Country Reports
2025
April 22, 2025
Republic of Azerbaijan: Financial Sector Assessment Program-Financial System Stability Assessment
Description: This paper focuses on the Republic of Azerbaijan’s Financial Sector Assessment Program as part of Financial System Stability Assessment. Azerbaijan’s economy has recovered from two downturns prompted by the collapse of global oil prices in 2015 and coronavirus disease 2019 pandemic in 2020. An intensification of regional conflicts poses risks to the economy. Similarly, the high reliance on oil and gas revenues renders Azerbaijan vulnerable to oil and gas price declines. This in turn would impact banks’ asset quality and liquidity. Key structural risks to banks stem from substantial reliance on volatile wholesale corporate deposits; continued high financial dollarization, particularly in business loans and deposits; and high credit concentration. Further measures to strengthen regulation and supervision would reinforce financial sector resilience. As noted in previous FSAPs, addressing long-standing issues would entail fully implementing a consolidated supervision framework; safeguarding the Central Bank of the Republic of Azerbaijan’s (CBA) independence; establishing an interagency body for crisis preparedness and management; and giving the CBA full powers for bank resolution.
April 15, 2025
Suriname: Ninth Review Under the Extended Arrangement Under the Extended Fund Facility, Request for a Waiver of Nonobservance of Performance Criterion, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Suriname
Description: This paper presents Suriname’s Ninth Review Under the Extended Arrangement under the Extended Fund Facility, Request for a Waiver of Nonobservance of Performance Criterion, and Financing Assurances Review. The objectives of the program have been broadly achieved. The economy is growing, inflation is receding, public debt is declining, the autonomy and governance of the central bank have been strengthened, and investor confidence is returning. The main near-term policy priority is to maintain fiscal discipline in the run-up to the elections while protecting the vulnerable. Building on the progress made under the program, the authorities should strengthen the fiscal framework, including through the operationalization of the recently enacted fiscal rules supported by the appropriate institutional mechanisms. The implementation of these critical reforms will enable Suriname to efficiently and transparently manage its newly found oil resources. The authorities should persevere with their ambitious structural reform agenda to strengthen institutions, address governance weaknesses, build climate resilience, improve data quality and address gender gaps.
April 14, 2025
Antigua and Barbuda: 2025 Article IV Consultation-Press Release; and Staff Report
Description: The 2025 Article IV Consultation highlights that Antigua and Barbuda’s post-pandemic economic expansion is continuing. Real output is estimated to have surpassed pre-pandemic levels in 2024, with growth estimated at 4.3 percent, driven by strong tourism and one-off events. The recovery in nominal gross domestic product (GDP), along with improved fiscal balances, brought down the public debt from around 100 percent of GDP in 2020 to 67 percent in 2024. However, gross financing needs are projected to remain around 10 percent of GDP in the medium term. Recent improvements in tax revenue are welcome, with further domestic revenue mobilization needed in the medium term to ensure fiscal sustainability. Antigua and Barbuda’s tax revenues remain below the authorities’ fiscal resilience guideline targets and are low by peer country standards. Targeted efforts to increase educational opportunities, employer-employee matching at the One Stop Employment Centre, and the completion of the Skills Demand Survey, are warranted.
April 11, 2025
Morocco: Request for an Arrangement Under the Flexible Credit Line and Cancellation of Current Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Morocco
Description: The Moroccan economy showed remarkable resilience to recent shocks, although a succession of droughts severely curtailed agricultural production and pushed unemployment to historical highs. Morocco's very strong institutional and policy framework has been effective in addressing these shocks, with well-calibrated fiscal, monetary, and financial policies. The authorities continue to implement their ambitious structural reform agenda, towards a more resilient, greener, inclusive, private sector-led growth, and further strengthening their institutional policy frameworks. The authorities remain fully committed to maintaining very strong policies and policy frameworks.
April 11, 2025
Argentina: Request for an Extended Arrangement Under the Extended Fund Facility-Press Release; Staff Report; Staff Supplement; and Statement by the Executive Director for Argentina
Description: Inheriting an economy on the verge of a balance of payment crisis, the Milei administration implemented a stabilization plan centered on a strong fiscal anchor, an initial large step devaluation (followed by a crawling peg), and an ambitious deregulation agenda. This has yielded a rapid disinflation, the first primary surplus in almost two decades, an initial turnaround in reserves, and a strengthened balance sheet of the central bank, all of which contributed to sharply lower sovereign spreads. Despite the adjustment, the economy and real wages have been recovering since mid-2024, supporting rapid improvements in social indicators. Nevertheless, Argentina’s vulnerabilities and challenges are substantial, as external buffers remain very weak, inflation is still elevated, and many structural impediments to investment and employment persist. Recognizing remaining challenges and sharply rising global risks, the authorities are requesting medium-term balance of payments assistance under a new Extended Fund Facility (EFF) arrangement to address Argentina’s weak balance of payments position, maintain external and internal stability and create conditions for stronger and more sustainable growth.
