Country Reports
2024
July 29, 2024
Burkina Faso: 2024 Article IV Consultation and First Review Under the Extended Credit Facility and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Burkina Faso
Description: This paper focuses on Burkina Faso’s 2024 Article IV Consultation and First Review under the Extended Credit Facility Arrangement and Financing Assurances Review. Burkina Faso’s performance under the program has been positive. All quantitative performance criteria, all indicative targets but one, and most structural benchmarks for the first review were met; some structural benchmarks were implemented with delay. Burkina Faso faces multiple development challenges, including heightened security conditions, climate change, and food insecurity. The authorities are progressing in their fiscal consolidation efforts, structural reforms and fiscal governance measures, and the creation of fiscal space for priority spending. Growth accelerated in 2023 to 3.6 percent of gross domestic product, supported by a rebound in construction and expansion of the tertiary sector. Inflation significantly decreased, and the fiscal and debt positions improved. Growth is projected at 5.5 percent in 2024 but remains below potential in the medium term, and a lasting recovery is contingent on bringing security under control.
July 29, 2024
Republic of Croatia: Selected Issues
Description: This Selected Issues paper explains corporate sector balance sheet vulnerabilities in Croatia. It serves as a background analysis to the systemic risk assessment presented in the staff report and follows established approaches to stress-test the corporate sector. Croatian firms have significantly improved their balance sheets since the prolonged recession after the Global Financial Crisis, helped by deleveraging and narrowing country risk premium as Croatia advanced its euro adoption agenda. The calibration of shocks follows the macro-financial scenarios of the 2023 EU-wide banking sector stress tests by the European Banking Authority. Micro-level simulations confirm the resilience of the corporate sector against adverse shocks to profitability and financing costs. The well-capitalized banking sector overall is also found to have buffers to absorb negative spillovers from the corporate sector. The simulated results suggest that shocks to nonfinancial corporations (NFC) could significantly raise banks’ nonperforming loans. The declining borrowing costs and improving financial strength of NFCs in Croatia point to the need to examine both financing and nonfinancing related obstacles.
July 29, 2024
Republic of Congo: Selected Issues
Description: This Selected Issues paper focuses on the macroeconomic impacts of government domestic arrears in the Republic of Congo. Authorities have intensified mitigating efforts including improving fiscal space to accelerate repayment, improving debt transparency to allow for rapid recognition of arrears, and launching major reforms to improve prevention. Looking ahead, maintaining the pace of reform will be crucial. Priorities include further strengthening of fiscal buffers to ensure timely repayment, enhance debt coverage and transparency reforms to allow a holistic view of public debt, accelerating debt and PFM reforms to allow better management and control. Repayment efforts have accelerated but have failed in reducing arrears stock due to the inclusion of new stock of arrears. The effective implementation of the restructuring of the debt management office and related reforms especially the hiring of staff and their training to improve capacity and the operation of a new procedure manual will be crucial to enhance the effectiveness of the debt management office.
July 24, 2024
Republic of Lithuania: 2024 Article IV Consultation-Press Release; and Staff Report
Description: Lithuania has experienced fast income convergence over the past two decades and the economy is projected to return to growth this year after a shallow recession. However, higher inflation differentials following the shock triggered by Russia’s invasion of Ukraine have had an impact on competitiveness, even though Lithuania entered this crisis with an undervalued real effective exchange rate. At the same time, global fragmentation, long-term spending pressures, eroded corporate profitability, and pre-existing structural challenges in education, healthcare and the labor market continue weighing on productivity and growth. Thus, Lithuania needs prudent policies and decisive structural reforms to support sustained productivity growth and ensure higher living standards and continued convergence.
