IMF Executive Board Completes the First and Second Review under the Extended Credit Facility for Liberia, and Approves US$48.86 Million Disbursement
IMF News, December 21, 2020
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- IMF Executive Board Completes the First and Second Review under the Extended Credit Facility for Liberia, and Approves US$48.86 Million Disbursement
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- Published: December 21, 2020
Disbursement and program status
- Completion of the first and second reviews enables an immediate disbursement of US$48.86 million.
- Of the US$48.86 million disbursement, US$38 million will fill the fiscal financing gap arising from the impact of COVID-19.
- The four-year ECF arrangement has total access of SDR155 million (60 percent of quota or about US$214.30 million) and was approved on December 11, 2019.
- Completion of the first and second reviews brings total disbursements under the arrangements to SDR51 million (about US$72.20 million).
- The authorities have taken corrective actions after mixed program performance initially and continue to make progress in structural reforms.
- Liberia continues to be assessed as having a sustainable debt burden, but borrowing space is limited.
Macroeconomic outlook and projections
- Economic activity is projected to contract by about 3.0 percent in 2020.
- Growth is projected to reach 3.2 percent in 2021, assuming global conditions gradually normalize; downside risks to the outlook are high.
- The growth forecast for 2020 was revised down from 1.4 percent at the program’s inception to -3.0 percent.
- Key projections (selected):
- Real GDP: 2018 Act. 1.2; 2019 Est. -2.5; 2020 ECF Approval 1.4; 2020 RCF Proj. -3.0; 2021 3.4; 2022 4.0; 2023 3.2; 2024 4.1; 2025 4.9; (continuation values shown in source table: 5.3, 5.4).
- Nominal non-mining per capita GDP (U.S. dollars): 2018 620; 2019 574; 2020 621; 2021 553; 2022 535; 2023 527; 2024 542; 2025 537; additional values in table: 549, 564, 613.
- Nominal GDP (millions of U.S. dollars): 2018 3264; 2019 3176; 2020 3099; 2021 2928; 2022 3067; 2023 3131; 2024 2954; 2025 3107; further values: 3247, 3411, 3601, 3828.
Inflation, monetary policy, and reserves
- Inflation (consumer prices, annual average): 2018 23.5; 2019 27.0; 2020 21.3; 2021 17.6; 2022 16.25; 2023 13.5; 2024 9.8; 2025 7.0; additional values: 5.5, 5.0.
- Consumer prices (end of period): 2018 28.5; 2019 20.3; 2020 15.0; 2021 11.65; 2022 12.0; 2023 8.0; 2024 6.0.
- The monetary policy stance is described as appropriately aligned with the inflation objective, and significant progress has been made in strengthening central bank independence.
- Further efforts recommended: contain the central bank’s operational expenses and build up reserves; refine instruments for open market operations; enhance policy coordination between the central bank and the government.
- Gross official reserves (millions of U.S. dollars): 2018 297; 2019 292; 2020 308; 2021 336; 2022 331; 2023 333; 2024 401; 2025 403; further values: 429, 448, 438, 443.
- Months of next year’s imports: 2018 2.2; 2019 2.3; 2020 2.5; 2021 2.4; 2022 2.9; 2023 3.0; 2024 3.1; 2025 2.8.
- CBL's net int'l reserves (millions of U.S. dollars): 2018 70; 2019 27; 2020 54; 2021 -16; 2022 13; 2023 63; 2024 28; 2025 75; further values: 82, 105, 135.
Fiscal stance and public debt
- The fiscal stance has been loosened to meet humanitarian needs during COVID-19 while maintaining tight monetary policy and no central bank financing.
- Authorities committed to fiscal discipline, improvements in cash management, transparency and accountability in spending, and domestic revenue mobilization.
- Central government operations (percent of GDP, fiscal year):
- Total revenue and grants: 2018 25.9; 2019 28.0; 2020 29.9; 2021 27.6; 2022 28.1; 2023 29.8; 2024 27.7; 2025 29.1; further values: 28.9, 28.7, 28.2, 27.3.
- Total revenue: 2018 12.9; 2019 14.3; 2020 14.9; 2021 13.1; 2022 13.9; 2023 15.9; 2024 13.7; 2025 14.2; further values: 16.2, 17.0, 17.5, 17.8.
