Country Reports

November 1, 2013

Bosnia and Herzegovina: Fourth Review Under the Stand-By Arrangement and Request for Modification and Waivers of Applicability of Performance Criteria

Description: This paper focuses on Bosnia and Herzegovina’s Fourth Review Under the Stand-By Arrangement and Request for Modification and Waivers of Applicability of Performance Criteria. Despite a challenging environment, steady progress has been made in meeting program objectives. All end-June 2013 performance criteria on fiscal balances were met. Although tax revenues have lagged the pick-up in activity, tight spending controls have allowed for the end-June 2013 quantitative performance criteria on the budget balances of the Institutions of Bosnia and Herzegovina and the central governments of the Federation and Republika Srpska (RS) to be met with comfortable margins. The IMF Staff recommends the completion of the fourth review.

November 1, 2013

Sudan: Selected Issues

Description: This Selected Issues paper examines the monetary policy framework in Sudan, and assesses the effectiveness of monetary transmission mechanism since the secession of South Sudan. The econometric analysis concludes that reserve money, the exchange rate, and private sector credit are the main determinants of inflation after the secession of South Sudan and that the transmission lags have been shortened significantly compared with previous studies. These findings reinforce the need for a comprehensive package of fiscal and monetary measures that strengthens the monetary policy framework and improves its effectiveness.

October 30, 2013

Costa Rica: Fiscal Transparency Assessment

Description: This paper discusses pilot fiscal transparency assessment for Costa Rica. The assessment confirmed that Costa Rica has various excellent and sophisticated fiscal transparency practices. Those include: (1) institutional coverage with annual consolidated budgetary information for the entire public sector and monthly information for the Executive Branch; (2) information produced regarding tax expenditures; (3) an independent Office of the Comptroller General of the Republic that audits budget balances by May of the following year; and (4) a medium-term budgetary framework and budgetary projections with forecasts of key macroeconomic variables and the assumptions on which they are based. However, weaknesses do persist in some areas.

Notes: Also Available in Spanish

October 24, 2013

Nigeria: Publication of Financial Sector Assessment Program Documentation––Technical Note on Strengthening Monetary and Liquidity Management

Description: This Technical Note focuses on strengthening of monetary and liquidity management in Nigeria. The Central Bank of Nigeria (CBN) has robust institutional framework in place to design and implement monetary policy. The CBN has also sufficient instruments for short-term liquidity management. The Monetary Policy Rate (MPR) corridor serves as a signaling device for the monetary policy stance. Although use of the overnight facilities is at the banks’ discretion, the CBN is able to use repo operations and outright transactions to manage day-to-day liquidity and guide short-term interest rates toward the MPR.

October 23, 2013

Brazil: Selected Issues

Description: This Selected Issues paper analyzes pace of economic growth for Brazil. Moderating activity and stubbornly elevated inflation since 2010 have led to a reevaluation of Brazil’s long-term potential growth rate. Growth accounting suggests that potential growth is probably lower than was widely assumed in recent years and now stands at about 3½ percent. The demographic dividend of a rapidly expanding labor force is fading and further structural declines in unemployment are likely to be limited. Potential growth will rely more on the pace of capital deepening and productivity growth. Lifting both may require successful implementation of the infrastructure investment program, higher domestic saving, and structural reforms.

October 23, 2013

Brazil: Staff Report for the 2013 Article IV Consultation

Description: This 2013 Article IV Consultation highlights that Brazil’s economy is recovering gradually from the slowdown that began in mid-2011. Consumption remained resilient last year underpinned by low unemployment and broad gains in real wages, although it has slowed somewhat more recently. After a protracted period of weakness, investment has begun to recover in recent quarters while business confidence has firmed. With the economy estimated to be operating close to potential, supply-side constraints have restrained near-term growth and exacerbated inflationary pressures. Financial conditions have tightened but credit growth has remained strong, driven by public banks’ lending.

October 22, 2013

United Kingdom: Technical Assistance Report—Assessment of HMRC’s Tax Gap Analysis

Description: This Technical Assistance Report discusses assessment of HMRC’s (Her Majesty’s Revenue and Customs) Tax Gap Analysis program in United Kingdom, and provides advice and guidance on further improving it. The HMRC’s tax gap analysis program is comprehensive in tax coverage, and effectively addresses its multiple dimensions. The report addresses three aspects of the program: (1) the models and methodologies employed; (2) the approach to disseminating the results; and (3) the use of the results in supporting compliance activities, evaluating tax revenue performance across taxes and the effectiveness of HMRC. The report also raises some areas of possible further research.

October 21, 2013

Russian Federation: 2013 Article IV Consultation

Description: This 2013 Article IV Consultation highlights that real GDP growth in Russia has slowed, amid weak investment and external demand. Yet, the economy remains close to full capacity, with unemployment at historic lows and capacity utilization at pre-crisis highs. Short-term indicators are mixed, but on balance suggest some recovery of activity in recent months, indicating a stronger growth outlook for the second half of 2013. The near-term outlook is for moderate growth and inflation at the upper end of the target range of the Central Bank of the Russian Federation (CBR).

Notes: Also available in Russian

October 21, 2013

Russian Federation: Selected Issues

Description: This Selected Issues paper analyzes the impact of the adoption of inflation targeting (IT) on exchange rate volatility in Russian Federation. Russia has seen an increase in exchange rate volatility during the past few years compared with the period before the global financial crisis, as the authorities have chosen to allow a higher degree of ruble exchange rate flexibility in preparation for the adoption of IT. The average of the 12-month coefficient of variation of the ruble/dollar exchange rate has also increased from 2.2 percent in December 2005–September 2008 to about 3.7 percent in March 2010–June 2013.

Notes: Also Available in Russian

October 17, 2013

The Federal Democratic Republic of Ethiopia: 2013 Article IV Consultation

Description: This 2013 Article IV Consultation highlights that recent macroeconomic developments in The Federal Democratic Republic of Ethiopia are encouraging, with a significant deceleration in inflation and continued robust economic growth. Despite significant decline in coffee prices and supply bottlenecks, growth remains robust, supported by better agriculture output and construction and other services activities. Inflation declined from the peak of 40 percent in July 2011 to about 7 percent in June 2013. This has significantly eased the extent to which real interest rates were negative. Fiscal policy at the general government level remains prudent with cautious execution of the government budget.