Country Reports
2014
June 2, 2014
Bangladesh: Fourth Review Under the Three-Year Arrangement Under the Extended Credit Facility and Request for Modification of Performance Criteria
Description: This paper discusses Bangladesh’s Fourth Review Under the Three-Year Arrangement Under the Extended Credit Facility and Request for Modification of Performance Criteria (PC). All PCs at end-December 2013 (the test date for the fourth review) were met, and all structural benchmarks have been completed. Fiscal and monetary policies are set to retain a prudent stance to safeguard macroeconomic stability. Based on strong program performance to date and the policy framework going forward, the IMF staff recommends completion of the review, as well as modification of PCs for end-June 2014 on account of reserve over-performance.
May 30, 2014
Republic of Mozambique: Poverty Reduction Strategy Paper-Progress Report
Description: This chapter discusses key findings of the Poverty Reduction Strategy Paper progress report on the Republic of Mozambique. The monitoring of 62 output indicators of the 2013 Plano Económico e Social showed that 44 percent of the indicators have achieved the planned targets, 50 percent have not attained the targets but have made significant progress, and the remaining 6 percent of the indicators are lagging far behind. In terms of objectives, the human development objective is showing the best performance, whereas promotion of employment still has challenges and constraints to overcome in fulfilling its targets.
Notes: Also Available in Portuguese
May 30, 2014
Ghana: Staff Report for the 2014 Article IV Consultation
Description: This 2014 Article IV Consultation highlights the emergence of large fiscal and external imbalances since 2012, which has created significant challenges for Ghana. A swift return to macroeconomic stability in 2013 was thwarted by weaker external and domestic conditions. Reflecting lower gold and cocoa exports, the current account deficit exceeded 12 percent of GDP. Although recently revised estimates point to an only moderate slowdown in growth to about 7 percent, the fiscal deficit target of 9 percent of GDP was missed by about 1 percentage point. Ghana’ short-term economic outlook is subject to significant risks, and growth is projected to slow to 4¾ percent in 2014.
May 30, 2014
Republic of Mozambique: Second Review Under the Policy Support Instrument and Request for Modification of Assessment Criteria; Staff Report; Debt Sustainability Analysis; Press Release; and Statement by the Executive Director for Republic of Mozambique
Description: This paper discusses Mozambique’s Second Review Under the Policy Support Instrument (PSI) and Request for Modification of Assessment Criteria. Mozambique’s economy remains buoyant and recovered quickly from the severe floods in early 2013. Growth is estimated at 7 percent for 2013, with strong performance in coal mining, construction, transport, communications, and financial services. Inflation remains low notwithstanding accommodative monetary policy and rapid credit expansion. The real effective exchange rate was broadly stable in 2013 and a nominal appreciation against the South African rand helped to limit inflation. Program performance to date has been broadly satisfactory. The IMF staff recommends the completion of the second PSI review.
Notes: Also Available in Portuguese
May 30, 2014
Mali: Technical Assistance Report-Audit of the Expenditure Chain
Description: This paper discusses key findings of the Technical Assistance report on Mali. The expenditure chain in Mali is vulnerable, even though it is organized along traditional lines and is subject to a number of controls. The process establishes the separation of the payment authorization officer and accountant and includes numerous exante verifications. The Auditor General identified shortfalls in the amount of CFAF 35 billion, or a little more than 3 percent of the 2012 budget, in 17 audits conducted. This report also focuses on the expenditure chain and its complexities and weaknesses, and makes 10 practical recommendations.
Notes: Also available in French
May 28, 2014
Switzerland: Financial Sector Stability Assessment
Description: This paper discusses key findings of the Financial System Stability Assessment on Switzerland. Stress tests indicate that the Swiss banks are robust against even severe shocks. Banks have increased their capital, and the two global banks have achieved substantial deleveraging. Swiss Financial Market Supervisory Authority has focused on significantly improving the quality of its supervision. Real estate bubbles appear to be emerging. With monetary instruments not available, macroprudential instruments are being introduced, but so far are limited and untested. Interest rates are negative at some maturities, threatening the business models of life insurance and pension companies.
May 28, 2014
Switzerland: Report on Observance of Standards and Codes on the following topics: Banking Supervision, Insurance Supervision, and Securities Regulation
Description: Report on Observance of Standards and Codes on the following topics: Banking Supervision, Insurance Supervision, and Securities Regulation
May 28, 2014
Colombia: Staff Report for the 2014 Article IV Consultation
Description: KEY ISSUES Context. Colombia’s economic performance has been robust, underpinned by a very strong policy framework. Last year, real GDP grew by 4.3 percent, with low inflation. The country has a strong external position; the financial system is sound; and fiscal policy remains guided by a structural fiscal balance rule. The authorities intend to undertake an ambitious infrastructure program to be executed through public-private partnerships. Outlook and risks. Real GDP growth is projected to converge to potential (about 4½ percent) in 2014, with inflation remaining within the 2–4 percent target range. The medium-term outlook is favorable, but risks are tilted to the downside. Colombia’s important and growing ties with the global economy expose the economy to external risks. The most important sources of risk are a decline in oil prices, a deterioration in global financial conditions, and volatility from the normalization of monetary policy in the U.S. Near-term policy mix. The current policy mix is broadly adequate. As the ongoing economic recovery takes hold, monetary and fiscal policies are expected to shift to a more neutral stance. Colombia continues to rely on a flexible exchange rate to absorb external shocks. The authorities are also taking advantage of abundant foreign inflows, primarily foreign direct investment, to strengthen their international reserve buffer. Medium-term challenges. Colombia’s key challenge is to sustain strong and inclusive growth with macroeconomic stability. To this purpose, it will be important to: (i) adhere to the fiscal consolidation plan, supporting it with revenue mobilization; (ii) address the infrastructure gap, without increasing fiscal risks; (iii) enhance the social security system by increasing coverage and improving equity, and containing health care costs; (iv) address remaining weaknesses in financial sector supervision; and (v) foster financial inclusion.
May 28, 2014
Finland: Staff Report for the 2014 Article IV Consultation
Description: This 2014 Article IV Consultation highlights that Finland’s strong economic record has stalled. The economy has been in recession for three of the last five years, and unemployment is now more than 8 percent, with more people without work for longer. The shortfall in growth, coming at a time when peer economies saw GDP improve and unemployment fall, points to deeper structural problems. Exports suffered from the continued decline of the information and communications technology industry and falling demand for paper and pulp. The outlook is for a slow and fragile recovery, and weaker external demand could easily derail the upswing.
May 28, 2014
Finland: Selected Issues
Description: This Selected Issues paper on Finland discusses that the country is struggling to recover from the Great Recession, indicating that deeper, structural issues may be holding back growth. Estimates of potential output for Finland are an important part of the toolkit for policymakers—but they come with a degree of uncertainty. As this paper illustrates, the use of different methodologies and assumptions can lead to different results. However, there are indications that Finnish potential output growth is low at this juncture. From 1997 to 2007, potential growth, independent of the choice of smoothing, averages 3.2 percent per year. In 2013, that average has dropped to 0.2 with several of the models producing negative growth. This result indicates that the lack of a recovery in Finland is largely structural in nature. Therefore, any indication that the output gap is closing is due to falling potential rather than a pickup in growth. This leads to the advantages of structural reforms aiming to enhance Finland’s long-term capacity. Total factor productivity enhancing measures could be crucial in helping the economy recover despite the time it takes to implement them.