Latest news with #ArticleIVConsultation
Observer
03-06-2025
- Business
- Observer
IMF praises Oman's economic progress and fiscal discipline
MUSCAT: A visiting International Monetary Fund (IMF) mission has concluded its preliminary meetings with the Government of Oman as part of the 2025 Article IV Consultation. The discussions focused on recent economic, financial, and monetary developments, as well as structural reform progress in the Sultanate of Oman. The IMF commended Oman's economic performance, noting that real GDP grew by 1.7% in 2024—up from 1.2% in 2023—thanks to robust non-oil sector growth, particularly in manufacturing, logistics, tourism, and renewable energy. Growth is forecast to accelerate to 2.4% in 2025 and 3.7% in 2026, supported by the easing of OPEC+ production caps and ongoing economic diversification. Inflation remains well contained at just 0.9% year-on-year for the first four months of 2025. The Fund lauded Oman's prudent fiscal policy, which delivered a 3.3% budget surplus in 2024 despite rising infrastructure and public service investments. However, the surplus is projected to narrow to 0.5% of GDP in 2025 and 2026 due to lower oil prices, before improving again in the medium term. Public debt fell to 35.5% of GDP in 2024. The IMF highlighted Oman's continued fiscal reform momentum and targeted investments in priority sectors, praising the Oman Investment Authority's role in enhancing governance of state-owned enterprises. Oman's banking sector was described as strong, with high asset quality, solid capital and liquidity buffers, and sustained profitability. Credit to the private sector continues to expand, fueled by growing deposits and healthy net foreign assets. The Central Bank of Oman received praise for improving liquidity management and promoting financial sector development and inclusion. The external sector also showed strength, posting a current account surplus of 2.2% of GDP in 2024. A temporary deficit is expected in 2025–2026 due to softer oil prices and non-oil exports, but a return to surplus is anticipated as oil output rises. The IMF also welcomed progress in structural reforms, including tax system modernization and the Future Fund's success in attracting private investment. Ongoing investments in green hydrogen and renewables were also highlighted as key pillars of the Eleventh Five-Year Plan (2026–2030) and Oman Vision 2040. The Central Bank of Oman expressed appreciation for the IMF's assessment and reaffirmed its commitment to financial stability and a sustainable, diversified economy. — ONA
Yahoo
30-04-2025
- Business
- Yahoo
Explainer-Why did the IMF block Colombia's access to a credit line?
By Rodrigo Campos, Nelson Bocanegra NEW YORK/BOGOTA (Reuters) -The International Monetary Fund said on Saturday it had set conditions for Colombia's access to its $8.1-billion Flexible Credit Line, a precautionary tool for crisis prevention and mitigation, effectively cutting access for the country from that cash. Colombia had access to a similar tool since 2009, but only made use of it once in 2020 when the pandemic wreaked havoc on the global economy. But the IMF move shines a fresh light on the country's fiscal issues, which have been troubling financial markets for months. Analysts said the implication of losing the FCL access was a rise in borrowing costs, which was already seen in an April 15 Eurobond offering. WHAT IS AN FCL? The FCL is a fund program that requires the applicant country to have strong economic fundamentals and institutions, and a willingness to keep both. It can last for one or two years and has no preconditions once triggered. To qualify for continued access to the program, a government needs a "very positive assessment of the country's policies" in a yearly visit by the IMF to check on policy and economic direction - internally called an Article IV Consultation, according to the fund's website. Countries should also follow criteria that include a track record of capital market access at favorable terms, have low and stable inflation, and data transparency. WHAT IS COLOMBIA'S FCL? The IMF approved Colombia's current FCL in April 2024. The South American country has had access to that type of program since 2009, tapping it once in 2020 with a then $5.4-billion draw to cover budget needs during the pandemic. Colombia's current $8.1-billion FCL was approved to replace the 2022 one. Bogota said it would treat the arrangement as "precautionary," meaning it does not expect to draw unless there is an unforeseen situation. WHY WAS COLOMBIA'S ACCESS CONDITIONAL? The two-year arrangement requires an Article IV visit that results in a report followed by a midterm review to make sure access to the facility remains uninterrupted. However, Colombia did not finalize an Article IV report with the fund. In visits to Bogota in mid-February and early April, engagement has been "close," according to the IMF. Between those visits, German Avila was sworn in as new finance minister. His predecessor resigned after three months amid clashes over budget cuts, and hours after a labor reform championed by President Gustavo Petro was rejected by lawmakers. "Engagement continues as the authorities work on plans to reduce the fiscal deficit this year and going forward," an April 18 IMF staff statement said, adding the government was working on the policies underpinning projected revenue gains and necessary spending adjustments to meet the overall fiscal deficit target. The government announced this year it would cut its 2025 budget by 12 trillion pesos ($2.85 billion) to 511 trillion pesos, but an independent office said this month an additional adjustment of some 46 trillion pesos ($11 billion) is needed to meet the fiscal rule. While the government said it had complied with the fiscal rule last year citing technicalities, analysts and experts said that was not the case. WHAT NEXT? The IMF and Colombia remain engaged in Article IV consultations but until those are completed, there will not be an FCL midterm review. It is unclear whether Colombia's fragile fiscal situation would allow it to pass the review. Colombia's spreads to comparable U.S. debt have widened some 100 basis points to nearly 400 bps over the past 12 months, sharply underperforming regional peers Chile and Peru. Its $3.8-billion offering this month yielded a 7.5% coupon on the five-year debt and 8.75% for 10-year, both considered high. Colombia's midterm fiscal framework, a roadmap for the country's indebtedness for this year and next, must be published by the government by mid-June.
