Country Reports
2024
June 10, 2024
Somalia: Staff Report for the First Review Under the Extended Credit Facility Arrangement, and Requests for Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Somalia
Description: Economic activity has picked up in recent months, supported by a rebound in agriculture, though still affected by the lingering effects of two years of drought and recent severe flooding. The security situation remains challenging, with the government scaling up its military actions against the Al-Shabab terrorist group, amid the planned withdrawal of the African Union Transition Mission in Somalia (ATMIS) by end-December 2024. Despite these significant challenges, the authorities remain committed to the reform effort, leveraging the benefits of the HIPC Completion Point achieved in December 2023.
June 7, 2024
Luxembourg: Financial Sector Assessment Program-Financial System Stability Assessment
Description: The assessment of Luxembourg’s large, interconnected, and complex financial system took place against heightened economic, financial, and geopolitical uncertainty. Investment funds have grown since the 2017 FSAP, while their connections to other funds, banks, nonbank financial intermediaries, and foreign entities have also increased. Domestic banks face risks from the ongoing downturn in credit and house price cycles, especially in the high-risk mortgage segment. Securities portfolios in large banks are mostly held-to-maturity and spread across euro area issuers. The banking sector maintains higher capital ratios than euro area peers, has low but rising nonperforming loans, and benefits from support to the economy from a AAA-rated sovereign.
June 7, 2024
Luxembourg: 2024 Article IV Consultation-Press Release; and Staff Report; and Statement by the Executive Director for Luxembourg
Description: The new government took office in November 2023 and key plans include lowering taxation to boost purchasing power and competitiveness. A financial sector assessment program (FSAP) concluded together with the Article IV in March 2024.
June 6, 2024
Spain: Financial System Stability Assessment
Description: The Financial Sector Assessment Program (FSAP) took place in an uncertain economic environment with tight monetary and financial conditions and elevated downside risks. The bank-dominated Spanish financial system has shown resilience against shocks and household and nonfinancial corporate sectors have continued to de-lever their balance-sheets. Nonbank financial intermediation comprises a smaller share of the financial system.
June 6, 2024
Spain: 2024 Article IV Consultation-Press Release; and Staff Report
Description: The Spanish economy has been resilient to successive shocks, whose effects were mitigated by unprecedented policy support that is now being phased out. The labor market performance has been exceptionally strong, and some of its perennial deficiencies—most notably the large share of temporary workers and high unemployment—have eased. Growth is projected to reach 2.4 percent in 2024, and headline and core inflation are expected to converge close to the ECB’s target before mid-2025. Risks have become more balanced but are still tilted to the downside for growth and the upside for inflation, including predominantly domestic risks (political fragmentation, under-execution of NGEU spending) but also global risks (energy price volatility, geopolitical risks, geo-economic fragmentation).
June 5, 2024
Trinidad and Tobago: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Trinidad and Tobago
Description: The economy continues to recover while inflation is low. Banks’ credit is expanding, and the financial sector appears sound and stable. The current account is in surplus and international reserve coverage is adequate. The fiscal position in FY2023 was better than budgeted, while public debt remained below the authorities’ soft debt target.
June 4, 2024
Republic of Kosovo: Second Reviews Under the Stand-By Arrangement and the Arrangement Under the Resilience and Sustainability Facility and Request for Modification of Reform Measure-Press Release; Staff Report; and Statement by the Executive Director for Republic of Kosovo
Description: Recent developments, outlook, and risks. Kosovo’s economy has continued to perform well, despite a challenging external environment. Real GDP growth moderated to 3¼ percent in 2023 amid subdued external demand. Inflation has decelerated sharply, reaching 2 percent y/y in the first quarter of 2024. Growth is projected to accelerate to 3¾ percent in 2024, driven by domestic demand. Key risks to the outlook include commodity price spikes due to geopolitical tensions, weaker activity in advanced European economies, and an escalation of tensions in northern Kosovo.