International Monetary Fund. Asia and Pacific Dept
could normalize faster than elsewhere. Scarring is likely, however, as labor market participation has fallen, and output is expected to remain below pre-pandemic trends over the medium term, with the most vulnerable in society likely to be hit the hardest.
The forecasts remain highly uncertain, with significant downside risks. A resurgenceofthepandemic cannot be ruled out. Geopolitical tensions—particularly US-China—may also derail the recovery. A rise in social unrest triggered by the pandemic’s disproportionate impact on the poorest and most vulnerable could
half of 2021. In April 2020, Nigeria received IMF emergency financial assistance of $3.5 billion under the Rapid Financing Instrument to help cushion the impact of the pandemic.
Socio-economic conditions have deteriorated, with rising food inflation, elevated youth unemployment, mass protests in October 2020, and surveys show worsening food insecurity with a significant impact on the vulnerable.
Risks are tilted to the downside and include the resurgenceofthepandemic, security situation and unfavorable external environment. Capital outflow risks arise from the
legislative reforms to strengthen public financial management, public procurement, and the governance and financial performance of the state-owned enterprises (SOEs).
Challenges remain . Fiscal risks stem principally from a potential resurgenceofthepandemic and structural weaknesses in the SOEs reflecting their unclear mandate and the legacy of executive interference. Heightened budgetary pressures in the run-up to the 2021 presidential election will test the authorities’ commitment to macroeconomic discipline, while political tensions related to the promulgation of a
International Monetary Fund. Western Hemisphere Dept.
gradually decline over time, worsening reserve adequacy and threatening the sustainability of the currency peg. Belize’s economic outlook is subject to substantial downside risks, including from a resurgenceofthepandemic and natural disasters.
Executive Board Assessment 2
Executive Directors noted that the pandemic has hit Belize hard, resulting in a high number of deaths and a deep economic recession. The recovery is projected to be protracted and subject to large risks. Directors noted that the country faces difficult challenges, including unsustainable public
investments, real GDP growth is expected to reach 4¼ percent in 2021 and 5½ percent in 2022, and gradually moderate to around 4 percent over the medium term, in line with staff’s estimates of the potential growth rate in Seychelles. This will lead to a rebound in fiscal revenue and help improve the fiscal position over the medium term. A more protracted normalization of the global economy or resurgenceofthepandemic would delay the economic recovery or further deepen the slump.
4. Performance under the program had been strong until the onset of the
COVID-19 has had a severe economic impact on Seychelles through the implementation of strict domestic measures to contain the spread of the virus and the related global spillovers. The authorities have responded with measures to mitigate the economic fallout on businesses and households. To help address the urgent balance of payments need arising from the pandemic, the Executive Board approved on May 8, 2020 the authorities’ request for emergency financing under the Rapid Financing Instrument (RFI) of SDR 22.9 million, equivalent to 100 percent of quota (IMF Country Report No. 20/170).
International Monetary Fund. Strategy, Policy, and & Review Department
of the peace agreement. In a downside scenario, driven by political instability, oil production would be substantially weaker, putting pressure on external and fiscal balances, and authorities would resort to central bank financing of the deficit, leading to severe depreciation and high inflation. Upside scenarios modelled a stronger recovery path for the oil sector given its importance for the South Sudanese economy.
The 2021 Nigeria Article IV mission—simulating the impact of a resurgenceofthepandemic. Scenarios to demonstrate the impact on a resurgence of
external debt distress and overall high risk of debt
distress. The solvency indicators have deteriorated relative to the previous DSAs. C.A.R.’s
capacity to service debt is severly constrained by its low revenue mobilization and weak export
base, with the external debt service-to-export and external debt service-to-revenue ratios
breaching their respective thresholds under the baseline scenario.
15. A number of other considerations support the high-risk assessment. Macroeconomic
projections are highly uncertain, as a resurgenceofthepandemic cannot be excluded
International Monetary Fund. Strategy, Policy, &, Review Department, International Monetary Fund. Finance Dept., and International Monetary Fund. Legal Dept.
that meets UCT-quality conditionality standards is either not feasible or not necessary. Such situations could occur, for example, in the wake of large natural disasters, in post-conflict societies, or where there is a destabilizing resurgenceofthepandemic. But EF should not be used as a backdoor to Fund resources without UCT-quality policies when a UCT arrangement can be put in place. It is therefore proposed that the staff report accompanying any request for EF would include an explicit discussion of as to how qualification criteria are met, making a convincing
International Monetary Fund. Middle East and Central Asia Dept.
. Considerable uncertainty surrounds the evolution of the coronavirus pandemic as well as the oil market outlook. Weaker-than-expected global growth due to the resurgenceofthepandemic or other factors could weaken oil demand and either drive oil prices lower or require additional actions from OPEC+. Changes in global risk appetite could limit external borrowing for some governments and the private sector, notably Bahrain and Oman. Geopolitical developments could ultimately weigh on investor and consumer confidence, investment and growth. Delays in implementing necessary