Journal Issue

Press Releases

International Monetary Fund. External Relations Dept.
Published Date:
January 1999
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St. Kitts and Nevis: Emergency Assistance

The IMF approved St. Kitts and Nevis’s request for emergency financial assistance related to natural disasters. The assistance, equivalent to SDR 1.625 million (about $2.3 million), will support the government’s economic recovery program and associated relief and rehabilitation efforts in the aftermath of Hurricane Georges.

The devastation caused by Hurricane Georges reflects damage to all major infrastructure services and tourism facilities, including several major hotels. About one-fourth of the nation’s sugarcane crop may also have been destroyed, according to preliminary estimates. Current estimates by the authorities indicate hurricane damage overall amounted to about $400 million, or 150 percent of GDP in 1997. Real GDP growth is projected to slow to about 3.5 percent in 1998 and decelerate further to 2 percent in 1999, compared with recent pre-hurricane growth, which averaged about 5 percent a year.

St. Kitts and Nevis joined the IMF on August 15,1984, and its quota is SDR 6.5 million (about $9.2 million).

Press Release No. 98/62, December 17

Malawi: ESAF

The IMF approved the third annual arrangement for Malawi under the Enhanced Structural Adjustment Facility (ESAF), providing assistance equivalent to SDR 20.4 million (about $27 million) in support of the government’s program for 1998-99. The third annual loan, which has been augmented by SDR 5.15 million (about $7 million), is available in two equal semiannual installments, the first of which is available on December 30,1998.

Medium-Term Strategy and 1998-99 Program

The government’s medium-term development strategy aims to consolidate macroeconomic stability, attain sustainable economic growth that will reduce poverty, and raise the overall living standards of Malawi’s population. The macroeconomic objectives for the medium term are to increase the rate of real GDP growth from about 3.5 percent in 1998 to 6 percent in 2001; reduce the average annual rate of inflation from about 27 percent in 1998 to about 5 percent in 2001; and strengthen further the balance of payments. For 1998-99, the principal macroeconomic objectives are to achieve average real GDP growth of at least 3.6 percent in 1998 and 5 percent in 1999; a 12-month inflation rate of 36 percent by end - 1998 and 7 percent by end 1999; a small domestic primary deficit for 1998-99; and a recovery in gross international reserves to more than four months of imports. The monetary program for 1998-99 is aimed at lowering the inflation rate substantially and restoring conditions conducive to the maintenance of a stable exchange rate.

Malawi: Selected Economic and Financial Indicators
(annual percent change)
GDP at constant market prices10.
Consumer prices (end of period)6.715.
(percent of GDP)
Domestic primary balance (commitment basis) 40.8-4.5-0.1-1.2-1.2-1.1
Overall balance (excluding grants,(commitment basis)-7.7-11.6-14.8-12.9-12.1-11.4
External current account (including official transfers)-7.7-9.3-8.9-8.8-8.1-6.8
External debt95.090.4140.7166.5162.5154.2
(months of imports of goods and nonfactor services)
Gross official reserves3.

Structural Reforms

The government’s agenda of structural reforms is designed to support the goal of pursuing widespread poverty reduction and an improvement in living standards. The authorities are also continuing with the privatization program.

Social Issues

The government’s medium-term development strategy since 1994 has been to achieve accelerated economic growth, lower inequality, and generate a broad-based improvement in living standards. Malawi is a poor country; nominal per capita GNP in 1997 was only $220—less than half the sub-Saharan average; and income inequality is perhaps the highest in Africa. In the education sector, the government introduced universal free primary education in 1994 and is now directing its efforts toward improving the quality of education.

Malawi joined the IMF on July 19, 1965. Its quota is SDR 50.9 million (about $72 million). Malawi’s outstanding use of IMF financing currently totals SDR 59.8 million (about $84 million).

Press Release No. 98/63, December 18

Armenia: ESAF

The IMF has approved the third annual loan for Armenia under the Enhanced Structural Adjustment Facility (ESAF), which has been increased by SDR 8.1 million (about $11 million) to SDR 41.85 million (about $59 million), in support of the government’s program for 1999. The loan is available in two equal semiannual installments of SDR 20.925 million (about $29 million), the first of which is available at the end of December. The total commitment under the three-year loan is thus increased to the equivalent of SDR 109.35 million (about $154 million).

Program for 1999

The key objectives of Armenia’s development strategy are to address the spillover effects of the Russian crisis while trying to move forward in consolidating the gains achieved so far in stabilization and deepening structural reform. The authorities intend to take measures that would help Armenia absorb at least half of the external shock. The balance would be met through a concerted international donor effort to assist Armenia, as well as neighboring ESAF transition countries, to address the balance of payments difficulties resulting from the Russian crisis. It is anticipated that the stead fast implementation of these measures would provide the conditions to maintain real annual GDP growth of at least 5.5 percent in 1998 and 4.0 percent in 1999, in spite of the unfavorable external environment. End-period inflation is targeted at single digits in both 1998 and 1999, and the current account deficit is targeted to decline from a projected 24 percent of GDP in 1998 to about 22 percent in 1999. To achieve these macroeconomic objectives, the program calls for maintaining a tight fiscal policy stance, with a state government budget deficit of about 5.5 percent of GDP in 1998 and about 6 percent in 1999. On the monetary side, tight monetary and credit policies will continue to be implemented.

Structural Reforms

The government will deepen reforms in the areas of privatization and banking. The Central Bank of Armenia will seek to bolster the soundness of the commercial banks by introducing stricter prudential regulations and by strengthening supervision. The government is also committed to implementing the revised strategy to rehabilitate the energy sector. Armenia assigns high priority to raising productivity in the civil service and to increasing the real wages of public servants. Such efforts will be framed in the context of a comprehensive strategy.

Armenia: Basic Economic Indicators
(annual percent change)
Real GDP growth (percent change)
Inflation (end of period)5.821.93.89.9
(percent of GDP)
State budget balance4-9.3-5.9-5.6-6.1
Current account balance-27.9-27.8-23.7-21.8
Total external debt38.048.343.044.1
(months of imports of goods and nonfactor services)
Gross official international reserves2.
Data: Armenian authorities and IMF staff estimates

Social Issues

The authorities are conscious that the process of transition may have some adverse consequences for the most vulnerable groups of the population; therefore, their program attaches particular importance to developing and implementing a well-targeted, means-based, and cost-effective social safety net, as well as reforming those sectors with the greatest social incidence, including education, health, and the pension system.

Armenia joined the IMF on May 28, 1992. Its quota is SDR 67.5 million (about $95 million). Its outstanding use of IMF resources currently totals SDR 114 million (about $161 million).

Press Release No. 98/65, December 22

Rwanda: Article VIII

The government of Rwanda has notified the IMF that it has accepted the obligations of Article VIII, Sections 2, 3, and 4, of the IMF Articles of Agreement, with effect from December 10,1998. IMF members accepting the obligations of Article VIII undertake to refrain from imposing restrictions on the making of payments and transfers for current international transactions or from engaging in discriminatory currency arrangements or multiple currency practices without IMF approval. A total of 147 countries have now assumed Article VIII status.

Rwanda joined the IMF on September 30, 1963. Its quota is SDR 59.5 million (about $84 million).

Press Release No. 99/1, January 4

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