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International Monetary Fund. Research Dept.

Abstract

Following a series of adverse shocks in the first half of 2003, there are now increasing signs of a renewed recovery, and the balance of risks—in April, tilted well to the downside—has improved significantly. But with the pace and robustness of the recovery still unclear, and inflationary pressures low, monetary policies should remain accommodative for the time being; fiscal policies increasingly need to focus on medium-term consolidation, especially given coming demographic pressures. The widening global imbalances, and continuing dependence of global growth on the United States, underscore the need for an acceleration of structural reforms in many countries, along with measures to rein in the U.S. budget deficit over the medium term and, in some cases, a gradual move to greater exchange rate flexibility.

International Monetary Fund. Research Dept.

Abstract

This chapter consists of essays on growth in the Middle East and North Africa, reserve accumulation in Asia, and the impact of industrial country exchange rate volatility on developing countries. The first essay examines the causes of the low economic growth in the countries in the Middle East and North Africa (MENA) region over the past two decades. The essay shows that the region’s poor growth reflects mainly declining or low growth rates in oil-exporting countries. By contrast, growth in non-oil-exporting countries generally matched that of other developing countries (excluding east Asia), although it was not high enough to create enough new jobs to absorb the rapid expansion of the labor force, resulting in increased unemployment. Using an empirical model, the essay finds that the factors behind the region’s weak performance differ across subgroups of countries. Key findings are that, for the members of the Cooperation Council of the Arab States of the Gulf (GCC),1 high oil revenues that financed excessive government expenditures lowered growth, and that improvements in institutional quality would provide substantial gains for other countries in the MENA region.

International Monetary Fund. Research Dept.

Abstract

The potential risks associated with high public debt have long been a concern of economic policymakers around the globe. In the industrial countries, the need to strengthen fiscal positions and reduce public debt to accommodate the pressures that population aging will put on government budgets in the future has received considerable attention in recent years (see, for example, the May 2001 World Economic Outlook; Economic Policy Committee, 2001; and Turner and others, 1998). For emerging market economies, high public debt has often had more immediate consequences for economic performance, with debt crises—and the resulting painful periods of economic adjustment—having been a recurring feature of the histories of many of these countries.

International Monetary Fund

The Mauritian economy showed strong performance owing to its sound macroeconomic policies. Executive Directors emphasized the need to remain competitive and address the growing unemployment problem. They commended the efforts to support the developments in financial services, free port activities, and information and communications technology. They appreciated the tightening of the monetary policy and stressed the need to strengthen the financial position and ensure fiscal sustainability. They welcomed the assessment of the effectiveness and efficiency of the IMF, which provided technical assistance to Mauritius.

International Monetary Fund. Middle East and Central Asia Dept.

This paper discusses Iraq's First and Second Reviews of the Staff-Monitored Program (SMP) and Request for a Three-Year Stand-By Arrangement. The oil price decline has resulted in a massive reduction in Iraq's budget revenue, pushing the fiscal deficit to an unsustainable level. The authorities are responding to the crisis with a mix of necessary fiscal adjustment and financing, maintaining their commitment to the exchange rate peg. The authorities started an SMP in November 2015 to establish a track record of policy credibility and pave the way to a possible IMF financing arrangement. Their performance under the SMP has been broadly satisfactory.

International Monetary Fund. Middle East and Central Asia Dept.

Iraq is facing a double shock arising from the ISIS insurgency and the sharp drop in global oil prices. The conflict is hurting the non-oil economy through destruction of infrastructure and assets, disruptions in trade, and deterioration of investor confidence. The impact of the oil price decline—already felt in 2014—will fully unfold in 2015, affecting the budget, the external sector, and medium-term growth potential. The authorities are responding to the crisis through mix of fiscal adjustment and financing, maintaining their commitment to the exchange rate peg. Rapid Financing Instrument: To help address the present and urgent balance of payment and budget needs triggered by the ISIS insurgency and the collapse in oil prices, the authorities have requested financial assistance under the Rapid Financing Instrument (RFI) for 50 percent of quota (SDR 594.2 million).Outlook and Risks: Assuming a resolution of the conflict in the coming years, the baseline medium-term outlook still looks positive, even though it would be significantly less favorable than at the time of the 2013 Article IV report. Under much improved security conditions, the macroeconomic scenario would continue to be driven by the expansion in oil production and non-oil sector growth, assuming the implementation of structural reform to diversify the economy and support private sector development. But risks remain very high, arising primarily from a worsening of the conflict, political tensions, and poor policy implementation.

International Monetary Fund. Middle East and Central Asia Dept.

2017 Article IV Consultation and Second Review under the Three-Year Stand-by Arrangement-and Requests for Waivers of Nonobservance and Applicability of Performance Criteria, and Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Iraq

International Monetary Fund. Middle East and Central Asia Dept.

2020 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Iraq

International Monetary Fund. African Dept.
This 2016 Article IV Consultation highlights that economic growth in the Central African Republic has remained anemic since 2013 owing to structural rigidities, poor infrastructure, and limited energy supply. Inflation reached 11.6 percent in 2014 and receded to 4.5 percent in 2015 thanks to improved supply conditions and a fall in the prices of basic imports. Corrective measures implemented in 2015 allowed revenue to reach 7.1 percent. IMF Executive Directors have commended the authorities for the progress achieved under their economic program supported by the Rapid Credit Facility, which has helped stabilize the economy, rebuild core administrative capacity, and improve the management of public resources.
International Monetary Fund. Middle East and Central Asia Dept.
This paper discusses Jordan’s Sixth Review Under the Stand-By Arrangement, Request for Waivers of Applicability of Performance Criteria (PC), and Rephasing of Access. PC Program performance remains broadly on course. All end-March 2015 PCs are expected to be met. Structural performance saw improvement, including the pre-approval of a credit bureau and the establishment of a new public investment framework. There is an urgent need for broad-based policy actions in the labor market to put the unemployed into jobs, increase female labor force participation, and reform public-sector compensation and hiring practices. The IMF staff supports the completion of the sixth review and the related purchase.