Guinea-Bissau: Use of Fund Resources — Request for Third Purchase Under Emergency Post-Conflict Assistance
IMF Staff Country Reports, July 31, 2009
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Bibliographic details
- Published: July 31, 2009
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451815870.002
Macroeconomic outlook and balance of payments
- Global economic developments, especially lower export demand and prices, are expected to slow growth significantly and put pressure on the balance of payments.
- The authorities are requesting a third Emergency Post-Conflict Assistance (EPCA) purchase of 12.5 percent of quota to support their 2009 economic framework.
- A third EPCA purchase would give the authorities time to demonstrate a track record of policy performance that could pave the way for a new Poverty Reduction Growth Facility arrangement.
Fiscal framework and public finances
- The 2009 fiscal framework aims to stabilize public finances and avoid new domestic arrears.
- Priority policy objective: stabilization of public finances to prevent accumulation of domestic arrears.
Program design and policy implications
- Emergency assistance instrument: Emergency Post-Conflict Assistance (EPCA).
- Requested operation: third EPCA purchase of 12.5 percent of quota.
- Intended outcome: provide short-term balance of payments support and policy space to establish a track record sufficient for transitioning to a longer-term Poverty Reduction Growth Facility arrangement.
Key findings and policy recommendations
- Findings:
- Lower export demand and prices are central risks that will slow growth significantly.
- Balance of payments pressures are expected as a result of adverse external developments.
- Policy recommendations:
- Implement the 2009 fiscal framework to stabilize public finances.
- Avoid new domestic arrears to preserve fiscal credibility.
- Use the third EPCA purchase to secure time for demonstrating consistent policy performance toward a PRGF arrangement.
Source: Guinea-Bissau: Use of Fund Resources: Request for Third Purchase Under Emergency Post-Conflict Assistance: Staff Report; Staff Supplement; Press Release; and Statement by the Executive Director for Guinea-Bissau, July 31, 2009.