Country Reports
2023
July 10, 2023
Cameroon: Fourth Reviews Under the Extended Credit Facility and the Extended Fund Facility Arrangements, and Requests for Waiver for Nonobservance of Performance Criterion and Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Cameroon
Description: Cameroon’s recovery has continued, despite security concerns and external risks, including tight global financial conditions and increased oil price volatility. Cameroon is a fragile and conflict affected state, with drivers of fragility ranging from insurgency and conflicts along its borders and in neighboring countries, to poor governance, social exclusion, and climate change. Nevertheless, economic prospects remain positive in the medium term, provided reforms continue, and the external environment is supportive. The three-year arrangements under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) approved in July 2021 amount to SDR (Special Drawing Rights) 483 million (about US$689.5 million, or 175 percent of quota). Completion of the fourth review will allow a disbursement of SDR 55.2 million (about US$73.3 million).
July 7, 2023
Ukraine: First Review under the Extended Arrangement under the Extended Fund Facility-Press Release; Staff Report; Staff Statement; and Statement by the Executive Director for Ukraine
Description: Russia’s invasion of Ukraine continues to have a devastating economic and humanitarian impact. In addition to the continuing combat in Eastern and Southern parts of Ukraine, air raids on Kyiv and other population centers have been escalating since early May; the recent destruction of the Kakhovka dam has added to the challenges. The war is having a severe impact on human and physical capital, with loss of life, drop in living standards and rise in poverty, as well as infrastructure damages. Despite the resilience of the Ukrainian people and the authorities’ skillful policymaking in maintaining macroeconomic and financial stability, continuous external support is critical to help restore medium-term external viability, prepare the country for post-war recovery and reconstruction, and facilitate Ukraine’s path to EU accession.
July 7, 2023
Chile: Technical Assistance Report-Fiscal Considerations in Managing Stabilization Funds
Description: Chile’s strong fiscal framework has served the country well. The fiscal rule has helped insulate the budgets from volatility in resource prices and economic activity. The sovereign wealth fund (SWF)—the Economic and Social Stabilization Fund (ESSF) and the Pension Reserve Fund (PRF)—was established to encourage savings over time and has provided buffers for stabilizing the economy. During the pandemic, Chile has appropriately used the ESSF to provide swift and impactful support to protect people. Recent efforts to upgrade the fiscal framework— adopt a medium-term fiscal path, formalize a prudent debt ceiling, and introduce an escape clause—can further safeguard fiscal sustainability.
July 7, 2023
Senegal: Requests for an Extended Arrangement Under the Extended Fund Facility, an Arrangement Under the Extended Credit Facility, and an Arrangement Under the Resilience and Sustainability Facility-Press Release; Staff Report; and Statement by the Executive Director for Senegal
Description: A cascade of external and domestic shocks –including the COVID-19 pandemic, rising global commodity prices and global economic slowdown linked to the Russian invasion of Ukraine, Ecowas sanctions against Mali, the US dollar appreciation, domestic spending pressures, and tightened global and regional financing conditions–have dampened economic activity in 2022, widened external and fiscal deficits, increased debt levels, and eroded regional international reserves. The challenging external environment, together with likely delays in the start of hydrocarbon production, will continue to weigh on economic activity in 2023. In the medium term, economic prospects remain favorable, with the temporary boost of oil and gas production, but ambitious reforms are needed to reduce macroeconomic imbalances, put debt on a downward trajectory, and make growth more inclusive. The impact of climate change in Senegal is projected to be severe and reforms to adapt to climate change while contributing to lower greenhouse emission rank high on the Senegalese authorities’ agenda.
July 5, 2023
Dominica: 2023 Article IV Consultation-Press Release; and Staff Report for Dominica
Description: The economy is recovering gradually but faces headwinds from the cost-of-living crisis, more limited policy space, and more frequent and costly climate shocks. Tourism rebounded in the second half of last year, but scarring effects from the pandemic, on the heels of large natural disasters, could prove significant considering lengthy school closures, the deep GDP contraction and associated erosion of fiscal space. Dominica’s climate adaptation and modernization agenda is driving growth, with priority being given to construction of a geothermal energy plant and a new international airport.
July 5, 2023
Democratic Republic of the Congo: Fourth Review Under the Extended Credit Facility, Request for Modification of Quantitative Performance Criterion, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for the Democratic Republic of the Congo
Description: Growth has remained strong and resilient, fueled by expanding mining activity. However, the escalation of the armed conflict in Eastern DRC is having major negative humanitarian effects and weighed on public finances; upcoming elections, scheduled at the end of 2023, are also adding to uncertainty. Since the last review, the government’s revenue shortfalls and rapid spending contributed to a deterioration of the external balance, excess domestic currency liquidity, exchange rate depreciation, and persistent inflation.
July 5, 2023
Central African Economic and Monetary Community: Common Policies in Support of Member Countries Reform Programs-Staff Report; and Statement by the Executive Director
Description: CEMAC benefited from favorable hydrocarbon prices in 2022. Economic recovery firmed up and the external position strengthened, with external reserves building up faster in recent months, although still below adequate levels. Monetary policy was tightened to stem rising inflation, and fiscal positions improved owing to higher oil revenues. However, underlying non-oil fiscal positions deteriorated, highlighting the necessity of accelerating reforms and tackling recent fiscal slippages, to help save part of the oil windfalls and bring polices back in line with Fund-supported program objectives and staff advice. This will help cope more effectively with downside risks, including hydrocarbon prices volatility, food insecurity, financial stability risks, higher inflation, funding squeeze, and debt vulnerabilities.
July 5, 2023
Republic of Serbia: 2023 Article IV Consultation, First Review Under the Stand-By Arrangement, and Request for Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Republic of Serbia
Description: Serbia has made impressive economic gains over much of the past decade: living standards improved, inflation fell, public finances were strengthened, and reserves increased, helped by ample foreign direct investment (FDI) inflows. But spillovers from the war in Ukraine—especially the sharp increase in international energy prices—and deep-rooted problems in Serbia’s energy sector that came to a head last year, led to large external and fiscal financing needs, prompting the authorities to request a Fund-supported Stand-By Arrangement (SBA). Fiscal and external outturns for 2022 were both better than expected, and unemployment remains low. Record FDI inflows continue to drive reserves higher. But inflation remains a pressing challenge. Led by high food and energy prices, headline inflation is now well above the National Bank of Serbia’s (NBS’s) target band and core inflation has also increased sharply. Fiscal policy is expected to remain relatively tight in 2023, despite additional mid-year spending measures. Deep structural problems persist in the energy sector and are a key focus of the SBA. Long-standing geopolitical challenges remain.