This 2019 Article IV Consultation with Ghana highlights discussions focused on strengthening institutions and policies to preserve macroeconomic stability and promote inclusive growth, building on the authorities’ “Ghana beyond Aid” strategy. The government headline deficit is projected to reach 4.7 percent of gross domestic product in 2019, driven by lower-than-expected revenues, spending on flagship programs, and unexpected security outlays due to emerging security challenges in the region. Medium-term prospects are favorable, with robust growth driven mostly by the extractive sector. Election-related spending pressures in 2020 constitute the main risk to the baseline scenario. Fiscal risks in the financial and energy sectors could also impact the government deficit. Government borrowing needs are exposed to rollover risk that should be carefully managed as financing conditions could tighten. The commitment to the new fiscal rules is expected to help maintain fiscal discipline, as reflected in the unchanged policy baseline. A more ambitious fiscal stance is called for to reduce macroeconomic risks, accelerate debt reduction, and strengthen the external balance.
The labor market has continued to improve. In the first quarter of 2019, employment grew at 1.5 percent y-o-y as a result of higher permanent job creation, while temporary employment decreased for the first time in the post-crisis period. The unemployment rate decreased to 6.8 percent, down from 7.9 percent the year before. Both youth and long-term unemployment contributed to this reduction.
The general governmentheadlinedeficit decreased to 0.5 percent of GDP in 2018, a new record-low in Portugal’s modern democratic history! The
has slowed sharply as the economy is losing steam. Staff project the central government deficit at about 7 percent of GDP this year, including 1¼ percent of subsidy-related bond issuance. The general government deficit, which includes the states' deficit, is forecast to rise to nearly 10 percent of GDP. Public debt remains elevated at about 80 percent of GDP. On February 16, 2009, the government issued the 2009/10 interim budget, which targets a reduction in the central governmentheadlinedeficit of ½ percentage point of GDP.
Executive Board Assessment
around 6 percent over the medium term. International reserves remain stable, thanks in part to external borrowing.
The governmentheadlinedeficit is projected to reach 4.7 percent of GDP in 2019, driven by lower-than-expected revenues, spending on flagship programs, and unexpected security outlays due to emerging security challenges in the region. After including energy and financial sector costs, this corresponds to an overall deficit of 7 percent of GDP in 2019. Central government debt is expected to increase to 63 percent by the end of 2019, driven in part by
Pact, and agreed upon with the European institutions to strike the right balance between consolidating the fiscal accounts and supporting, to the extent possible, the recovery.
However, the headline deficit continued to decline and, at a targeted 2.3 percent this year, is at present one of the lowest among the G7(see chart below).
Source: WEO Database. For 2016 the figure for Italy shows the fiscal target.
Moreover, staff’s assessment of the magnitude of the fiscal easing this year, based on the change in the
Mr. Ales Bulir, Daniel Baksa, Mr. Juan S Corrales, Andres Gonzalez, Diego Rodriguez, and Dyna Heng
This technical note and manual (TNM) addresses the following issues: • Evaluating the full implications from the policies adopted to mitigate the impact of the COVID-19 pandemic on the economy requires a well-developed macroeconomic framework. This note illustrates how such frameworks were used to analyze Colombia and Cambodia's shock impact at the beginning of the pandemic. • The use of macroeconomic frameworks is not to infer general policy conclusions from abstract models or empirical analysis but to help policymakers think through and articulate coherent forecasts, scenarios, and policy responses. • The two country cases illustrate how to construct a baseline scenario consistent with a COVID-19 shock within structural macroeconomic models. The scenario is built gradually to incorporate the available information, the pandemic's full effects, and the policy responses. • The results demonstrate the value of combining close attention to the data, near-term forecasting, and model-based analyses to support coherent policies.
-term values for the main macroeconomic variables based on historical data (ratios to GDP of private consumption and investment, the trade balance, and the current account balance) and long-term assumptions (GDP growth rate, inflation, and the monetary policy rate). To calibrate fiscal policy variables, we considered the government's headlinedeficit target of 1% of GDP, consistent with the structural fiscal balance-based rule, and historical data for public revenue and spending. The long-term public debt-to-GDP ratio is consistent with the long-term deficit-to-GDP ratio
reforms, and changes to the pension system, as well as restraint of current expenditure ( Box 2 ). With these policies, the authorities achieved a sizable reduction of the fiscal deficit in 2011, while they remain committed to meeting the general governmentheadlinedeficit target of below 3 percent of GDP in 2013, as agreed with the European Commission (EC) in the context of the Excessive Deficit Procedure (EDP). As an intermediate step towards this goal, the authorities intend to reduce the headline deficit to 3.5 percent in 2012.
10. However, the economic outlook
International Monetary Fund. Western Hemisphere Dept.
, Colombia, Peru and Mexico.
2/ Data for 2015 refers to December 2015.
3/ Consumer and commercial credit gaps are computed as percentage-point deviations from an HP-filtered consumer-credit-to-private-consumption ratio and commercial-to-private-investment ratio, respectively.
4/ Commercial credit valued at end-June 2014 exchange rate.
6. Fiscal policy tightened as prescribed by the fiscal rule . The central governmentheadlinedeficit widened to 4 percent of GDP as oil revenue declined (by about 0.9 pp) and interest expenses increased (0.3 pp). Nevertheless, the
International Monetary Fund. Western Hemisphere Dept.
This 2017 Article IV Consultation highlights Colombia’s favorable outlook, underpinned by the peace agreement, structural tax reform, and the authorities’ infrastructure agenda. Economic activity will rebound slightly in 2017 as investment strengthens, boosted by reduced corporate taxation and confidence stemming from the peace agreement. Nontraditional exports are gaining steam thanks in part to ongoing efforts to reduce trade barriers, and this will help bring the current account deficit to its equilibrium level. Medium-term growth will be driven by economic diversification away from oil, which will benefit from the infrastructure agenda, and the peace agreement, which will improve competitiveness and regional development.