Financing CESEE’s Growth Ambition
May 17, 2024
Securing Fiscal Discipline and Credibility in WAEMU
May 17, 2024
Fiscal consolidation and the reintroduction of the WAEMU fiscal framework is crucial for maintaining debt sustainability, external viability, and financial stability. The 3 and 70 percent of GDP deficit and debt ceilings envisaged by the expired rule remain appropriate, while addressing the stock-flow adjustments will help rebuild fiscal buffers. Convergence to a fiscal deficit of 3 percent of GDP should be ensured by 2025— barring exceptional circumstances—with focus on domestic revenue mobilization, while controlling expenditure. To secure fiscal discipline and credibility, it is essential to revamp the fiscal rule with a credible debt correction mechanism and exogenous escape clauses.
Key Banking System Risks in the WAEMU
May 17, 2024
The gradual alignment of prudential regulations on Basel II/III standards since 2018, as well as improvements in banking supervision and macroprudential surveillance, have contributed to the WAEMU’s banking system’s resilience to recent global and regional shocks. However, while cyclical vulnerabilities have been contained, bank credit portfolios remain highly concentrated, and their exposure to sovereign risks has grown substantially in recent years, together with liquidity risks. Further reforms building on those recently implemented in line with recommendations from the 2022 Financial Sector Assessment Program (FSAP), including to enhance macroprudential policy’s effectiveness and banking supervision frameworks, will help address such vulnerabilities.
Recent Challenges to the Conduct of Monetary Policy in the WAEMU
May 17, 2024
This paper discusses recent challenges in BCEAO monetary policy, from a recent spike in inflation, the persistent erosion of external reserves, and strains in the regional financial market. In response to these shocks, the BCEAO operated via both policy rates and liquidity management, including by shifting from fixed to variable rate auctions. The paper finds that the conduct of monetary policy became progressively more constrained by financial stability and external viability challenges, arguing for enhanced monetary-fiscal policy coordination to help the BCEAO meet its reserves objectives.
Climate Change in the WAEMU
May 17, 2024
This paper focuses on the trends in climate change in the WAEMU, assesses the criticality of climate change for the region, and reviews the related policy and financing options going forward. Climate change has been increasingly affecting the lives and livelihoods in the WAEMU. Temperatures have risen significantly, and climate-related disasters have hit the region more frequently in recent decades. Climate change can exacerbate the current challenges and hinder long-term economic prospects by threatening economic growth, food security, fiscal and external sustainability, and social outcomes in the region. Macroeconomic policies, structural reforms and cooperation among different parties remain critical alongside regional efforts, in particular to have access to necessary financing and bolster adaptation efforts.
Gender Inequality in the WAEMU
May 17, 2024
This paper documents the current state of gender inequalities in the WAEMU by focusing on outcomes (health, education, labor market and financial inclusion) and opportunities (economic rights). The findings show that despite significant progress toward gender equality over the last three decades, there are still prevalent gender-based disparities, which prevent women from fulfilling their economic potential. Both empirical and model-based estimates suggest that the WAEMU can reap substantial economic gains by mitigating the existing gender gaps in schooling and labor market outcomes. Hence, achieving gender equality remains a macro-critical goal for the region. Going forward, the need for specific policies supportive of gender equality may vary in each member country, but a multifaceted and holistic approach is needed to unleash the related economic potential in the WAEMU as a whole.
Transcript of IMF Press Briefing
May 16, 2024
Iraq: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Iraq
May 16, 2024
Domestic stability has improved since the new government took office in
October 2022. This has facilitated the passage of Iraq’s first three-year budget, which
entailed a large fiscal expansion starting in 2023. The non-oil economy has rebounded
strongly in 2023 after stalling in 2022 and was largely unaffected by the ongoing conflict in
the region. Nonetheless, Iraq remains highly vulnerable to oil price fluctuations and private
sector activity is hindered by the large state footprint—including as an employer of first
resort—corruption, red tape, underdeveloped infrastructure, and poor access to credit.
Iraq: Selected Issues
May 16, 2024
Selected Issues