Reuters
30-04-2025
- Business
- Reuters
Why did the IMF block Colombia's access to a credit line?
NEW YORK/BOGOTA, April 30 (Reuters) - The International Monetary Fund said on Saturday it had set conditions for Colombia's access to its $8.1-billion Flexible Credit Line, a precautionary tool for crisis prevention and mitigation, effectively cutting access for the country from that cash. Colombia had access to a similar tool since 2009, but only made use of it once in 2020 when the pandemic wreaked havoc on the global economy. But the IMF move shines a fresh light on the country's fiscal issues, which have been troubling financial markets for months. Analysts said the implication of losing the FCL access was a rise in borrowing costs, which was already seen in an April 15 Eurobond offering. WHAT IS AN FCL? The FCL is a fund program that requires the applicant country to have strong economic fundamentals and institutions, and a willingness to keep both. It can last for one or two years and has no preconditions once triggered. To qualify for continued access to the program, a government needs a "very positive assessment of the country's policies" in a yearly visit by the IMF to check on policy and economic direction - internally called an Article IV Consultation, according to the fund's website. Countries should also follow criteria that include a track record of capital market access at favorable terms, have low and stable inflation, and data transparency. WHAT IS COLOMBIA'S FCL? The IMF approved Colombia's current FCL in April 2024. The South American country has had access to that type of program since 2009, tapping it once in 2020 with a then $5.4-billion draw to cover budget needs during the pandemic. Colombia's current $8.1-billion FCL was approved to replace the 2022 one. Bogota said it would treat the arrangement as "precautionary," meaning it does not expect to draw unless there is an unforeseen situation. WHY WAS COLOMBIA'S ACCESS CONDITIONAL? The two-year arrangement requires an Article IV visit that results in a report followed by a midterm review to make sure access to the facility remains uninterrupted. However, Colombia did not finalize an Article IV report with the fund. In visits to Bogota in mid-February and early April, engagement has been "close," according to the IMF. Between those visits, German Avila was sworn in as new finance minister. His predecessor resigned after three months amid clashes over budget cuts, and hours after a labor reform championed by President Gustavo Petro was rejected by lawmakers. "Engagement continues as the authorities work on plans to reduce the fiscal deficit this year and going forward," an April 18 IMF staff statement said, adding the government was working on the policies underpinning projected revenue gains and necessary spending adjustments to meet the overall fiscal deficit target. The government announced this year it would cut its 2025 budget by 12 trillion pesos ($2.85 billion) to 511 trillion pesos, but an independent office said this month an additional adjustment of some 46 trillion pesos ($11 billion) is needed to meet the fiscal rule. While the government said it had complied with the fiscal rule last year citing technicalities, analysts and experts said that was not the case. WHAT NEXT? The IMF and Colombia remain engaged in Article IV consultations but until those are completed, there will not be an FCL midterm review. It is unclear whether Colombia's fragile fiscal situation would allow it to pass the review. Colombia's spreads to comparable U.S. debt have widened some 100 basis points to nearly 400 bps over the past 12 months, sharply underperforming regional peers Chile and Peru. Its $3.8-billion offering this month yielded a 7.5% coupon on the five-year debt and 8.75% for 10-year, both considered high. Colombia's midterm fiscal framework, a roadmap for the country's indebtedness for this year and next, must be published by the government by mid-June.
