Press Release No. 12/213

Press Release No. 12/213
June 8, 2012

A mission from the International Monetary Fund (IMF), led by Mr. Oral Williams, visited Bujumbura from May 28–June 8, 2012 for discussions under the IMF’s Article IV consultations and the first review of the government’s economic and financial program supported by the IMF under the Extended Credit Facility (ECF).

The mission met with the Second Vice-President, Gervais Rufyikiri; the President of the Senate, Gabriel Ntisezerana; the Minister of Finance, Tabu Abdallah Manikariza; the Governor of the Central Bank, Gaspard Sindayigaya; and other senior government officials. The mission also had constructive discussions with members of the donor community, private sector, and civil society.

At the end of the mission, Mr. Williams issued the following statement:

“A series of negative shocks are adversely affecting Burundi’s economy. Headline inflation reached 25 percent in March owing to one-off increases in rents and utility tariffs and continued high food and fuel prices. Budget support from development partners has declined, limiting the government’s ability to maintain public spending levels. Revenue performance has been disappointing, and economic growth is likely to reach only 4.2 percent in 2012, significantly lower than originally expected. The uncertainty in the external environment owing to weaker growth in trading partners, lower aid flows, and high oil and food prices add downside risks to the economic outlook.

“Implementation of the program has been challenging. In this regard, discussions focused on the necessary economic policy response to the shocks with a view to maintaining hard-won economic stability and further reducing poverty. The mission discussed compensatory measures to offset the decline in budget support and revenue slippages, while preserving pro-poor spending. The mission encouraged the authorities to strengthen the fiscal position by accelerating revenue mobilization efforts and bolstering public financial and debt management. The mission also agreed with the authorities on the need to orient monetary policy toward reducing inflationary pressures and maintaining exchange flexibility to preserve the competiveness of the economy

“The IMF stands ready to work with Burundi to address these challenges. The discussions will continue in the coming weeks, with the aim of allowing the IMF Executive Board to consider the Article IV Consultation and first review of the ECF later in the summer. The mission would like to thank the authorities for their warm hospitality and constructive cooperation.”