Country Reports
2014
February 3, 2014
Canada: Financial Sector Stability Assessment
Description: This report discusses key findings of the Financial Sector Stability Assessment on Canada. Canada’s financial system successfully navigated the global financial crisis, and stress tests suggest that major financial institutions would continue to be resilient to credit, liquidity, and contagion risks arising from a severe stress scenario. Elevated housing prices and high household debt remain an area of concern, though targeted prudential and macroprudential measures are proving to be effective. The regulatory and supervisory framework is strong, and is complemented by a credible federal system of safety nets.
February 3, 2014
Canada: Report on the Observance of Standards and Codes
Description: This paper discusses key findings of the Report on the Observance of Standards and Codes for Canada. Canada has a very high level of compliance with the Basel Core Principles for Effective Banking Supervision. In response to the challenges and structure of its market, the Canadian banking supervisor (OSFI) has developed and is a strong proponent of risk-based, proportionate, supervisory practices and applies a “close touch” approach to its supervised entities. The supervisory approach is well structured, forward looking and maintained on as dynamic a basis as possible. Entry to the Canadian market is subject to demanding prudential entry standards.
February 3, 2014
Republic of the Marshall Islands: Staff Report for the 2013 Article IV Consultation
Description: This Informational Annex highlights the Marshall Islands’ existing tax system’s inability to raise additional revenue, discouragement of private investment, and inequitability. Careful consideration needs to be given to the potential of a comprehensive tax reform program, including strengthening tax administration, for raising additional revenue while supporting the private sector. Many state-owned enterprises (SOEs) are a drain on public finances, and their unreliable or costly services undermine private sector development. To improve their performance, reforms are needed to strengthen efficiency, better delineate commercial and noncommercial services, and introduce tariff systems that better reflect cost of services. In areas where SOEs provide purely commercial services, divestment should be considered.
January 31, 2014
Seychelles: Staff Report for the Eight Review Under the Extended Arrangement
Description: On December 19, 2013, the Executive Board of the IMF completed the eighth and final review under the Extended Fund Facility (EFF) for Seychelles. The completion of the review enables a disbursement of SDR 3.3 million, which will bring total disbursements under the arrangement to SDR 26.4 million. Strong policies have fostered economic growth, brightening Seychelles’ near-term outlook. With the completion of this review, the EFF arrangement comes to an end. The program’s key objective of placing the economy firmly on the path to external and fiscal sustainability has been achieved, based on the successful implementation of the debt restructuring, robust fiscal consolidation, and the resumption of growth.
January 30, 2014
Bulgaria: Staff Report for the 2013 Article IV Consultation
Description: This Informational Annex highlights that the World Bank has been leading the policy dialogue in structural and institutional reforms aimed at Bulgaria’s successful European Union (EU) integration and convergence. The Country Partnership Strategy of the World Bank maintains a strong focus on Bulgaria making the most of its EU membership. It aims to partner with Bulgaria in strengthening national institutions and capacity to meet EU targets and in accelerating the absorption of EU grant funds. The World Bank also continues to undertake substantial knowledge and advisory services on policy reforms in selected sectors and themes of Bulgaria’s National Reform Program 2011–15, such as innovation, education, business regulation, transportation, water, climate change, and social inclusion.
January 30, 2014
Bulgaria: Selected Issues Paper
Description: This Selected Issues paper reviews recent developments in growth and employment in Bulgaria and highlights key constraints to growth suggested by cross-country competitiveness studies. Bulgaria’s GDP has grown substantially since economic and financial stabilization in 1997. The global economic crisis had a major effect on Bulgarian growth and employment. After falling by 5½ percent in 2009, real GDP has grown at a low rate, and by 2012 real GDP was still 3 percent short of its 2008 level. However, employment growth was negative during 2009–2012, and the first small uptick occurred only in 2013.
January 29, 2014
Peru: Staff Report for the 2013 Article IV Consultation
Description: This Informational Annex highlights Peru’s current lending portfolio, which includes 17 active projects with a commitment of US$1.8 billion and an undisbursed balance of US$1.4 billion. The areas covered by the existing portfolio are economic policy, the environment, social protection, transportation infrastructure, and water resources, among others. Examples of projects include Basic Education, Higher Education, Regional Transport, Lima Optimization of Water Systems, and the Second Rural Electrification Project. The World Bank has an extensive program of analytical and advisory activities for fiscal year 2013/14, including both economic and sector work and nonlending technical assistance. The economic and sector work covers areas such as public expenditure, fiscal incidence, infrastructure, social sectors, climate change, and housing and municipal financing.
January 29, 2014
Peru: Selected Issues Paper
Description: This Selected Issues paper assesses empirically the motives and effectiveness of foreign exchange (FX) interventions in Peru. The results of the study indicate asymmetries both in the Central Reserve Bank of Peru’s reaction function and in the effectiveness of FX interventions. Probit estimates of the likelihood of FX purchases and sales, in the first stage of the regression, show that both forms of intervention are targeted at leaning against the wind; that is, resisting appreciation in the former case and resisting depreciation in the latter. But only FX sales, not FX purchases, react to volatility. Similarly, instrumental variable regression results show evidence of asymmetry in the effectiveness of FX interventions.
January 28, 2014
Grenada: Ex Post Assessment of Longer-Term Program Engagement
Description: This paper discusses Ex Post Assessment of Longer-Term Program Engagement on Grenada. Grenada’s engagement with the IMF played an important role in supporting the small island economy after it was buffeted by major adverse shocks. IMF support catalyzed substantial donor aid in the wake of unprecedented damage from two hurricanes and provided additional resources when the global crisis hit. Key reforms were also advanced, including the implementation of a value-added tax and strengthening of the nonbank regulatory framework. Executive Directors have agreed that a new program should support urgently needed fiscal consolidation, promote faster and more inclusive growth, and focus on a few macro-critical reforms.
January 28, 2014
The Bahamas: Tax Reforms for Increased Buoyancy
Description: This paper focuses on tax reforms for increased buoyancy in The Bahamas. The Bahamas has a low tax effort owing to limited tax handles and underutilization of available ones. Real property tax collections as percent of GDP have doubled within a decade. In addition to the real property taxes, a graduated stamp duty on the conveyance of immovable property is imposed at fairly steep rates. As a requirement to World Trade Organization membership, the tariff rates will be lowered from their current levels. It is expected that revenue losses from tariff reduction will be compensated by value-added tax revenues.