Country Reports
2024
December 20, 2024
Islamic Republic of Mauritania: Selected Issues
Description: The paper explores the financial development landscape in Mauritania, highlighting its bank-centric structure and limited financial market development. Despite a large number of banks, financial intermediation remains weak, with low private-sector credit to GDP, limited financial inclusion, and persistently high non-performing loan ratios. Structural challenges, including governance issues, connected lending practices, and insufficient financial infrastructure, exacerbate these inefficiencies. The paper introduces the Efficiency-Access and Depth Gap (EADG) metric, revealing a significant imbalance between profitability and financial intermediation/inclusion efforts among Mauritanian banks. Policy recommendations focus on consolidating the banking sector, enhancing regulatory frameworks, and fostering mobile banking and financial inclusion strategies to address these challenges. The findings underline the critical need for robust institutional reforms and stronger capital bases to support economic growth and improve financial intermediation in Mauritania.
December 20, 2024
Islamic Republic of Mauritania: Selected Issues
Description: The paper examines domestic revenue mobilization in Mauritania and proposes strategies to enhance tax revenue collection to address fiscal sustainability challenges and finance critical investment projects. Despite recent progress, Mauritania’s tax-to-GDP ratio remains below that of its peers, constrained by a complex legal framework, numerous derogatory tax regimes, and inefficiencies in revenue administration. The analysis indicates that Mauritania could increase tax revenues by up to 3.4% of GDP in the medium term, thus reducing its tax gap by one-third. Key policy recommendations include reducing VAT exemptions, replacing corporate tax exemptions with cost-based incentives, reforming the personal income tax system, broadening the consumption tax base, simplifying tax procedures, managing tax arrears more effectively, and strengthening tax compliance.
December 19, 2024
Guinea-Bissau: Seventh Review Under the Extended Credit Facility and Request for Modification of Performance Criteria and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Guinea-Bissau
Description: Guinea-Bissau continues to face a challenging economic and political environment. Recent downward shocks to cashew exports are adding pressures to the balance of payments and fiscal revenue. Tightening of regional financial conditions continue to raise borrowing costs. Since the political crisis in December 2023, underlying social tension has been high, and the next legislative election has been postponed to complete preparatory steps required by law. Despite these challenges, growth has been resilient, supported by strong public and private investments, and high producer prices of cashew nuts due to increased competition among exporters and strengthened securities measures. Risks to the outlook remain tilted towards the downside.
December 19, 2024
Benin: Fifth Review under the Extended Fund Facility and the Extended Credit Facility Arrangements, and the Second Review under the Resilience and Sustainability Facility-Press Release; Staff Report; and Statement by the Executive Director for Benin
Description: Benin’s macroeconomic performance appears robust 2½ years into the EFF and ECF arrangements. There are promising signs of economic transformation, with higher value-added exports and momentum in information and communications technology and tourism. The 2025 budget—the last year of fiscal adjustment under the current economic cycle—targets compliance with the WAEMU fiscal deficit norm of 3 percent of GDP. Benin’s reform program has gained traction with development partners, with budget support consistently exceeding expectations—complementing robust tax collection—and investor confidence re-affirmed by several sovereign credit upgrades. A key challenge ahead for Benin is to maintain the reform momentum and further strengthen inclusive policies for an economic transformation that generates jobs and benefits all Beninese. The authorities are pressing ahead with their reform agenda—with caution, appropriately.
December 19, 2024
Ecuador: 2024 Article IV Consultation and First Review Under the Extended Arrangement Under the Extended Fund Facility and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Ecuador
Description: Ecuador is making significant progress in the implementation of its economic reform program. The authorities have embarked on a set of decisive policy actions and reforms to address fiscal and external imbalances, supported by the 48-month Extended Fund Facility (EFF) arrangement approved by the Executive Board in May 2024 of SDR 3 billion (430 percent of quota, about US$4 billion). The core objectives of the EFF-supported program are to (i) strengthen fiscal sustainability, while protecting vulnerable groups; (ii) safeguard dollarization and macroeconomic stability; (iii) rebuild liquidity buffers; (iv) enhance financial stability and integrity; and (v) further advance the structural reform agenda to promote sustainable and inclusive growth.
December 19, 2024
The Union of the Comoros: Third Review under the Extended Credit Facility Arrangement and Request for Modifications of Performance Criteria and Waivers of Nonobservance of Performance Criteria -Press Release; Staff Report; and Statement by the Executive Director for The Union of the Comoros
Description: Following the January 14 presidential election, President Azali announced a new cabinet in July, introducing several new and youthful faces into the political scene. Amid this political transition, Comoros’ economy is showing signs of softening coupled with inflationary pressures driven by accelerating food prices. Credit to the private sector has slowed throughout this year as importers deleveraged following the significant ramp-up in borrowing over the last two years to meet high import prices. Import volumes—notably food products—have declined during 2024H1 while exports and public investment have both been lower than expected. Tax revenue administration efforts were hampered by post-elections unrest, the cholera epidemic, and severe weather events during the first half of 2024. Nonetheless, the external sector remains stable with adequate reserve cover above 7 months of imports.
December 19, 2024
Philippines: 2024 Article IV Consultation-Press Release; and Staff Report
Description: The Philippines has successfully navigated multiple external headwinds in recent years and is pursuing an extensive plan to achieve high and inclusive growth. After moderating in 2023, growth is expected to pick up in 2024-25, supported by gradual monetary policy easing. Inflation has declined to within the target band, though supply shocks pose upside risks. Risks to the growth outlook are tilted to the downside, including from recurrent commodity price volatility, escalation of geopolitical tensions and lower-than-expected payoffs from recent reforms. With macroeconomic policies well calibrated to achieve a soft landing in the near-term, expanding the economy's growth potential will be pivotal for the medium-term outlook.
December 19, 2024
Republic of Moldova: Sixth Reviews Under the Extended Credit Facility and Extended Fund Facility Arrangements, Request for modifications of performance criteria, and Second review Under the Resilience and Sustainability Facility Arrangement-Press Release; Staff Report; and Statement by the Alternative Executive Director for the Republic of Moldova
Description: This paper presents the Republic of Moldova’s Sixth Reviews under the Extended Credit Facility and Extended Fund Facility Arrangements, Request for Modification of Performance Criteria, and Second Review under the Resilience and Sustainability Facility Arrangement. Recovery from the multiple shocks is taking hold, and inflation has remained within the National Bank of Moldova’s target band since October 2023. However, downside risks remain large, mainly related to the geopolitical situation and renewed energy shocks. Prudent policies and maintaining buffers and robust contingency plans, including in the energy sector are needed to address looming risks. Fostering growth-friendly investment and reforms, supported by the EU accession process will help advance toward Moldova’s development objectives.