Press Release: IMF Approves Extension and Augmentation of Stand-By Credit to Djibouti

May 22, 1997

The International Monetary Fund (IMF) approved a request by the government of Djibouti to extend the current stand-by credit through end-March 1998, and to augment the amount available under it by SDR 2 million (about US$2.8 million), to support the government’s economic and financial program for 1997. The Executive Board had approved a stand-by credit for an amount equivalent to SDR 4.6 million (about US$6.4 million) on April 15, 1996 (see Press Release No. 96/16).

In 1996, the government of Djibouti undertook a substantial reform effort to address the country’s rapidly growing economic and financial imbalances. The IMF-supported program sought to regain control of the fiscal situation and to implement structural measures in a number of areas to improve the economy's supply responsiveness and competitiveness. Despite substantially lower economic activity than anticipated, impressive fiscal adjustment and significant progress in a number of structural reform areas were achieved in 1996. These efforts were intensified in 1997, with a view to reducing further current expenditures and improving the quality of the tax system, as well as the overall regulatory framework for economic activities, to enhance flexibility in factor inputs and create conditions conducive to a resumption of investment and growth and creation of new job opportunities.

Djibouti joined the IMF on December 29, 1978. Its quota1 is SDR 11.5 million (about US$16 million).


Djibouti: Selected Economic Indicators


1993

1994

1995

1996*

1997**

(Percent change)

Real GDP

-3.9

-2.9

-4.0

-1.2

1.0

Consumer prices (average)

4.4

6.5

4.9

4.2

4.0

(Percent of GDP)

External current account balance, excluding foreign budgetary transfers (deficit -)

-15.1

-13.2

-5.9

-6.1

-6.9

Overall government primary balance, excluding grants (deficit-)

-21.3

-13.0

-9.3

-5.1

-3.2

(Months of imports)

Gross official reserves

3.3

3.7

3.5

3.8

3.9

Sources: Djibouti authorities; and IMF staff estimates.

* Preliminary.

** Program.

1 A member’s quota in the IMF determines, in particular, the amount of its subscription, its voting weight, its access to IMF financing, and its share in the allocation of SDRs.

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