Vanuatu: 2009 Article IV Consultation: Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Alternate Executive Director for Vanuatu
IMF Staff Country Reports, May 27, 2009
Source details
- Canonical URL
- Vanuatu: 2009 Article IV Consultation: Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Alternate Executive Director for Vanuatu
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Bibliographic details
- Published: May 27, 2009
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451840599.002
Summary
- The staff report for Vanuatu’s 2009 Article IV Consultation discusses economic developments and policies.
- Vanuatu is well placed to take countercyclical measures should growth slow more than expected.
- Although close monitoring of banks is necessary given the rapid growth in the private sector credit last year, the wide differential in policy rates between Vanuatu and its major trading partners suggest that there is some scope for monetary easing if things deteriorate more than expected.
Key findings and areas of focus
- Economic developments and policies were the central focus of the staff report.
- Financial sector monitoring:
- Rapid growth in private sector credit last year warrants close monitoring of banks.
- Wide differential in policy rates between Vanuatu and its major trading partners suggests scope for monetary easing if conditions worsen.
- Fiscal and public financial management topics included:
- Budget planning and preparation
- Expenditure
- Public debt
- Public financial management (PFM)
- External and credit issues:
- Credit
- External debt
- Money
Policy implications and recommendations
- Preparedness for countercyclical fiscal measures if growth slows more than expected.
- Maintain close supervision of banks due to rapid private sector credit growth.
- Consider monetary easing if economic conditions deteriorate, given the policy rate differential with major trading partners.