July 24, 2024
Niger: Fourth and Fifth Reviews under the Extended Credit Facility Arrangement, Requests for Waivers of Nonobservance of Performance Criteria, Modification of Performance Criteria, and Extension and Rephasing of Arrangement, and First Review under the Resilience and Sustainability Facility Arrangement, and Request for Extension and Rephasing of the Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Niger
Description: This paper presents Niger’s the Fourth and Fifth Reviews under the Extended Credit Facility Arrangement, Requests for Waivers of nonobservance of Performance Criteria, and Extension and Rephasing of Arrangement, and First Review under the Resilience and Sustainability Facility Arrangement, and Request for Extension and Rephasing of the Arrangement. Political instability and sanctions following the military takeover of July 2023 have severely and persistently affected economic and social conditions. Growth is expected to rebound briskly in 2024 to 10.6 percent due to the start of oil exports and ensuing spillover effects across the economy, as well as increased production in the agricultural sector, and the lifting of sanctions. Program implementation was broadly on track at end-June 2023 but was subsequently disrupted by the political crisis, which led to the accumulation of external and domestic debt service arrears. Fostering private sector development, supported by a stable financial system and financial inclusion, is vital for resilient and inclusive growth. Progress in implementing reforms under the RSF-supported program is welcomed. Stepped up implementation of the measures under the program is essential to build resilience to climate change and lay the foundations to unlock additional finance for climate-related investments.
July 24, 2024
Republic of Equatorial Guinea: Staff-Monitored Program-Press Release; and Staff Report
Description: A decade of steady decline in hydrocarbon production has put Equatorial Guinea's fiscal and external accounts under strain and brought the need for economic diversification to the fore. An Extended Fund Facility (EFF) arrangement (approved in 2019) expired in December 2022 without the completion of a single review.
July 23, 2024
Italy: Selected Issues
Description: This Selected Issues paper focuses on the paradox of Italy’s low fertility and low female labor force participation. Within-household allocation of housework tends to be relatively specialized in Italy, and with more limited burden-sharing in households with children. Social and cultural norms are frequently cited as one of the main reasons for Italy’s large time-use gender gaps. With ingrained norms, changing behaviors might be seen as very challenging. Yet Italy’s work-family outcomes have undergone significant shifts within a relatively short time span, most likely in response to large structural changes in the nature of employment contracts and the macroeconomic environment. In Italy, both fertility and female labor force participation lag behind peer countries. The number of births has fallen by a third over the last fifteen years, while female labor force participation remains very low. This uncommon combination points to the need to improve the compatibility of work and family life. Moreover, a large divide exists between Northern and Southern regions, with much lower female labor force participation but a similar fertility rate in the South, suggesting the presence of structural impediments, such as labor market rigidities and scarcity of childcare facilities.
July 23, 2024
Italy: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Italy
Description: The Article IV Consultation discusses that Italy’s economy has recovered well from the coronavirus disease and energy price shocks. Employment rose alongside real activity. Financial conditions have eased somewhat but remain tight. Growth is forecast to average around ¾ percent in 2024–2026 as continued ramp up in investment under the EU-financed National Recovery and Resilience Plan (NRRP) broadly offsets the drop in tax-credit financed residential investment. Frontloading adjustment would moderate risks from high public debt and make room for productivity-enhancing spending, aging costs, and absorbing potential shocks. In order to raise productivity, full and timely NRRP execution, with a follow up plan of critical public infrastructure investments, education reform, and improving the business climate are needed. Deeper capital markets would facilitate private investment while industrial policy should be used selectively to correct market failures. Improving the compatibility of work and family life is needed to raise the birth rate and the share of working women.
July 22, 2024
Republic of Mozambique: Poverty Reduction and Growth Strategy
Description: This paper presents a report on Poverty Reduction and Growth Strategy in the Republic of Mozambique. The vision and mission of the National Development Strategy 2025–2044 have been revised to reflect the collective aspiration and values that guide national development. While the vision remains centered on building a middle-income society where equity, security and well-being of the population are guaranteed, sustainability and competitiveness are a priority, the mission has been refined to promote human, economic and environmental development through integrated and results-oriented policies and actions. The revision of the National Development Strategy is a shared commitment to the country's future. By implementing this revised Strategy, Mozambique strengthens its capacity to face the challenges of the present and build a prosperous and sustainable future for all its citizens. Commitment is working together, with determination and vision, to achieve the objectives and fulfil the shared vision of progress and prosperity for all.