- Grants: 2018 13.0; 2019 13.8; 2020 15.1; 2021 14.5; 2022 14.1; 2023 14.0; 2024 12.7; 2025 11.7; further values: 10.7, 9.5.
- Total expenditure: 2018 30.8; 2019 34.2; 2020 34.6; 2021 33.6; 2022 31.7; 2023 33.5; 2024 33.2; 2025 32.3; further values: 30.6, 29.5.
- Current expenditure: 2018 23.3; 2019 22.7; 2020 22.6; 2021 21.7; 2022 22.0; 2023 21.6; 2024 20.4; 2025 19.3; further values: 19.1, 18.7.
- Capital expenditure: 2018 11.0; 2019 11.9; 2020 9.9; 2021 11.5; 2022 11.2; 2023 11.3; 2024 10.8.
- Overall fiscal balance, including grants: 2018 -4.9; 2019 -6.2; 2020 -6.0; 2021 -3.6; 2022 -3.7; 2023 -5.6; 2024 -3.2; 2025 -2.8; further values: -1.9, -1.7, -2.2.
- Overall fiscal balance, excluding grants: 2018 -17.9; 2019 -20.0; 2020 -19.7; 2021 -20.5; 2022 -17.7; 2023 -17.6; 2024 -19.5; 2025 -18.1; further values: -15.5, -13.6, -12.3, -11.7.
- Public external debt (percent of GDP): 2018 31.5; 2019 38.0; 2020 39.2; 2021 37.2; 2022 42.7; 2023 45.4; 2024 43.1; 2025 46.2; further values: 46.9, 46.5, 46.1.
- Public domestic debt: 2018 8.1; 2019 19.4; 2020 18.4; 2021 20.2; 2022 18.8; 2023 16.3; 2024 14.7.
Financial sector, governance, and policy recommendations
- Priority recommendations and actions:
- Rebuild confidence in the financial sector to support financial stability.
- Address risks from weak financial institutions and ensure the supply and quality of Liberian dollar banknotes.
- Contain central bank’s operational expenses and build up reserves.
- Refine instruments for open market operations and enhance policy coordination between the central bank and the government amid gradual de-dollarization of fiscal spending.
- Continue to clear the fiscal audits backlog, further enhance procurement transparency, and upgrade the anti-corruption legal framework.
- Work with donors and development partners to secure grants and concessional borrowing; carefully prioritize the use of public resources to increase borrowing space and support sustainable growth.
External sector and credit
- External sector indicators (percent of GDP, unless otherwise indicated):
- Current account balance including grants: 2018 -23.1; 2019 -22.5; 2020 -21.4; 2021 -22.8; 2022 -21.9; 2023 -20.2; 2024 -22.2; 2025 -22.6; further values: -22.9, -21.8, -20.7.
- Current account balance excluding grants: 2018 -37.8; 2019 -36.4; 2020 -35.9; 2021 -37.3; 2022 -36.1; 2023 -35.5; 2024 -33.8; 2025 -34.8; further values: -34.0, -31.9, -30.3.
- Trade balance: 2018 -19.2; 2019 -13.4; 2020 -18.5; 2021 -16.4; 2022 -18.9; 2023 -18.3; 2024 -16.5; 2025 -15.6.
- Exports: 2018 12.8; 2019 13.4; 2020 15.6; 2021 21.9.
- Imports: 2018 -35.0; 2019 -32.5; 2020 -33.7; 2021 -31.4; 2022 -34.2; 2023 -32.1; 2024 -33.2; 2025 -32.3; further values: -31.3, -30.2.
- Grants (donor transfers, net): 2018 14.6; 2019 14.4; 2020 13.6; 2021 12.2; 2022 10.1; 2023 9.6.
- Monetary and credit indicators:
- M2/GDP: 2018 19.6; 2019 16.7; 2020 22.3.
- Credit to private sector (percent of GDP): 2018 14.8; 2019 17.3; 2020 15.7; 2021 16.5; 2022 16.1; 2023 16.4; 2024 16.6; 2025 16.6.
- Credit to private sector (annual percent change): 2018 -11.3; 2019 1.3; 2020 -1.1; 2021 2.1; 2022 3.7; 2023 6.2; 2024 6.7; 2025 6.9.
IMF Communications Department, Press Release No. 20/386, December 21, 2020.