative measures have been implemented to support the oversight functions of the Ministry of Finance and introduce elements of good governance and accountability of public entities. As a result, the liabilities of public entities have remained stable and government guarantees have decreased. Looking ahead, the government plans to further strengthen the governance of public entities in line with best international practices. This report provides practical recommendations for improving corporate governance, enhancing accountability practices in public entities, and strengthening their financial oversight.
September 7, 2023
Trinidad and Tobago: Technical Assistance Report–Technical Assistance on Fintech Regulation and Legislation
Description: The impact of fintech in Trinidad and Tobago is currently concentrated in the payments sector. In meeting with firms utilizing fintech, trade bodies, and public authorities, we found that the impact of fintech is not yet broad based and is permeating primarily in relation to e-money and payment service providers (PSP), and more slowly in other areas such as crowdfunding, robo-advice, and crypto assets. While data on the impact of fintech are limited, we use public information, conversations with authorities and market participants, and applications for licensing and outreach for regulatory support as guides, which suggest that fintech remains relatively concentrated.