{
  "title": "IMF Executive Board Concludes 2018 Article IV Consultation with Liberia",
  "publication": "IMF News, June 13, 2018",
  "sourceUrl": "https://www.imf.org/en/news/articles/2018/06/13/pr18235-imf-executive-board-concludes-2018-article-iv-consultation-with-liberia",
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  "summary": "Mission and timing:",
  "publishDate": "2018-06-13",
  "sections": [
    {
      "heading": "Context and baseline scenario",
      "content": "- Mission and timing:\n  - The Executive Board concluded the Article IV consultation with Liberia on June 8, 2018; press release dated June 13, 2018.\n  - The baseline scenario is staff’s interpretation of the authorities’ stated policies as articulated at the time of the March 2018 mission.\n- Country situation:\n  - A new government is in place with a mandate to achieve ambitious development objectives.\n  - Liberia’s economy appears poised for recovery: growth bottomed out in 2016 and edged to 2.5 percent in 2017.\n  - Decline in aid inflows (which were elevated during 2014–16) has put pressure on the exchange rate and fiscal resources.\n  - The government faces a demanding development agenda while managing near-term adjustments and safeguarding macroeconomic stability.\n- Risks:\n  - Main upside risk: an increase in commodity prices and output.\n  - Main downside risks: difficulties in mobilizing resources to fill the financing gap and in pursuing structural and institutional reforms."
    },
    {
      "heading": "Executive Board assessment and policy priorities",
      "content": "- Overall judgment:\n  - Directors noted the economy appears poised for recovery but significant fragilities remain.\n  - Assuming sound policies, Directors agreed the medium‑term outlook is favorable, albeit with risks.\n  - Directors welcomed the authorities’ pro‑poor agenda and stressed that macroeconomic stability is essential for advancing this agenda.\n- Fiscal policy and debt sustainability:\n  - Need to anchor fiscal policy with the goal of ensuring debt sustainability over the medium term.\n  - Urged increased efforts to mobilize additional domestic resources.\n  - Specific revenue-side action: enhance the IT system of the revenue authority to improve tax compliance and efficiency.\n  - Emphasized improved governance, greater fiscal transparency and accountability to improve spending efficiency.\n  - Welcomed efforts to contain the public wage bill and encouraged redirection of budgetary expenditures to capital spending, especially for rebuilding infrastructure.\n  - Future debt obligations should be undertaken transparently, limited to concessional terms, with effective implementation of infrastructure projects.\n- Monetary policy and central bank:\n  - Maintaining macroeconomic stability hinges on effective implementation of monetary policy.\n  - Recapitalization of the Central Bank of Liberia (CBL) would be necessary to equip it with effective operational tools.\n  - Need to safeguard international reserves, and preserve governance principles and central bank independence.\n- External sector and exchange rate:\n  - Strengthen the external position by allowing greater exchange rate flexibility while maintaining price stability.\n  - Institute structural reforms to improve productivity and competitiveness and reduce the public saving‑investment gap.\n- Financial sector and banking risks:\n  - Need to reduce risk in the banking sector by reducing nonperforming loans, including by clearing government obligations to the banks.\n  - Complete implementation of the CBL’s Action Plan of reform.\n  - The remittance surrender requirement, while currently appropriate, should be lifted when foreign exchange market conditions allow.\n- Data and capacity development:\n  - Acknowledged recent improvement in trade and aid data but serious data shortcomings remain.\n  - Urged continued enhancement of data quality, especially in national accounts and external data.\n  - Underscored the key role of capacity development and technical assistance for Liberia."
    },
    {
      "heading": "Selected economic indicators (2016–19)",
      "content": "- Output\n  - Real GDP growth (%): 2016: -1.6; 2017: 2.5; 2018: 3.2; 2019: 4.7\n- Prices\n  - Inflation – average (%): 2016: 8.8; 2017: 12.4; 2018: 11.7; 2019: 10.5\n- Central Government (percent of GDP; fiscal year July 1 to June 30; commitment basis)\n  - Revenue and grants (% of GDP): 2016: 51.9; 2017: 33.3; 2018: 31.0; 2019: 28.2; with revised GDP column shows 2019: 28.3\n  - Expenditure (% of GDP): 2016: 56.1; 2017: 36.0; 2018: 35.8; 2019: 33.4\n  - Fiscal balance (% of GDP): 2016: -4.2; 2017: -2.7; 2018: -4.8; 2019: -5.2; with revised GDP column shows 2019: -5.1\n  - Public Debt (% of GDP) (excluding central government debts from the Central Bank of Liberia): 2016: 28.6; 2017: 18.3; 2018: 24.6; 2019: 30.8\n- Money and Credit\n  - Broad money (% change): 2016: -2.5; 2017: 1.7; 2018: 6.0\n  - Credit to private sector (% change): 2016: 2.3; 2017: 14.7; 2018: 10.0\n- Balance of Payments\n  - Current account (% of GDP): 2016: -28.9; 2017: -18.5; 2018: -22.7; 2019: -22.4; with revised GDP column shows 2019: -22.3\n  - Reserve (in months of imports)4: 2016: 3.0; 2017: 3.1\n  - External public debt (% of GDP)2: 2016: 28.0; 2017: 17.9; 2018: 22.7; 2019: 26.3; with revised GDP column shows 2019: 29.9\n- Exchange rate\n  - NEER (% change): 2016: -7.3; 2017: -16.7\n  - REER (% change): 2016: 0.1; 2017: -9.6\n- Notes on indicators:\n  - The numbers expressed in percent of GDP are not comparable to those referenced in IMF Country Report 17/348 due to the revisions to GDP estimates.\n  - Reserve measure in months of next year's imports excludes imports related to UNMIL operations and FDI projects such as iron-ore concessions.\n  - Sources: Liberian authorities; IMF staff estimates.\n\nIMF Communications Department — Press Release No. 18/235 (June 13, 2018).\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Liberia and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.imf.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2018/06/13/pr18235-imf-executive-board-concludes-2018-article-iv-consultation-with-liberia"
    }
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    "Published: June 13, 2018",
    "Mission and timing:",
    "Country situation:",
    "Risks:",
    "Overall judgment:",
    "Fiscal policy and debt sustainability:",
    "Monetary policy and central bank:",
    "External sector and exchange rate:",
    "Financial sector and banking risks:",
    "Data and capacity development:",
    "Output",
    "Prices",
    "Central Government (percent of GDP; fiscal year July 1 to June 30; commitment basis)",
    "Money and Credit",
    "Balance of Payments",
    "Exchange rate",
    "Notes on indicators:",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[Liberia and the IMF](http://www.imf.org/external/country/LBR/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.imf.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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