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International Monetary Fund
An unprecedented policy response and rapid progress in vaccine development have helped pull the global economy from a deep recession. But the outlook is marked by high uncertainty and great divergence. Carefully calibrated policies and stronger international cooperation are vital to safely exit the crisis. Transformative policies should aim for fast convergence toward a green, digital, and inclusive future.
International Monetary Fund
As the COVID-19 crisis continues to unfold, uncertainty remains exceptionally high. The Fund has provided extraordinary financial support as well as timely analysis and policy advice during the first phase of the crisis, but additional efforts are needed to help members secure a durable exit, minimize long-term scarring, and build a more sustainable and resilient economy. Against this backdrop, and in line with the strategic directions laid out in the Fall 2020 Global Policy Agenda and the International Monetary and Financial Committee (IMFC) Communiqué, this Work Program puts forward a prioritized Board agenda for December 2020 to June 2021, focused on activities of most critical importance to our members.
International Monetary Fund. African Dept.
The COVID-19 pandemic is having an adverse impact on Rwanda’s economy, despite a sizeable policy response. Output in 2020 is projected to contract by 0.2 percent, compared to an 8 percent increase expected pre-pandemic. The government’s early actions helped contain the spread of the virus and mitigate its economic impact, supported by financing from Rwanda’s development partners, including from the IMF under the RCF. With the number of infections contained, the authorities are gradually easing up containment measures.
International Monetary Fund. African Dept.
The Cabo Verdean economy is facing considerable challenges stemming from the impact of the COVID-19 pandemic. Prior to the health crisis, economic growth was robust, the fiscal and external positions were improving, reserves were at comfortable levels, and public debt was on a downward trajectory. The pandemic is threatening to erode these gains and has generated significant financing needs. The authorities have been implementing policy and healthcare measures to address the fallout of the pandemic and protect vulnerable groups while seeking to safeguard macroeconomic stability.
International Monetary Fund. African Dept.
The COVID-19 pandemic is having a severe impact on Lesotho’s economy. Supply chains for major industries have been disrupted and a national shutdown to contain the virus curtailed economic activity with adverse social impacts. The economy is expected to be further hit by declining external demand for textiles and diamonds, shrinking remittances, and delays to major construction projects. The authorities are taking measures to contain the virus and are implementing plans to mitigate its health and economic consequences. The economic shock, as well as the additional required spending, have generated urgent balance-of-payments (BOP) needs. Lesotho does not have an arrangement with the Fund.
International Monetary Fund. African Dept.
Guinea is being severely affected by the COVID-19 pandemic. A local outbreak is spreading rapidly, adding pressure to the fragile social context and putting a strain on the health system. Containment measures have started to negatively impact domestic economic activity. Furthermore, the sharp slowdown in China (Guinea’s main export market) has hindered mining exports and tax revenues, putting pressure on Guinea’s external and fiscal position. Since the completion of the fourth ECF review, worsening global conditions and the local outbreak have deteriorated Guinea’s short-term outlook. Real growth is expected to sharply decelerate to 1.4 percent in 2020.
International Monetary Fund. African Dept.
This paper presents Benin’s Sixth Review Under the Extended Credit Facility (ECF) Arrangement, and Request for Augmentation of Access. Program implementation continues to be strong, with all end-December 2019 quantitative performance criteria and the structural benchmarks under review being met. Economic activity is expected to decelerate sharply in 2020 due to the coronavirus disease 2019 pandemic. The authorities have prepared a response plan of 1.7 percent of gross domestic product (GDP) to contain health risks and support the economy. As a result of the projected revenue shortfall and the new measures, the 2020 fiscal deficit is revised upward to 3.5 percent of GDP. The authorities’ policies under the ECF-supported program are substantially adapted to cope with the health and economic emergency. The IMF staff supports the completion of the sixth review under the ECF-supported arrangement. Staff also supports the request for an augmentation of access equivalent to 61.4 percent of quota to address larger financing needs.
International Monetary Fund. Asia and Pacific Dept
This paper presents Nepal’s Request for Disbursement Under the Rapid Credit Facility (RCF). The coronavirus disease 2019 pandemic is having a severe impact on Nepal’s economy. During recent months, remittances have fallen considerably, tourist arrivals collapsed, and domestic activity has taken a hit amid social distancing measures. The authorities are taking proactive, well-targeted measures to address the human and economic impact of the pandemic, while preserving macroeconomic stability. Such measures include increasing health spending, strengthening social assistance to protect the most vulnerable, and providing bank liquidity and credit support. Additional assistance from development partners, beyond what had already been committed before the outbreak of the pandemic, is needed to close the remaining balance of payments gap and ease the fiscal situation. The authorities’ commitment to high standards of transparency and governance in the management of financial assistance is welcome. The IMF staff assesses that Nepal meets the RCF eligibility requirements and supports the request. Public debt is at low risk of distress and there is adequate capacity to repay the Fund. The IMF disbursement is expected to play a catalytic role in securing additional financing from Nepal’s development partners.
International Monetary Fund. African Dept.
This paper discusses Requests for Disbursement Under the Rapid Credit Facility (RCF) and Rephasing of Access Under the Extended Credit Facility (ECF) Arrangement. The coronavirus disease 2019 (COVID-19) shock hit the economy hard amid an already challenging social and security situation. The decline in economic activity, spillovers from global trade and financing shocks, along with fiscal measures to combat the crisis have created an urgent balance-of-payments and fiscal financing needs. The authorities have responded quickly to the pandemic with containment measures, stepped up healthcare response, and emergency measures to support households and business affected by the outbreak. The regional central bank responded with measures to support liquidity in the banking system. Given the urgent balance of payment need caused by the COVID-19 pandemic and the infeasibility of completing a review under the ECF arrangement, staff supports these requests and welcomes commitments to safeguard transparency and accountability in the use of emergency funds. The RCF is expected to cover about 40 percent of the financing gap in 2020 and is expected to play a catalytic role. The authorities are actively engaged with other donors, including the World Bank, to cover the remaining financing needs.
International Monetary Fund. African Dept.
This paper presents Chad’s Requests for Disbursement Under the Rapid Credit Facility, Extension of the Extended Credit Facility Arrangement, and Rephasing of Access. In response to the coronavirus disease 2019 outbreak, the authorities have taken strong measures to halt the community spread of the virus. They are also scaling up health-related spending and are considering a set of economic measures to support households and businesses. Given the sudden nature of the shocks and their widespread impact, the authorities will be temporarily relaxing the fiscal deficit to allow for the scaling up of health care spending and to accommodate the impact of the sharp drop in oil prices. In order to safeguard debt sustainability, they remain committed to the medium-term fiscal path and will implement the needed adjustment measures as soon as the current crisis abates.