Country Reports

March 11, 2015

Maldives: 2014 Article IV Consultation—Staff Report; Press Release; and Statement by the Executive Director for the Maldives

Description: This 2014 Article IV Consultation highlights that Maldives’ real economy has picked up. Growth is estimated to have reached 5 percent in 2014 with stronger tourism activity driven by a rapid expansion from Asian markets and a tepid recovery from Europe. The IMF staff expects growth to be about 5 percent in 2015. Weaker import prices have pushed down inflation to low levels. Growth is expected to remain relatively strong in the near term, though the fiscal adjustment envisaged in the 2015 Budget will have a mildly negative effect on growth.

March 11, 2015

Finland: Fiscal Transparency Evaluation

Description: This paper discusses key findings of fiscal transparency evaluation for Finland. It highlights that Finland meets most of the principles of the Fiscal Transparency Code at good or advanced level. Some areas, notably related to the analysis and management of fiscal risks, are still rated as basic or below, but with a few exceptions the importance of these areas for fiscal management in Finland is relatively low. Overall, the Finnish authorities produce an impressive amount of data and information related to all three pillars of the Code. It is also highlighted that fiscal reporting in Finland is transparent and meets good or advanced practice in all areas.

March 11, 2015

Niger: Selected Issues

Description: This Selected Issues paper presents an external stability assessment on Niger. Niger’s current account balance deteriorated in 2013, mostly on account of higher food and capital goods imports. The deficit is expected to widen further in 2014–15, mainly driven by large investment in the extractive industry and basic infrastructure. The current account is projected to gradually improve from 2016 as important projects in infrastructure will come to end, the oil and mining sectors come on stream and public and private savings increase. Although aid and foreign direct investments are the main sources of external financing, external borrowing–mainly on concessional terms–has increased significantly.

March 11, 2015

Niger: Staff Report for the 2014 Article IV Consultation and Fourth and Fifth Reviews Under the Extended Credit Facility Arrangement and Request for Waiver of Nonobservance of Performance Criteria and Modification of Performance Criteria

Description: This 2014 Article IV Consultation highlights that Niger’s overall macroeconomic performance has been broadly satisfactory. After the economic slowdown in 2013 owing to the regional security situation and adverse climatic conditions, economic growth has rebounded in 2014. Inflation has been contained, in part owing to the government’s efforts to improve food security and the functioning of food markets. However, program performance has been mixed, as a combination of unexpected security and food expenditures and a shortfall in external financing have strained fiscal management. In the near term, containing the fiscal deficit through measures to improve tax policy and administration, reform customs administration, and reduce exemptions is essential to ensure sustainability.

Notes: Also Available in French

March 11, 2015

Republic of Armenia: 2014 Article IV Consultation-First Review Under the Extended Arrangement-Staff Report; Staff Supplement; and Press Release

Description: This 2014 Article IV Consultation highlights that after a steady recovery during 2010–12 from the deep 2009 recession, Armenia’s growth softened in 2013 and has remained subdued in 2014. The softening of economic activity has been broad based, as growth of exports and remittances slowed, and government spending was lower than budgeted. Construction, which had declined since the 2009 crisis, was relatively flat. Growth is projected at 2.6 percent in 2014 and is expected to increase only gradually in 2015 and over the medium term in light of expectations of slow growth in key trading partners. The authorities’ policies remain geared toward maintaining macroeconomic stability and fostering sustainable and inclusive growth.

March 3, 2015

Malaysia: Selected Issues

Description: This Selected Issues paper examines the implications of lower crude oil prices on Malaysia’s economy. Although Malaysia’s net oil exports are now very small as a share of GDP, its gas exports are sizeable. The paper provides some background on the structure of energy production and trade in Malaysia, and presents results from empirical analysis of the oil prices on Malaysia’s growth. It is concluded that the decline in prices is likely to have a net negative impact on growth, even though the recent decline in oil prices partially reflects supply considerations.

March 3, 2015

South Africa: Financial Sector Assessment Program-Reforms in the OTC Derivatives Market-Technical Note

Description: This Technical Note analyzes over-the-counter (OTC) derivatives market reforms in South Africa and identifies vulnerabilities that may potentially impact financial stability. South Africa is committed to reform its OTC derivatives market to reduce vulnerabilities and increase transparency. Reforms are being implemented through the Financial Market Act and Regulations for banks, reflecting the Basel III capital requirements. Swift progress on the consultation and issuance of FMA regulations, trade repository regulations, and related notices are warranted to proceed with reforming the OTC derivatives market. Secondary legislation still needs to be finalized and will contain requirements for financial market infrastructures.

March 3, 2015

South Africa: Financial Sector Assessment Program-Stress Testing the Financial System-Technical Note

Description: This Technical Note discusses stress testing (ST) results for the financial system of South Africa. The bank STs suggest that banks have adequate capital to withstand severe shocks, but need larger liquidity capacity to meet regulatory requirements. Even in the severe scenario in which GDP falls for three consecutive years, banks’ capital buffers seem sufficient, although the impact of a large default could be significant. Banks also appear resilient to market risks in both the trading and banking books. Some banks, however, would have difficulty meeting the Liquidity Coverage Ratio without the Committed Liquidity Facility of the South African Reserve Bank.

March 3, 2015

South Africa: Financial Sector Assessment Program-Financial Safety Net, Bank Resolution, and Crisis Management Framework-Technical Note

Description: This Technical Note discusses recommendations made during the Financial Sector Assessment Program (FSAP) for South Africa in the areas of contingency planning, crisis management, and bank resolution. The proposed scope of the new resolution regime and of the South African Reserve Bank’s (SARB) jurisdiction as the resolution authority remains unclear. It is suggested that authorities should consider focusing on all deposit-taking institutions and only those other financial institutions that are currently deemed systemic. Non-deposit-taking financial institutions that are not found to be systemic should be resolved by the Prudential Authority or the Market Conduct Authority, whichever is the lead regulator.

March 3, 2015

South Africa: Financial Sector Assessment Program-Detailed Assessment of Observance on the Insurance Core Principles

Description: This paper discusses key findings of the Detailed Assessment of Observance on the Insurance Core Principles on South Africa. Insurance regulatory and supervisory regime in South Africa is in transition. Currently, the Financial Services Board (FSB-SA) regulates the nonbanking financial services industry, including the insurance sector, in South Africa. With the goal of achieving a safer financial sector to serve South Africa better, the government has proposed major changes in the financial sector. The four policy objectives are: financial stability, consumer protection and market conduct, financial inclusion, and combating financial crime. Market realities in the insurance sector pose significant regulatory challenges, which are well recognized by the authorities.