IMF Executive Board Completes Fifth Review Under the Policy Support Instrument for UgandaPress Release No. 09/198
June 4, 2009
The Executive Board of the International Monetary Fund (IMF) has completed the fifth review under a three-year Policy Support Instrument (PSI) for Uganda following a mission by Fund staff to Kampala in March and April 2009. The Executive Board’s decision was taken on a lapse of time basis.1
After several years of high growth and strong macroeconomic performance, the global financial crisis is now constraining economic activity in Uganda. Growth is expected to slow to 5-6 percent from 9 ½ percent over the past three years. Despite these pressures all assessment criteria for the PSI review, including ceilings relating to government debt, were met. The banking system remains sound and well capitalized, and strong fundamentals and continued prudent macroeconomic policies should enable Uganda’s economy to absorb the slowdown in growth without major macroeconomic stress.
Uganda’s PSI was approved on December 15, 2006 (see Press Release No. 06/281). The program goals include macroeconomic stability, sustainable economic growth, poverty reduction, financial sector deepening, and improved public sector financial management.
The IMF's framework for PSIs is designed for low-income countries that may not need IMF financial assistance, but still seek close cooperation with the IMF in preparation and endorsement of their policy frameworks. PSI-supported programs are based on country-owned poverty reduction strategies adopted in a participatory process involving civil society and development partners. This is intended to ensure that PSI-supported programs are consistent with a comprehensive framework for macroeconomic, structural and social policies to foster growth and reduce poverty. Members' performance under a PSI is reviewed semi-annually, irrespective of the status of the program (see Public Information Notice No. 05/145).
1 The Executive Board takes decisions under its lapse of time procedure when it is agreed by the Board that a proposal can be considered without convening formal discussions.