April 11, 2025
Principality of Andorra: Selected Issues
Description: This Selected Issues paper focuses on fiscal implications of aging in Andorra. Andorra is undergoing a rapid demographic transformation as its population ages. Aging is expected to put significant pressure on the country’s fiscal position, particularly through rising spending on pensions and healthcare. This research has focused on the direct impact of aging on pension and healthcare systems. Comprehensive pension and healthcare reforms are needed to avoid straining public finances. In addition, a comprehensive analysis and preparation including a proactive immigration policy will be vital to prepare the economy for an aging population. The paper discusses recent population and demographic trends in Andorra. It analyzes the impact of these trends on the pension system in Andorra. The paper estimates the impact of aging on healthcare expenditures. The authorities must plan for these changes and adjust accordingly. Despite the challenges, Andorra is in a strong position to undertake necessary pension and healthcare reforms that will help maintain its macroeconomic stability in the face of population aging.
April 11, 2025
Principality of Andorra: 2025 Article IV Consultation-Press Release; and Staff Report
Description: The 2025 Article IV Consultation discusses that the Andorra economy continues to be resilient and to grow above its long-term potential. Growth in 2024 surprised on the upside at 2.1 percent, driven by the service, banking and construction sectors. Early fiscal reform is paramount. Pension expenditures will increase by 6.7 percentage points while healthcare expenditures will increase by 2 percentage points by 20250. Concluding the pension reform in an expeditious and comprehensive manner is needed to ensure the sustainability of the social security fund in the long run. Ambitious structural reforms can help unlock investment and lift productivity, support the diversification of the economy, and help mitigate climate change. A comprehensive set of reforms should first address frictions, notably labor and housing shortages. Establishing a business environment conducive to higher investment is key, notably by reducing administrative rigidities associated with doing business in Andorra. Finally, the authorities should support the development of higher value-added services and sectors, including the digital economy.
April 8, 2025
Slovak Republic: Financial Sector Assessment Program-Technical Note on Systemic Risk Analysis and Stress Testing
Description: The Financial Sector Assessment Program (FSAP) for the Slovak Republic implemented an extensive analysis of systemic risks and assessed the resilience of the banking sector. It identified key vulnerabilities and evaluated sectoral exposures, assessed corporate and household risks, and banking sector solvency and liquidity risks, and explored interconnectedness and contagion risks.
April 8, 2025
Slovak Republic: Financial Sector Assessment Program-Technical Note on Regulation and Supervision of Less Significant Institutions
Description: The FSAP conducted a targeted assessment of the effectiveness of banking regulation and supervision in the Slovak Republic focusing on less significant institutions (LSIs). In scoping this review, the 2007 FSAP recommendations as well as relevant Euro-Area (EA) and global regulatory and market developments were taken into account. The review focused on selected areas including the supervisory independence and powers of Národná banka Slovenska (NBS), corrective and sanctioning measures, its supervisory strategy and approach for LSIs, oversight of key risks including credit, liquidity, interest rate risk in the banking book (IRRBB), operational/IT and climate related financial risks, governance and the strength of the LSI’s risk management policies and practices. The assessment also reviewed NBS’ approach to supervising AML/CTF risk for banks.
April 8, 2025
Slovak Republic: Financial Sector Assessment Program-Technical Note on Macroprudential Policy Framework and Tools
Description: Since the 2007 FSAP update, the Národná banka Slovenska (NBS) has made significant progress in implementing and advancing the macroprudential policy framework. In response to a build-up of mortgage risks and imbalances in the residential real estate market, the NBS, as the designated macroprudential authority, issued a non-binding recommendation in 2014 on loan-to-value (LTV), debt-service-to-income (DSTI), and maturity limits. These recommendations became binding in early 2017 and have been progressively tightened, including by adding a debt-to-income (DTI) limit to the regulatory toolkit. Borrower-based measures (BBMs) have been complemented by the activation of a counter cyclical capital buffer (CCyB) in 2017, supplementing existing capital conservation buffer (CCoB) and other systemically important institutions (O-SII) buffers. Authorities have also established a credit register to collect individual borrower data for households. As a member of the euro area, Slovakia collaborates extensively with European regulators on macroprudential policymaking.