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International Monetary Fund. Western Hemisphere Dept.
While Panama has been the most dynamic economy in Latin America over the last three decades (growing 6 percent on average), its strength is being tested by the COVID-19 global pandemic. Panama is a service-based economy that is highly integrated in the world economy and exposed to extreme shocks during the pandemic.
International Monetary Fund
The global economy is embarking on a lengthy path to recovery with modest growth expected for 2021, after a severe contraction this year. The global forecast is subject to unusually large risks. Emerging markets and developing economies face an uphill battle. Low-income developing countries are in an especially vulnerable position and risk a persistent and significant deterioration in development prospects. Controlling the pandemic and cushioning the impact on the economy are key. LIDCs should adopt targeted containment measures and strictly prioritize spending and refrain from policies that could create long term damage. Multilateral cooperation and extensive support from the international community are indispensable. The IMF has helped EMDEs through emergency lending and debt service relief. Targeted surveillance and capacity development will tackle new policy challenges and react nimbly to the needs of the membership including fragile and small states.
International Monetary Fund
The temporary increase in access limits under IMF emergency financing instruments will expire on October 5, 2020, unless extended. Access limits under emergency instruments (the Rapid Credit Facility (RCF) and Rapid Financing Instrument (RFI)) were increased in April 2020 for a period of six months, from 50 to 100 percent of quota annually and from 100 to 150 percent of quota cumulatively. The increased limits are subject to review and can be extended before their expiration. It is proposed to extend the period of higher access limits for emergency financing for a period of six months, through April 6, 2021. Against a background of continued pandemic-related disruption, staff expects there could be significant demand for emergency lending in the October 2020–April 2021 period, including from countries with pending requests and from countries that received emergency support at levels less than the maximum amounts available. A six-month extension would give more time for countries to benefit from higher access limits under emergency financing.
International Monetary Fund
The COVID-19 pandemic has caused a uniquely severe synchronized shock across the global economy, in turn leading numerous member countries to request substantial financial assistance from the Fund. The Executive Board responded to members’ needs by increasing the access limits under the Fund’s emergency financing instruments by 50 percent of quota for a period of 6 months (until October 5, 2020), subject to a possible extension by the Executive Board.
International Monetary Fund. Western Hemisphere Dept.
This chapter presents Ecuador’s Request for Purchase Under the Rapid Financing Instrument (RFI) and Cancellation of Arrangement Under the Extended Fund Facility (EFF). Ecuador is facing urgent and immediate balance of payment (BOP) needs driven by the sharp propagation of the coronavirus disease 2019 outbreak—Ecuador is one of the hardest hit countries in Latin America—a plummeting of oil prices, and a dramatic collapse of global demand. In the near term, the authorities have taken significant measures to contain the spread of the virus and mitigate the socio-economic impact. Containment measures include the closing of schools and universities, public spaces and noncritical commercial activities, halting public transport, and imposing a nationwide curfew. Additional support from other external partners will be required and critical to close the remaining financing gap and ease budget constraints. The RFI will help Ecuador finance the much-needed health and social assistance spending and catalyze financing from other multilateral financial institutions.
International Monetary Fund. Western Hemisphere Dept.
A 36-month EFF with access of SDR 3.035 billion (435 percent of quota or about US$4.204 billion) was approved on March 11, 2019. Economic activity is projected to decelerate further in 2019 as fiscal consolidation and a slowdown in credit growth weigh on economic growth. However, external financing conditions have improved on the back of rising oil prices and the approval of the IMF program, with sovereign bond spreads falling by 250 basis points since January 1, 2019.
International Monetary Fund. Strategy, Policy, &, Review Department, and International Monetary Fund. Western Hemisphere Dept.
The Methodology review identified three broad areas for improving the EBA-Lite methodology: (1) expanding the fundamentals and policy determinants in the CA and REER regressions to better capture the external balance of EBA-Lite countries; (2) identifying alternatives to regression models for external assessments of large exporters of exhaustible commodities; and (3) a revised approach for the assessment of external sustainability in highly indebted economies. Accordingly, the revised methodology consists of three modules: 1) Regression Module 2) Module for External Assessments of Exporters of Exhaustible Commodities 3) Module for the Assessment of External Sustainability
International Monetary Fund. Western Hemisphere Dept.
This Selected Issues paper examines the export growth in Colombia. Colombian exports are heavily concentrated in commodities but the large real depreciation since 2015 offers an opportunity to grow nontraditional exports substantially. Colombia’s comparative advantage in noncommodity products was weak in 2013-15, and export diversification was low, partly owing to the commodity price boom. Exports grew moderately in recent years but in line with historical relationships given fundamentals. The export outlook is positive. Given global growth assumptions, the IMF staff’s models predict acceleration in export growth. The historical experience of commodity exporters suffers large real depreciations also paints a positive picture.