Country Reports

March 7, 2014

The Bahamas: Staff Report for the 2013 Article IV Consultation

Description: This 2013 Article IV Consultation highlights economic developments and policies in The Bahamas. The paper focuses on policies to secure fiscal, external, and the financial sector stability, and strengthen medium-term growth. It outlines that the authorities need to implement comprehensive policies to restrict the central government deficit and reduce debt to comfortable levels. It suggests that economic activity in The Bahamas is expected to pick up more strongly from 2014 onward as the U.S. recovery accelerates and The Bahamas starts operations. Also, investment is projected to remain strong in the near future.

March 6, 2014

Mongolia: 2013 Article IV Consultation-Staff Report; Press Release and Statement by the Executive Director for Mongolia

Description: This 2013 Article IV Consultation highlights economic developments and policies of Mongolia between 2003 and 2013. The resulting balance-of-payments (BOP) pressures have been compounded by negative shocks to foreign direct investment (FDI) and coal exports. The IMF report analyzes that various banking sector vulnerabilities and weaknesses in the business climate need to be addressed to steady the progress of the economy. Launch of new investment law is important to be introduced by the government to improve the business climate and encourage FDI inflows.

March 6, 2014

Morocco: 2013 Article IV Consultation-Staff Report; Press Release; and Statement by the Executive Director for Morocco

Description: This paper discusses Morocco’s 2013 Article IV Consultation on economic developments and policies. The IMF report highlights that despite unfavorable external and domestic environment Morocco’s economic performance has improved during 2013. The Morocco’s economy remains vulnerable to international conditions and a difficult regional environment. It focuses on the importance of giving more flexibility in the exchange rate regime that intends to support competitiveness, enhance the capacity of the economy to absorb shocks, and support the authorities’ strategy for diversifying external flows away from Europe.

Notes: Also available in French

March 6, 2014

Morocco: Third Review Under the Two-Year Precautionary and Liquidity Line-Staff Report; Press Release; and Statement by the Executive Director for Morocco

Description: This paper reviews Morocco’s Third Review Under the Two Year Precautionary and Liquidity Line (PLL). The PLL aims to provide insurance against external risks while supporting the authorities program aimed at reducing fiscal and external vulnerabilities and increasing higher growth. The paper outlines that macroeconomic performance has improved in 2013, but the outlook still hinges on the sustained delivery of reforms. The IMF report highlights that continued improvement in economic conditions depend on the sustained implementation of reforms to further reduce vulnerabilities, strengthen competitiveness, and incur stronger growth.

Notes: Also available in French

March 1, 2014

Republic of Mozambique: Technical Assistance Report on Refocusing the Public Financial Management Strategy

Description: The report contributes to the Mozambican authorities on reviewing the implementation of the government’s public financial management (PFM) reform strategy.

February 27, 2014

Guinea: Third Review Under the Three-Year Arrangement Under the Extended Credit Facility, and Financing Assurances Review-Staff Report and Press Release

Description: This paper discusses Guinea’s Third Review under the Three-Year Arrangement under the Extended Credit Facility (ECF) and Financing Assurances Review. The macroeconomic environment in Guinea in 2013 was difficult, reflecting the fragile sociopolitical situation and a sharp slowdown in mining sector projects. As a result, growth is estimated to have slowed to 2.5 percent, sharply below the projected 4.5 percent. Inflation continued to fall and at the end of 2013 was 10.5 percent year over year. International reserves were maintained at a satisfactory level, and the exchange rate remained broadly stable. Performance under the ECF-supported program remains satisfactory. The IMF staff supports the completion of the third review under the ECF arrangement and completion of the financing assurances review.

Notes: Also available in French

February 26, 2014

Yugoslav Republic of Macedonia: Second Post-Program Monitoring Discussions

Description: This paper reviews the key points of Second Post-Program Monitoring Discussions with the Former Yugoslav Republic of Macedonia (FYR Macedonia). Growth in FYR Macedonia continues to strengthen, although the recovery is not yet broad-based. External and fiscal vulnerabilities have risen: private non-debt-creating capital flows have slowed and could leave the reserve path increasingly driven by an accumulation of external public debt. Central government debt has increased by about 15 percentage points since the beginning of the global financial crisis, in the context of growing broader public sector operations. In the absence of domestic spillovers, the structural improvement in the trade deficit will be gradual, and growth could be uneven.

February 21, 2014

Paraguay: Selected Issues

Description: This Selected Issues paper analyses Paraguay’s effective interest spreads using various methodologies. Interest rate spreads in Paraguay continue to be some of the highest in Latin America. A series of bank crises in the late 1990s and early 2000s weakened the financial system and pushed up spreads. The analysis suggests that operational costs, rising profits, and the need to cover credit and liquidity risks are the main factors behind Paraguay’s effective spreads. Improving data quality and mechanisms for sharing credit information could contribute to reduced spreads. Although the empirical results suggested that banking concentration has not given rise to greater spreads, adding new banking entrants may lower margins by increasing competition within the sector.

Notes: Also Available in Spanish

February 21, 2014

Paraguay: 2013 Article IV Consultation-Staff Report; Press Release

Description: This 2013 Article IV consultation highlights the main challenge ahead for Paraguay, which is to improve social and economic development while strengthening the macroeconomic policy framework to cement strong fundamentals. Paraguay’s outlook for 2014–18 is favorable, with broadly balanced risks, despite less buoyant external conditions. The economy is expected to continue to be one of the most dynamic in the region, with growth returning to potential of about 4.5 percent a year by 2016, inflation in line with the central bank’s target rate, and small fiscal and current account deficits. Consistent with this outlook, the policy stance should be tightened in the near term, with policies guided by fiscal responsibility and incipient inflation-targeting frameworks over the medium term.

Notes: Also Available in Spanish

February 20, 2014

India: Selected Issues

Description: This Selected Issues paper uncovers the factors behind the unprecedented widening of India’s current account deficit in terms of the sectoral savings-investment balance. The unprecedented widening of India’s current account deficit in recent years is a symptom of underlying macroeconomic imbalances and structural weaknesses. Persistently high inflation has depressed real returns, prompting a surge in gold imports and a marked deterioration in household financial savings and the savings-investment balance. In turn, improvement in the public sector’s savings-investment balance was achieved through capital spending cuts, as subsidies remained high and fuel price adjustments lagged. Further efforts to increase financial savings would help reduce the current account deficit sustainably and boost growth.