Non-fuel primary commodity prices fell in the second half of 1989, breaking the upward trend that had prevailed in the preceding two years. The decline in the Fund’s index of non-fuel commodity prices from the first half of 1989 to the second half of the year was 7 percent in terms of SDRs and 8 percent in terms of U.S. dollars.1 By contrast, petroleum prices increased during 1989, reversing the downward trend of the previous two years. The Fund’s indicative petroleum price—an average of prices for U.K. Brent light crude, Dubai medium crude, and Alaska north slope heavy crude—rose on a year-to-year basis by 38 percent in SDR terms and 33 percent in terms of dollars during the second half of 1989.
Prices of food commodities, which began to recover in 1987, peaked during the first half of 1989. Since then food prices have weakened and are expected to weaken further in 1990. The aggregate index of food prices, after increasing by 23 percent in 1988, averaged a modest 8 percent rise in 1989 (Table 5). As a result, the index stood at its highest level since 1984, just prior to the long downward trend that bottomed out in the first half of 1987.
In contrast to the overall index of non-fuel commodity prices, which rose by 4 percent, the index of beverage prices fell by nearly 13 percent in 1989 (Table 6). The decline, which was the third in as many years, is largely attributable to supply factors. Increased production of coffee and cocoa in lagged response to the high prices of the late 1970s was the main factor contributing to the increase in the overall supply of beverages. After the sharp increase by nearly 11 percent in 1987, which reflected to a considerable degree the recovery of Brazilian coffee production from the severe 1985 drought, the index of world supply of beverages rose by a further 5 percent in 1988 and by 3 percent in 1989. World consumption of beverages is estimated to have increased by 2 percent per annum during these three years. As a result of the widening disparity between world supplies and consumption, the overall level of world stocks of beverages has increased during this period; the index of closing stocks rose by 37 percent in 1987, by over 8 percent in 1988, and by more than 5 percent in 1989.
In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.
This paper examines Côte d’Ivoire’s debt sustainability analysis undertaken in connection with the Enhanced Initiative for Heavily Indebted Poor Countries. The crisis years led to a substantial increase in poverty and deterioration in living standards. The March 2007 Ouagadougou Political Accord provides a roadmap for reunification, national reconciliation, demobilization, and elections. Significant revenue efforts and overall expenditure restraint have resulted in a modest space for social and crisis-exit spending. To eliminate extrabudgetary spending in the future and enhance transparency, the authorities have established a range of safeguards.
International Monetary Fund. External Relations Dept.
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After a rapid recovery in 1987, the overall price index for agricultural raw materials fluctuated around a fairly flat trend in 1988 and 1989 (Table 7 and Chart 6), indicating a movement toward broad balance in the markets for these commodities. World consumption of agricultural raw materials, which grew at an average annual rate of 5 percent in the years 1985–86, rose by an average 2 percent a year thereafter, while the index of production decelerated from 3 percent in 1988 to 1 percent in 1989. The overall price index for agricultural raw materials is expected to register virtually no change in 1990. This forecast is premised on continued moderate growth in world consumption of these commodities, the absence of significant supply disruptions, and the continued long-term impact of productivity increases and the development of synthetic substitutes.
Following two successive years of strong growth, the overall index of prices for metals and minerals in 1989 rose by 7 percent (Table 8). Increases in annual average prices were recorded for all of the commodities in this index except aluminum (Appendix Table 10). The higher annual averages, however, obscure the general downward trend over the course of the year (Chart 7). During the first quarter of 1989, the index increased by 9 percent over the final quarter of 1988, to a record high, mainly on the strength of advances in prices for nickel (by 31 percent) and zinc (23 percent). Prices began to slide in the second quarter, however, and the index fell by about 18 percent between the first and the final quarter of the year. The downward trend in 1989 would have been more pronounced had it not been for a temporary surge in the price of tin in the second quarter and sustained price increases for iron ore and lead, which continued through the first quarter of 1990.