Statement by the IMF Staff Representative on the Republic of Congo

The staff report for the Republic of Congo’s combined 2008 Article IV Consultation and Requests for a Three-Year Arrangement Under the Poverty Reduction and Growth Facility is discussed. To enhance external viability, the authorities recognize the need to improve competitiveness, raise output growth through diversification, and consolidate the fiscal position. The authorities are making a concerted effort to improve the business climate, liberalize trade, deepen financial intermediation, continue reform of public enterprises, improve governance and transparency, and put in place development strategies in key sectors.

Abstract

The staff report for the Republic of Congo’s combined 2008 Article IV Consultation and Requests for a Three-Year Arrangement Under the Poverty Reduction and Growth Facility is discussed. To enhance external viability, the authorities recognize the need to improve competitiveness, raise output growth through diversification, and consolidate the fiscal position. The authorities are making a concerted effort to improve the business climate, liberalize trade, deepen financial intermediation, continue reform of public enterprises, improve governance and transparency, and put in place development strategies in key sectors.

December 8,2008

1. The following information has become available since the staff report was issued. The information does not alter the thrust of the staff appraisal.

2. Sharply rising food prices pushed overall consumer price inflation (CPI) to 7.8 percent in the twelve months through October 2008. Food prices increased by 10.2 percent during this period, while non-food prices rose by 4 percent. Food items account for 60 percent of the CPI.

The increase in the CPI was higher than projected but the decline in global commodity and non-fuel commodity prices which began in the third quarter of this year should help to lower inflation through the end of 2008. In this regard, the staff estimates suggest that the authorities’ end-year inflation projection of 6 percent could still be reached.

Republic of Congo: 2008 Article IV Consultation, Requests for a Three-Year Arrangement Under the Poverty Reduction and Growth Facility and Interim Assistance Under the Enhanced Initiative for Heavily Indebted Poor Countries, and Financing Assurances Review: Staff Report; Staff Statement and Supplement; Public Information Notice and Press Release on the Executive Board Discussion; and Statement by the Executive Director for the Republic of Congo
Author: International Monetary Fund