IMF Staff Country Reports

This paper discusses the Republic of Congo’s Fourth Review under the Three-Year Arrangement under the Extended Credit Facility, Requests for Modification of Performance Criteria, Waivers of Nonobservance of Performance Criteria, and Financing Assurances Review. Economic recovery gained momentum amid challenges from inflationary pressure and an uncertain global environment. Program performance was broadly satisfactory, but structural reforms experienced delays. Despite external arrears remaining below the de-minimise threshold, public debt is assessed as sustainable but ‘in distress’ due to frequent accumulation of new external arrears and uncertainty about the size of domestic arrears. While in the short term both the non-oil and the oil sector will drive economic growth, the non-oil sector is poised to take over as dominating driver over the medium term, with diversification further deepening. Broader investment could slow with further interest rate hikes and tightening external financing conditions. Sustained reform implementation spanning public financial and debt management, governance, and transparency will be critical to attaining higher, more resilient and inclusive growth.