Country Reports
2024
April 26, 2024
Arab Republic of Egypt: First and Second Reviews Under the Extended Arrangement Under the Extended Fund Facility, Monetary Policy Consultation, and Requests for Waiver of Nonobservance of a Performance Criterion, and Augmentation and Rephasing of Access-Press Release; and Staff Report
Description: The IMF Executive Board approved a 46-month USD 3 billion Extended Fund Facility (EFF) arrangement for Egypt in December 2022. The EFF-supported program aims to safeguard economic stability, restore buffers, and pave the way for inclusive and private sector-led growth. Following policy slippages, the first and second reviews were delayed. The return to a fixed exchange rate in February 2023 undermined the initial credibility boost from the announcement of a shift to a flexible regime and hampered the execution of other program pillars such as divestment of state-owned assets. It also led to foreign exchange (FX) shortages, a large spread in the parallel market, and constrained imports, all of which fueled inflation and weighed on growth. At the same time, delays in raising the policy rate in response to higher-thanexpected inflation resulted in more negative real rates and financial repression. Continued investment in national projects at a pace inconsistent with macroeconomic stability contributed significantly to foreign exchange and inflation pressures. Spillovers from the conflict in Gaza and Israel and the Red Sea disruptions have exacerbated external pressures and widened further the financing gap. A significant investment deal with Abu Dhabi Developmental Holding Company (ADQ), signed in February, has improved the near-term financial outlook, providing for a more benign external financing environment as the authorities push forward with needed reforms.
April 26, 2024
Suriname: Fifth Review Under the Extended Arrangement Under the Extended Fund Facility, Requests for Modification of Performance Criteria, Waivers of Nonobservance of a Performance Criterion, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Suriname
Description: The authorities’ commitment to fiscal discipline and macroeconomic stability is paying off. The economy is growing, inflation is on a steady downward trend, investor confidence is improving, donor support is increasing, and S&P has upgraded Suriname’s credit rating. A debt restructuring agreement with EXIM China has been signed by both parties.
April 25, 2024
Eastern Caribbean Currency Union: 2024 Staff Report for the 2024 Article IV Consultation on Common Policies of Member Countries of the Eastern Caribbean Currency Union-Press Release and Staff Report
Description: After successive external shocks—first, the pandemic and later higher commodity prices after Russia’s invasion of Ukraine—the region’s output has surpassed its pre-pandemic level boosted by a strong tourism rebound and investment. Inflation is moderating from its peak. Fiscal and external balances have improved, but public debt and current account deficits remain high. The financial system has been stable and liquid, although it continues to be confronted with asset quality weaknesses and rising risks in the non-bank financial sector. Longstanding structural challenges affecting private investment and employment create a drag on growth going forward. The region’s outlook is heavily dependent on uncertain Citizenshipby- Investment (CBI) inflows, and susceptible to volatility in commodity prices, a slowdown in major tourism source countries, and the recurrent threat of natural disasters.
April 24, 2024
Republic of Kazakhstan: Financial Sector Assessment Program-Technical Note on Climate-Related Risks and Financial Stability
Description: Kazakhstan is vulnerable to transition risk due to the importance of its energy- and emissions-intensive sectors. Domestic and global climate policies would negatively affect Kazakhstan’s economy, its firms, industries, and banks, with heterogenous impacts across industries and banks. Using both micro and macro modeling approaches, the climate risk analysis suggests Kazakhstani banks are exposed to significant transition risk from domestic and, more importantly, global climate policies. The risk is especially higher for carbon intensive sectors, such as fossil fuel extraction, refining, and electricity generation. Banks with large exposure to emissions-intensive sectors experience up to 30 percent additional losses under a disorderly 1.5°C scenario over a 5-to-7-year horizon, compared to the baseline. Banks with a small share of portfolio with emissions-intensives sectors may still experience losses, as climate change mitigation actions affect the economy at large and the financial health of individual consumers, businesses, and industries.
April 24, 2024
Republic of Kazakhstan: Financial Sector Assessment Program-Technical Note on Regulation and Supervision of Crypto Assets
Description: Kazakhstan saw a significant increase in crypto mining in 2021 following a ban on mining in China. Volatility in crypto markets and energy shortages, coupled with a prohibition on the circulation of crypto assets in Kazakhstan, reduced the size of the market by the following year. While retail and institutional crypto holdings are limited, growing public sector experiments with distributed ledger technology, a pilot project to allow the circulation of crypto in the Astana International Financial Centre (AIFC), and mandates for crypto miners to store a proportion of their mining rewards in AIFC registered exchanges has the potential to increase the size of the sector. If incentives grow for users and firms to circulate crypto, the existing prohibition – which has dampened market growth, could become untenable. Although not a regulatory priority, the broad prohibition on crypto assets should be replaced by a robust regulatory framework, contingent on market growth, upskilling supervisors, and a globally coordinated move to implementing conduct and prudential regulation.
April 22, 2024
Côte d’Ivoire: Request for an Arrangement Under the Resilience and Sustainability Facility-Press Release; Staff Report; and Statement by the Executive Director for Côte d’Ivoire
Description: Côte d’Ivoire is highly exposed to climate change through rising temperatures and sea levels as well as rain pattern changes. Economic vulnerabilities to climate change are mostly due to the country’s heavy reliance on agriculture, and the concentration of industrial and services activity in coastal areas. Agriculture employs about half of the workforce and contributes about 17 percent of GDP and 10 percent of tax revenues. At the same time, greenhouse gas emission and pollution in urban areas are growing, albeit from a low level.
April 17, 2024
West African Economic and Monetary Union: Selected Issues
Description: Selected Issues
April 17, 2024
West African Economic and Monetary Union: Staff Report on Common Policies for Member Countries-Press Release; Staff Report; and Statement by the Executive Director for the West African Economic and Monetary Union
Description: The WAEMU has seen strong growth and rising living standards over the past decade. Economic growth averaged 5.4 percent in 2013-2019 and 5.8 percent in 2021-2023. Policy efforts from regional and national authorities have cushioned the impact of several external and internal shocks, prompting a solid economic recovery since the COVID-19 pandemic, despite increasing security issues. Meanwhile, the Human Development Index has increased from 0.44 in 2013 to 0.48 in 2021.
April 12, 2024
Algeria: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Algeria
Description: The Algerian economy was still emerging from the Covid pandemic when it was hit by spillovers from Russia’s war in Ukraine and by recurrent droughts. These shocks fueled inflation while high international hydrocarbon prices also boosted government revenue and exports. Algeria’s economy likely recorded a robust growth in 2023 and the external position remained solid, with a current account surplus for the second year in a row and further accumulation of international reserves. Inflation remains elevated and could become entrenched. The 2023–24 budgets aim at supporting the purchasing power of households but risk depleting the buffers that protect the budget from revenue volatility. Structural reforms are advancing with the enactment of the Monetary and Banking law and the implementation of program budgeting and the 2022 Investment Law. Investment in digitalization would strengthen governance and transparency, reduce corruption risks, and improve service delivery.