## IMF Staff Completes 2016 Article IV Mission to the Republic of Congo

_IMF News, November 8, 2016_

## Source details

**Canonical URL:** [IMF Staff Completes 2016 Article IV Mission to the Republic of Congo](https://www.imf.org/en/news/articles/2016/11/08/pr16493-republic-of-congo-imf-staff-completes-2016-article-iv-mission)

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## Bibliographic details
- Published: November 8, 2016

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### Economic impact and outlook
- The Republic of Congo’s economy "continues to be severely impacted by the decline in international oil prices."
- Economic growth slowed to 2.3 percent in 2015 and "is projected to be lower still in 2016."
- Inflation "hit 4 percent in July 2016 (year on year)" and "is expected to moderate and to average about 2.5 percent over the medium term."
- International oil prices are expected to remain low and "the remaining lifetime of oil reserves is limited," shaping medium-term policy needs.

### Fiscal and debt situation
- Fiscal deficit "exceeded 18.5 percent of GDP in 2015," an increase "up by 10 percent of GDP from 2014."
- Public debt "rose above 70 percent of GDP at the end of 2015"—breaching the CEMAC convergence criterion.
- International reserves and government deposits "have declined sharply" and have "fallen below levels that are typically recommended for countries with pegged exchange rates and undiversified current account inflows."
- The financial sector has experienced rising nonperforming loans but "remains broadly resilient."
- 2016 saw "substantial macroeconomic imbalances" driven by "lower-than-expected oil revenues and continued elevated spending," with increased recourse to fiscal and external buffers and limited financing options.

### Key statistics and mission facts
- Mission dates: "visited Brazzaville during October 25-November 7, 2016."
- Growth: "2.3 percent in 2015."
- Inflation: "4 percent in July 2016 (year on year)"; medium-term average "about 2.5 percent."
- Fiscal deficit: "exceeded 18.5 percent of GDP in 2015"; change "up by 10 percent of GDP from 2014."
- Public debt: "rose above 70 percent of GDP at the end of 2015."
- Executive Board consideration: "expected to consider the staff report on the 2016 Article IV consultation in January 2017."

### Policy recommendations and priorities
- Implement stronger fiscal adjustment than envisaged in the draft 2017 budget to:
  - Support fiscal sustainability and mitigate macroeconomic stability risks.
  - Support reserve adequacy at the CEMAC regional level.
- Anchor medium-term fiscal adjustment on a further reduction in the non-oil primary deficit.
- Adopt realistic expenditure plans to:
  - Prevent the emergence of new arrears.
  - Safeguard social spending and counterpart funding for development projects.
- Continue efforts to rationalize public expenditures from their unusually high levels in recent years.
- Improve the quality and efficiency of capital expenditures.
- Mobilize non-oil revenue by:
  - Broadening the tax base through a systematic review and selective elimination of tax exemptions.
  - Strengthening tax and customs administration.
- Over the medium term, pursue a multi-pronged approach to support diversification aimed at sustainable and inclusive growth, including:
  - Medium-term perspective in fiscal planning and improved commitment control to prevent accumulation of domestic arrears and curtail increases in public debt.
  - A clear strategy for the repayment of existing arrears.
  - Improvements to the business environment, including strengthening governance and transparency and improving access to finance, to underpin private sector development and diversification.

### Engagement and next steps
- The mission met with senior officials including the Prime Minister; State Minister of Economy, Industrial Development, and Promotion of the Private Sector; Minister of Finance, Budget, and Public Portfolio; Minister of Planning, Statistics and Integration; senior officials of the National Directorate of the Central Bank; and representatives of parliament, civil society, the private sector, and development partners.
- "The IMF stands ready to continue to work with the Congolese authorities to address their policy challenges."
- Staff will prepare a report based on the mission’s preliminary findings that, subject to management approval, "will be presented to the IMF's Executive Board for discussion and decision."

*IMF press release — November 8, 2016.*

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## References

- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2016/11/08/pr16493-republic-of-congo-imf-staff-completes-2016-article-iv-mission_