that demands an economic adjustment on a large scale.
Fund program and additional support
The three main elements of the program are well described in the documents. The immediate priority is to restore stability in the foreign exchange market and bring about a gradual appreciation of the currency from its current level, which is exceptionally low in a historical context. The second element is a medium-term fiscalconsolidationpolicy following the initial year of dramatic adjustment. The third element is the restoration of a properly functioning financial
Despite a more favorable external environment, marked by the rebound in global growth, fast-increasing oil prices, and unprecedented Fund financial support, CEMAC is ending 2021 in a fragile external position. Net external reserves fell throughout 2021 to reach their lowest level in decades, and gross reserves are just above three months of imports of goods and services. The launch of a second phase of the regional strategy at the August 2021 CEMAC Heads of States summit saw renewed commitments to accelerate structural, transparency, and governance reforms. The resumption of program engagements with the Fund, combined with high oil prices and significant fiscal adjustments in 2022, should allow for a turnaround, and the build-up in external reserves is expected to resume in 2022. Risks include possible adverse pandemic developments, oil price volatility, possible fiscal slippages, shortfall in external financing, and security issues.
International Monetary Fund. Asia and Pacific Dept
. Economic growth, however, has slightly moderated to 7.8 percent in FY 2014, from 8.0 percent in 2013 and 7.9 percent in 2012 on the account of weakening mining sector due mainly to moratorium of new mining projects coupled with declining global metal prices. Fiscalconsolidationpolicies, together with tightening credit expansion, have played important roles to moderate growth in 2014.
4. The economic growth in 2015 is projected at 7.5 percent on the account of increasing industrial and service sector by 9.0 percent and agriculture by 3.0 percent, closed to the staff
below the target of 8 percent. This better-than-forecasted performance has been achieved due to the rigid implementation of the June 2009 supplementary budget.
The Latvian authorities have adhered to the fiscalconsolidationpolicy when drafting and adopting the 2010 budget. New fiscal consolidation measures adopted with the 2010 budget amount to more than LVL 500 million (around EUR 700 million or 4.2 percent of GDP), which is fully in line with the government’s initial commitments. As a result, the authorities estimate that the agreed consolidation would be