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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.
International Monetary Fund. Middle East and Central Asia Dept.
This paper discusses Pakistan’s Eighth Review Under the Extended Arrangement and Request for Waivers of Nonobservance of Performance Criteria (PC). Two end-June 2015 quantitative PCs and three indicative targets were missed, but deviations were either minor or temporary and corrective actions have been taken as needed. The authorities remain on track to meet the end-September 2015 program targets. Although the program’s monetary PCs were met, the PCs on the fiscal deficit and government borrowing from the central bank were missed. The end-September structural benchmark (SB) to improve the central bank’s interest corridor and the end-November SB to enact the Credit Bureau Bill were met ahead of time.
International Monetary Fund
This 2007 Article IV Consultation highlights that boom in private consumption in Iceland was facilitated by easing household credit conditions, tax cuts, rapidly rising housing and equity wealth, and an appreciating real exchange rate. As a result, the output gap peaked at over 5 percent in 2005, declining only modestly in 2006. Record current account deficits and credit downgrades early in 2007 caused little market disruption, in part reflecting a healthy financial sector. The exchange rate remained strong, and confidence in Icelandic banks stayed high.
International Monetary Fund
The Burundian economy is recovering but at a slower pace than previously expected, while inflation is expected to rise considerably. The macroeconomic outlook has been adversely affected by the surge in global food and fuel prices. Policies focused on the appropriate policy response to the food and fuel price shock, with a view to consolidating economic stability and further reducing poverty are required. Executive Directors urge the government to anchor medium-term fiscal policy to debt sustainability. Sustained growth depends on accelerating structural reforms.
International Monetary Fund. Western Hemisphere Dept.
This paper discusses Mexico’s Review under the Flexible Credit Line. Mexico’s very strong policies and policy frameworks have helped it navigate successfully a complex external environment characterized by the heightened risk of protectionism and financial market volatility. Inflation is above the central bank’s target, reflecting mainly the transitory effects of the liberalization of domestic fuel prices and the pass-through from the currency depreciation. Although the global environment and financial stability have improved somewhat recently, downside risks affecting Mexico remain elevated amid continued uncertainty about the outcome of the discussions with the United States on trade, as well as a possible renewed surge in capital flow volatility.
International Monetary Fund. Western Hemisphere Dept.
This paper focuses on recent economic developments as well as the role of the flexible credit line (FCL) arrangement. Despite a large external shock, Colombia’s economy showed remarkable resilience in 2015. The current account deficit reached a record level in 2015, but reserves remained stable. The banking system and corporate sector remained in good financial health. Growth will be subdued in the near future but is projected to gradually return toward potential. The FCL has served Colombia well. The previous FCL arrangements have been instrumental to cope with heightened external risks in recent years, complementing the authorities’ policy response to economic shocks.