This 2014 Article IV Consultation highlights that Lithuania’s economy has entered a broadly favorable trajectory of healthy and balanced growth, but income convergence with Western Europe has a long way to go. With inflation at historical lows and well-advanced repair of public finances damaged by the 2008/09 crisis, meeting the entry criteria seems on track. Financial stability has improved further in 2013, with the capital adequacy ratio exceeding 17 percent and steady progress in reducing nonperforming loans. The main challenge is now resuscitating the sluggish private sector credit growth, which could undermine investment and the recovery if it continued for much longer.
Western European levels and structural unemployment is uncomfortably high.
Lithuania targets to adopt the euro next year to further deepen integration with Western Europe. With inflation at historical lows and well-advanced repair of public finances damaged by the 2008/09 crisis, meeting the entry criteria seems on track. The Economic and Financial Affairs Council of the European Union will take a final decision about EMU membership this July, based on convergence reports by the European Commission and the European Central Bank.
A determined multi-yearconsolidation
not only be important to maintain the sound macroeconomic and financial management of the past. Identifying priority structural reforms that promote growth and help realize the government’s income equality objective and then pushing ahead with their implementation is now key.
Public finances are vastly improved. A commendable multi-yearconsolidationeffort culminated in the first ever fiscal surplus last year. The public debt ratio declined from its peak in 2015 to some 40 percent. A package of social measures will push the fiscal balance into a deficit in 2017
context of large infrastructure projects. This current account deficit is largely financed by foreign direct investors and donors.
On the fiscal front, the authorities have pursed their multi-yearconsolidationefforts. As a result, the fiscal deficit for 2019 is expected to be reduced at 3.9 percent of GDP from 4.1 percent of GDP in 2018 and 6.1 percent of GDP in 2016. Increased domestic revenue mobilization added to budget support from donors coupled with efforts to reign in expenditure helped achieve this good performance.
IV. Outlook and Risks
This 2017 Article IV Consultation highlights that the economy of Lithuania has been gathering momentum, following sluggish performance in 2015 and most of 2016. Real GDP expanded by 3.9 percent in the first quarter of 2017 after rising by 2.3 percent in 2016. Strong private consumption, on the back of robust wage growth and low inflation that supported purchasing power, has long been a main driver of growth. Building on recent momentum, economic growth should be strong in 2017, rising to 3.2 percent. Improving external conditions and a turnaround in European funds absorption, as well as high capacity utilization, should spur exports and investment.
equality objective and then pushing ahead with their implementation is now key.
30. Public finances are vastly improved . A commendable multi-yearconsolidationeffort culminated in the first ever fiscal surplus last year. The public debt ratio declined from its peak in 2015 to some 40 percent. A package of social measures will push the fiscal balance into a deficit in 2017, but balance would still be achieved in structural terms. To avoid a sharp and unwarranted fiscal consolidation in subsequent years, Lithuania should revisit its fiscal rules, which are
Kenya has been hit hard by the COVID-19 pandemic. Despite a forceful policy response by the authorities, the socio-economic impact has been significant. The shock has also exacerbated the country’s pre-existing fiscal vulnerabilities, pushing Kenya into high risk of debt distress. While the economy is now recovering, fiscal and balance-of-payments financing needs remain sizable over the medium term.
16. The overarching objective of the fiscal strategy is to first stabilize and then reduce the public debt burden, as set out in the 2021 Budget Policy Statement . This will be achieved through a multi-yearconsolidationeffort that brings the primary deficit below its debt-stabilizing level by FY23/24 and keeps the debt-to-GDP ratio on a firmly declining trend thereafter (DSA, Table 2 ). A key pillar of the strategy is to bring the tax-to-GDP ratio back to levels achieved in recent years (from 12.9 percent of GDP in FY20/21 to 15.6 percent in FY23
This paper discusses Niger’s Fifth Review Under the Extended Credit Facility Arrangement and Request for Modification of Performance Criteria. Niger faces daunting development challenges, aggravated by terrorist incursions, climate change, and low uranium export prices. Presidential elections are due in late 2020. Reforms are advancing and economic activity is reasonably strong. Program implementation has been broadly satisfactory. All quantitative targets for end-June 2019 were met. However, a subsequent weakening of revenues, partly due to Nigeria’s closure of its borders to trade, as well as topped-up budget support, required mitigating policy measures and the adjustment of end-December 2019 targets. Structural reforms are advancing with delays. Niger can strengthen prospects for a successful transition by securing favorable contractual arrangements with foreign investors; establishing a framework for administering oil resources in line with good practices, notably channeling all revenues directly through the Treasury; and increasing spending on physical and human capital, while being mindful of the inherent volatility in natural resource revenues.
Specific offsets for FY21/22 extraordinary SOE support have been identified and will be proposed in the supplementary budget authorizing such support; offsets will also be required for subsequent years.
20. The authorities reiterated their commitment to implementing a multi-yearconsolidationeffort centered on revenue-enhancing and spending-reducing measures under the Fund-supported program . They stressed that their prompt response to recent initiatives that threatened to undermine tax revenues are strong indications