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International Monetary Fund. External Relations Dept.

The Web edition of the IMF Survey is updated several times a week, and contains a wealth of articles about topical policy and economic issues in the news. Access the latest IMF research, read interviews, and listen to podcasts given by top IMF economists on important issues in the global economy. www.imf.org/external/pubs/ft/survey/so/home.aspx

Mr. Jan Kees Martijn, Gabriel Di Bella, Mr. Shamsuddin Tareq, Mr. Benedict J. Clements, and Mr. Abebe Aemro Selassie

Abstract

Macroeconomic outcomes in low-income countries (LICs) have improved markedly in recent years, but important questions remain regarding possible adjustments in the design of IMF-supported programs in such countries. This paper draws on a review of the literature as well as the experience of 15 LICs that have attained some degree of macroeconomic stability to discuss, for example, the appropriate target range for inflation in shock-prone LICs; whether countries should use fiscal space to cut excessive tax burdens, reduce high debt levels, or raise public spending; and how the effectiveness of public expenditures can be improved.

International Monetary Fund. African Dept.

Abstract

Sub-Saharan Africa is contending with an unprecedented health and economic crisis—one that, in just a few months, has jeopardized years of hard-won development gains and upended the lives and livelihoods of millions.

International Monetary Fund. Middle East and Central Asia Dept.

Faced with scarcity of resources, Djibouti has pursued a strategy of developing infrastructure to exploit its strategic geographic location so as to foster rapid growth, reduce poverty and create much-needed jobs. Djibouti has had to resort to non-concessional financing, which has raised its external debt. Reform is crucial to generate the revenues needed to return to a sustainable external debt and fiscal path, achieve higher growth, and reduce widespread poverty and unemployment.

International Monetary Fund. Middle East and Central Asia Dept.

Djibouti is expanding its infrastructure to leverage its strategic location and foster growth, reduce poverty, and create jobs. The remarkable investments in ports and railways-started in 2015 and mostly debt-financed by financial institutions from China-presents opportunities as well as risks. With public debt rising from 50 to 85 percent of GDP in just two years, the authorities need to advance rapidly with critical reforms. Such reforms would aim at translating the investment boom into strong, inclusive, and job-creating growth to reduce poverty and return to a sustainable debt trajectory given the current high risk of debt distress. While there is strong ownership of such reforms under the authorities' Vision Djibouti 2035, close government coordination will be needed to ensure their effective implementation.

International Monetary Fund. Middle East and Central Asia Dept.

2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Djibouti

International Monetary Fund. External Relations Dept.

Unsustainability of domestic debt may be as big a threat to sub-Saharan Africa as unsustainability of foreign debt, according to research based on new data. Although domestic debt in most sub-Saharan countries is much smaller than external debt, interest rates are often higher, and the debt must be rolled over frequently—on average four times a year—adding further to the cost of servicing. This means that some countries spend as much money servicing their domestic debt as they do servicing their external debt. Camilla Andersen of the IMF Survey spoke to Jakob Christensen, an Economist in the African Department, about his new Working Paper, “Domestic Debt Markets in Sub-Saharan Africa.”

International Monetary Fund

This paper examines Ethiopia’s 2004 Article IV Consultation and Sixth Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility (PRGF). The PRGF program remains on track. All the quantitative performance criteria under the PRGF for end-March 2004, the structural performance criteria for end-June 2004, as well as all the benchmarks for these test dates have been met. In particular, the implementation of the Commercial Bank of Ethiopia (CBE) restructuring plan has progressed as planned. The 2004/05 federal budget requires substantial domestic financing as spending initiatives outpace revenue growth.

International Monetary Fund

Ethiopia’s request for disbursement under the rapid-access component of the Exogenous Shocks Facility is examined. The authorities have embarked upon a tightening of monetary and fiscal policies to facilitate necessary rebuilding of foreign exchange reserves. Wheat has been imported on an emergency basis to dampen domestic inflation expectations and alleviate the impact of high food prices on vulnerable groups. Steep increases in international prices for key imports have exacerbated strains on the Ethiopian economy and pushed foreign exchange reserves to critically low levels.