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International Monetary Fund. Western Hemisphere Dept.
This 2019 Article IV Consultation discusses Colombia’s economy that is improving drastically and is supported by very strong policy frameworks and well-executed policies. The recovery is gaining momentum and external imbalances have widened. Despite weaker-than-expected external demand, activity is expected to accelerate in 2019. Rebounding investment, continued policy support, and substantial migration from Venezuela are expected to lift growth to 3.6 percent while the current account deficit is expected to remain wide. The authorities expect the recovery to gather momentum in 2019 and inflation to remain close to target. Structural reforms are needed to boost inclusive growth and enhance external competitiveness. Addressing infrastructure gaps, strengthening governance and the rule of law, reducing informality, and enhancing customs and other trade practices are crucial. The draft National Development Plan rightly identifies key priorities and lays out a roadmap for reforms.
International Monetary Fund. Western Hemisphere Dept.
Weak growth and underlying structural vulnerabilities persist in both Curaçao and Sint Maarten. Worsened macroeconomic conditions—reflecting the spillovers from one of Curaçao’s largest trading partners and the devastation from Hurricanes Irma and Maria in Sint Maarten—make the need for policy adjustment and structural reforms aimed at ensuring fiscal sustainability, enhancing competitiveness, strengthening investor confidence, and developing capacity more urgent.
International Monetary Fund. Western Hemisphere Dept.
This 2018 Article IV Consultation highlights that in 2018, Dominica’s output is projected to decline by 14 percent and to take about 5 years to recover to pre-hurricane levels. The fall in output and government revenue, coupled with increased expenditure for rehabilitation and reconstruction, will lead to a substantial worsening of fiscal and external deficits. However, signs of recovery, particularly in construction and the public sector, have already started to emerge. The risks to the outlook include the budget becoming financially constrained and unable to sustain adequate investment given high debt, limited buffers, weak revenue, and urgent needs for reconstruction spending. Other risks include financial instability stemming from undercapitalization of systemic financial institutions, recurrent natural disasters, and external competitiveness challenges.
International Monetary Fund. Western Hemisphere Dept.
This 2018 Article IV Consultation highlights that Colombia’s outlook is favorable as continued efforts to advance the structural reforms will foster economic diversification and productivity growth. In 2017, adequate policy management brought Colombia near completion of its adjustment to large external shocks while further advancing inclusive growth. Economic growth moderated as private investment and consumption weakened in line with lower national income. Economic growth is expected to rebound strongly in 2018 and further over the medium-term, led by strengthening investment and exports. The combined impact of the structural tax reform, a brighter outlook for oil prices and the authorities Fourth Generation infrastructure agenda will underpin investment while reducing Colombia’s relatively large infrastructure gap.
International Monetary Fund. Western Hemisphere Dept.
This 2017 Article IV Consultation highlights that Dominica’s recovery from Tropical Storm Erika (August 2015) has been slower than anticipated, with output growth of 1 percent in 2016, dragged down by a storm-related decline in manufacturing. Moreover, capacity constraints and unfavorable weather slowed public investment more than anticipated. Despite ample liquidity, bank credit to the private sector remains weak, although this is in part relieved by growing lending by credit unions. Growth is projected to accelerate to above 3 percent in 2017–18 on the back of a pickup in public investment and several large-scale private projects with citizenship-by-investment and grant financing.
International Monetary Fund. Western Hemisphere Dept.
This 2017 Article IV Consultation highlights the expansion of Guyana’s real economic activity by 3.3 percent in 2016. Subdued agricultural commodity prices, bad weather, and delays in public investment weighed down activity, while large increases in gold output helped support growth. Consumer prices increased by 1.5 percent in the 12 months ending in December 2016 as weather-related shocks to food prices reversed the deflationary trend. The macroeconomic outlook is positive for 2017 and the medium term. Growth is projected at 3.5 percent in 2017, supported by an increase in public investment, continued expansion in the extractive sector, and a recovery in rice production.
International Monetary Fund. Western Hemisphere Dept.
This 2017 Article IV Consultation highlights Nicaragua’s robust macroeconomic performance in 2016. Real GDP grew by 4.7 percent in 2016, supported by strong domestic demand, while inflation remained subdued at 3.1 percent as of the end of 2016, owing largely to the contribution of food prices. The current account deficit for 2016 is estimated to have narrowed to 8.6 percent of GDP, compared with 9 percent in 2015. This consolidation is largely explained by maquila exports, which have been better captured owing to improvements in statistical compilation. The current account deficit remained financed by foreign direct investment and other long-term inflows.
International Monetary Fund. Western Hemisphere Dept.
This 2016 Article IV Consultation highlights that economy of St. Kitts and Nevis continued its strong growth at about 5 percent, recording the strongest growth in the region during 2013–15. Strong growth has been underpinned by construction and tourism sector activity and their favorable spillovers on the rest of the economy, supported by surging inflows from its Citizenship-by-Investment (CBI) program. Large CBI inflows continued in 2015, albeit at a slower pace. The medium-term outlook is positive, but remains dependent on developments in CBI inflows. Growth is expected to moderate to 3.5 percent in 2016 and 3 percent, on average, over the medium term.
International Monetary Fund. Western Hemisphere Dept.
This paper discusses recent economic developments, the outlook, and risks for the Czech Republic. The economy has been growing at an exceptionally strong pace. Driven by robust domestic demand, output expanded by 4.2 percent—the highest rate in the central and eastern European region—in 2015. Labor market performance has been strong. Fiscal performance was better than budgeted in 2015. The banking sector is stable, and credit growth continues to strengthen. However, economic activity is expected to slow in 2016. Private consumption will remain robust on the heels of higher disposable income and employment, but the projected slowdown in EU-fund absorption will weigh on growth.
International Monetary Fund. European Dept.
This 2015 Article IV Consultation highlights that Aruba has been recovering from a severe double-dip recession. The economy faced two major shocks over the past five years—the global financial crisis and shutdown of the Valero oil refinery in 2012. After a strong recovery in 2013 with growth reaching 4.75 percent, the pace of activity moderated in 2014. In 2015, growth is projected to rise to 2.25 percent. The tourism sector—the mainstay of the Aruban economy—is envisaged to grow, albeit at a slower rate. Moreover, domestic demand is slated to recover notably amid subsiding policy uncertainty and as key public-private partnership projects move forward.