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On behalf of my Malagasy authorities, we would like to express our appreciation to Executive Directors, Management and Staff of the International Monetary Fund for their continued support to Madagascar. Fund assistance is especially critical in the current challenging global environment and in the face of more frequent climate shocks that are exacerbating the country's fragility, with notably increasing food insecurity and growing poverty. It is indeed noteworthy that the Board meeting on Madagascar takes place after the intense Cyclone Freddy that hit the eastern part of the country last Tuesday and claimed several lives, displaced thousands more, and caused extensive physical damage; compounding the effects of the earlier tropical storm Cheneso that killed more than 30 people in January 2023. The authorities are actively deploying assistance to the victims of these extreme weather events with the support of partner international organizations. They appreciate the staff report which provides a good account of the discussions on policies over medium-term and the Selected Issues paper that addresses key priority issues on the authorities' development agenda.
Commercial Real Estate (CRE) debt constitute a large portion of corporate debt. Due to the funding structure this creates substantial risks for the financial system and the real economy, in general, due to broader spillover effects. Stress tests, conducted to assess the resilience of CRE sector, show that the median interest rate coverage would drop below one in a severe scenario, resulting in a ¾ of firms with debt-at-risk. CRE sector’s concentration, interconnectedness and insufficient disclosure of liabilities calls for close monitoring of liabilities structure and adjusting banks’ capital levels to better reflect current risks.
1. Economic recovery continued in 2022, at a slightly slower pace than envisaged. Growth projections for 2022 have been revised downward to 3.4 percent compared to 3.8 percent during the second review. This revision reflects spillovers from Russia’s war in Ukraine, inflationary pressures, supply chain disruptions, tight global financial conditions, and the security crisis in certain regions. It also reflects developments in the oil and gas sector.
(IEO), which provides an early evaluation of the Fund’s emergency response to the initial stage of the COVID-19 pandemic and seeks to draw lessons from the experience for responding to possible future global crises. They highlighted the report’s key finding that the Fund’s response was effective and agile to a crisis like no other, despite the extraordinary challenges and risks, as the Fund rapidly adapted its lending framework and internal processes to serve the membership, help to close large financing gaps, and give confidence to the membership and markets by making its resources available expeditiously under adequate safeguards. Besides lending, Directors noted that the Fund also undertook useful analytical work and gave extensive and timely policy advice and capacity development. They welcomed the report’s finding that the Fund’s corporate response was adapted quickly, including by reprioritizing work, introducing HR and budget initiatives, and swiftly embracing the virtual environment. Directors especially commended staff for their strong dedication during these challenging circumstances.