This paper focuses on Ukraine’s Ex-Post Evaluation of Exceptional Access Under the 2015 Extended Arrangement. Sound fiscal and monetary policies since the 2014–2015 crisis have resulted in a sharp reduction in Ukraine’s external and internal imbalances. Public debt was put on a downward path, inflation has declined, and international reserves have recovered. The new Stand-By Arrangement will provide an anchor for the authorities’ efforts to address the impact of the crisis, while ensuring macroeconomic stability and safeguarding achievements to date. Together with support from the World Bank and the European Union, it will help address large financing needs. The program will focus on safeguarding medium-term fiscal sustainability, preserving central bank independence and the flexible exchange rate, and enhancing financial stability while recovering the costs from bank resolutions. The National Bank of Ukraine has skillfully managed monetary policy during a very challenging period. Central Bank independence should be preserved, and monetary and exchange rate policies should continue to provide a stable anchor in the context of the inflation-targeting regime, while allowing orderly exchange rate adjustment and preventing liquidity stress.
This study investigates the likely macroeconomic impact of various structural reforms that align the Chilean regulatory framework with international best practices. In this context, the analysis: i) presents a comparison across a large set of structural indicators; ii) identifies policy gaps with respect to OECD countries; and iii) provides quantification of the likely growth and fiscal impact of policy reforms needed to close the gaps. Chile’s economy is likely to benefit from streamlining business regulation and licensing, strengthening innovation and R&D capacity, improving labor market flexibility, and enhancing active labor market policies. Overall, the study presents a scenario in which Chile closes structural gaps with OECD’s 25th percentile over five years, with up to 6 percent higher output level and a cumulative net fiscal gain of about ½ percent of GDP.
This 2016 Article IV Consultation highlights that economic outcomes in Sierra Leone have deteriorated sharply over the past two years. Growth declined dramatically from 20.7 percent in 2013, to 4.6 percent in 2014, and further to -21.1 percent in 2015. The budget is under severe pressure. Between mid-2014 and end-2015, the Leone depreciated 22 percent against the U.S. dollar. Banking sector vulnerabilities have increased. Living standards have also deteriorated significantly since late 2014. The medium-term outlook is somewhat positive, with growth projected to recover to 4.3 percent in 2016, increasing gradually to about 6.5 percent by 2020.
This 2016 Article IV Consultation highlights that economic recovery in France is solidifying. The economy is projected to expand by 1.5 percent in 2016, primarily driven by strong consumer spending. There are also signs of a cyclical recovery in investment, and the slump in residential construction appears to be bottoming out. By contrast, net exports are declining as demand from trading partners has slowed. Private sector job creation has remained lackluster, and the unemployment rate has hovered at about 10 percent. The government has continued to advance important reforms to help create the conditions for improved economic performance. As for budget policies, there are ongoing efforts to contain spending growth at all levels of government while easing taxes.
This 2016 Article IV Consultation highlights that the recovery in euro area has strengthened recently. Lower oil prices, a broadly neutral fiscal stance, and accommodative monetary policy are supporting domestic demand. However, inflation and inflation expectations remain very low, below the European Central Bank’s medium-term price stability objective. Euro area GDP growth is expected to decelerate from 1.6 percent in 2016 to 1.4 percent in 2017, mainly owing to the negative impact of the U.K. referendum outcome. Growth five years ahead is expected to be about 1.5 percent, with headline inflation reaching only 1.7 percent.