Country Reports
2023
July 18, 2023
Cabo Verde: 2023 Article IV Consultation, Second Review Under the Extended Credit Facility Arrangement, and Request for Modification of a Performance Criterion-Press Release; Staff Report; and Statement by the Executive Director for Cabo Verde
Description: Cabo Verde’s medium-term outlook is positive, supported by the authorities’ policy package to respond to the evolving impacts of the war in Ukraine and their commitments to the recovery process and the ECF in a challenging environment. The economy rebounded strongly in 2022 with GDP growth of 17.7 percent, although average inflation increased to 7.9 percent at end-December 2022 driven by higher food, electricity, gas, and transportation costs. The new Strategic Plan for Sustainable Development 2022-2026 (PEDS II) sets the reform agenda to overcome challenges to sustainable development. The economy remains vulnerable to internal and external risks. In this context, the ECF will support the authorities’ plans towards economic and social progress, as well as the environmental challenges facing the country in its development process, while seeking to reduce debt levels and mitigate risks.
July 18, 2023
South Africa: Technical Assistance Report—Monetary and Financial Statistics (Duty Station-based) Mission (August 10–23, 2022); IMF Country Report No. 23/263
Description: The mission collaborated with SARB to ensure South Africa's monetary data adhered to international standards outlined in the 2016 Monetary and Financial Statistics Manual and Compilation Guide, including comprehensive coverage of other depository corporations (ODCs) sector.
July 18, 2023
Pakistan: Request for a Stand-by Arrangement-Press Release; Staff Report; Staff Statement; and Statement by the Executive Director for Pakistan
Description: Pakistan’s economy was buffeted by significant shocks over the past year. The severe impact of the floods, the commodity shock from the war in Ukraine, and the tightening of external and domestic financing conditions together with policy backsliding aggravated economic conditions and halted the post-pandemic recovery. Growth stalled, inflation surged, international reserves dropped to very low levels, and fiscal and external pressures have become acute. Despite some efforts in FY23H2, the difficult economic, social, and political environment as well as insufficient external financing, have prevented sufficient progress in completing the Extended Fund Facility (EFF) which expired on June 30. To address the challenges and sustain macroeconomic stability, the authorities have renewed their policy efforts, and are seeking support under a new Stand-By Arrangement.
July 17, 2023
Germany: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Germany
Description: The German economy has demonstrated resilience following the shut-off of Russian gas supply last year, with highly adverse scenarios of widespread energy scarcity being avoided. This success reflects impressive efforts to conserve energy and secure future energy supplies, as well as the lack of severe winter weather. Nonetheless, adverse effects from the energy shock and tighter financial conditions have been sufficient to tilt the economy into recession in recent months. Inflation also spiked as the energy price shock added to existing pandemic-related supply bottlenecks, though inflation is now falling as these effects start to ease. Germany’s financial system remains well capitalized and liquid overall, but banking turmoil in other advanced economies earlier this year has nonetheless heightened the focus on potential financial stability risks associated with rising interest rates.
July 13, 2023
Zambia: 2023 Article IV Consultation, First Review Under the Extended Credit Facility Arrangement, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Zambia
Description: Zambia has made commendable progress over the last two years in implementing its reform agenda to stabilize the economy, lay the foundation for inclusive growth, and create jobs against the backdrop of significant external shocks. The authorities reached an agreement with official creditors on June 22 on a debt restructuring consistent with program parameters. The restoration of fiscal and debt sustainability, together with reforms to boost private and human capital investment, and strengthen governance and anti-corruption, support a positive medium-term economic outlook. Nonetheless, with poverty and inequality amongst the highest in the world and climate vulnerabilities high, significant challenges remain. Sustained efforts are essential to maintain fiscal credibility while also creating sufficient space for social, development, and climate spending.
July 13, 2023
Republic of Mozambique: Second Review Under the Three-Year Arrangement Under the Extended Credit Facility, Requests for Modification of The Monetary Policy Consultation Clause, Waivers of Nonobservance for Quantitative Performance Criteria, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Mozambique
Description: The economic recovery is broad-based and strengthening. Inflation pressures remain moderate reflecting favorable domestic food production and stable fuel prices. Fiscal performance in 2022 was worse than expected, mainly due to slippage in the wage bill reform and revenue underperformance. Mozambique has been grappling with the impact of Cyclone Freddy and a persistent cholera outbreak. The security situation in the North has improved; municipal elections will be held in October 2023, and general elections in October 2024.
July 12, 2023
Niger: Third Review Under the Extended Credit Facility Arrangement, Request for Extension, Rephasing, and Modification of Performance Criteria of the Extended Credit Facility Arrangement, and Request for an Arrangement Under the Resilience and Sustainability Facility-Press Release; Staff Report; and Statement by the Executive Director for Niger
Description: Niger continues to face substantial development needs, exacerbated by rapid population growth. Niger is also one of the most vulnerable countries to the effects of climate change. Given the importance of rain-fed agriculture for the country’s economy, climate change is a significant driver of chronic food insecurity and conflict, notably by intensifying competition for scarce resources. These challenges, coupled with a deterioration of the security situation, further hinder Niger’s development prospects in a context of fragility.
July 11, 2023
United Kingdom: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the United Kingdom
Description: Market stress following the September 2022 'mini-budget' has dissipated, in the context of a successful financial stability intervention by the Bank of England (BoE) and two prudent budgets. Post-Brexit uncertainty has declined somewhat due to the Windsor Framework agreement to resolve disputes around the Northern Ireland Protocol. Still, the economy faces several challenges. The post-pandemic recovery was disrupted by the sharp energy price shock due to Russia’s war in Ukraine; labor force participation has declined, mainly on account of rising long-term illness; and large policy rate increases—needed to arrest high and sticky inflation—have tightened financial conditions. Accordingly, and despite recent upgrades, GDP growth is forecast at a modest 0.4 percent for 2023, followed by 1 percent growth in 2024. Lower energy prices and emerging economic slack is projected to help reduce headline inflation to around 5¼ percent by end-2023 and to the 2 percent target by mid-2025. Risks are tilted to the downside for growth and to the upside for inflation. Tighter-than-expected global financial conditions present the key downside risk to growth, while robust wage growth and greater inflation persistence pose upside risks to inflation.