Zawya
11-04-2025
- Business
- Zawya
International Monetary Fund (IMF) Staff Completes 2025 Article IV Mission to Mauritius
The Mauritian economy continues to exhibit resilience with growth at 4.7 percent in 2024 and contained inflation. The growth outlook remains favorable, though risks are to the downside. Mauritius needs to recalibrate the macroeconomic policy mix to rebuild fiscal space. The monetary policy framework needs to be strengthened while continued monitoring of macro-financial risks is essential to maintain financial stability. Advancing key reforms to foster external competitiveness and private sector-led growth while enhancing climate resilience will reduce external imbalances. An International Monetary Fund (IMF) mission led by Mariana Colacelli visited Mauritius from March 31 to April 11, 2025, to conduct the 2025 Article IV Consultation. At the conclusion of the visit, Ms. Colacelli issued the following statement: 'Real GDP grew by a robust 4.7 percent in 2024, driven by services, construction, and tourism. The growth outlook is favorable, supported by the services sector. However, real GDP growth is projected to soften to 3.0 percent in 2025 due to weakening external demand, easing tourism activity, and the severe drought. 'Headline inflation is projected to remain contained in 2025. Inflation eased in 2024 to 3.6 percent from 7.0 percent in 2023. Inflation was 2.5 percent in March, remaining within the Bank of Mauritius' (BOM) target range of 2-5 percent, driven by declining international food and energy prices, and lower fuel excise duties. 'The external current account deficit is estimated to have widened in 2024 while foreign reserves increased to US$ 8.4 billion at end-2024. 'A deterioration in global growth and higher uncertainty in trade and financial markets could dampen growth. Delays in recalibrating the macroeconomic policy mix could lead to a disorderly adjustment. Extreme climate events could damage infrastructure and agriculture, weakening tourism and growth. 'Policy discussions centered on recalibrating the macroeconomic policy mix to rebuild fiscal space, strengthening the monetary policy framework, and maintaining financial stability. 'As in fiscal year 2023/24, the fiscal policy stance in fiscal year 2024/25 is expected to be expansionary—with the primary fiscal deficit projected to widen to 6.6 percent of GDP, excluding grants. Public debt is projected to reach almost 90 percent of GDP at end-June 2025. Implementing an ambitious medium-term growth-friendly fiscal consolidation plan, starting in fiscal year 2025/26, is critical to help rebuild fiscal space and support fiscal sustainability. Boosting tax revenue and reducing current spending while protecting the most vulnerable, and strengthening fiscal governance, are needed. 'Since 2023, the monetary policy stance has become less accommodative, and inflation has decreased to BOM's target range. The BOM should remain ready to further tighten the monetary policy stance should inflationary pressures revive. The implementation of the monetary policy framework should be strengthened, and BOM independence must be safeguarded. Conserving foreign reserves will enhance the resilience of the economy in the face of external shocks. We support the authorities' plans to gradually phase out the BOM's ownership of the Mauritius Investment Corporation. 'Continued monitoring of macro-financial risks, including those associated with global business companies operating in the Mauritius International Financial Center and the real estate sector, will maintain financial stability. 'Advancing structural reforms to foster external competitiveness and private sector-led growth while enhancing climate resilience will reduce external imbalances. Key reforms would improve governance, sustain compliance with Anti Money Laundering/Combating the Financing of Terrorism (AML/CFT) standards, boost private sector competitiveness, and enhance labor supply and skills. "The IMF team extends its thanks to the Mauritian authorities and people for the constructive and open dialogue and warm hospitality.' Distributed by APO Group on behalf of International Monetary Fund (IMF).
Egypt Today
17-02-2025
- Business
- Egypt Today
IMF reaffirms commitment to supporting Egypt's economic reforms
CAIRO – 17 February 2025: Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), reaffirmed the fund's continued support for Egypt's economy as the country moves forward with its economic reform agenda. Speaking at the AlUla Emerging Markets Economies Conference in Saudi Arabia, Georgieva commended the Egyptian government's progress in implementing IMF-backed reforms, emphasizing that these efforts are reinforcing the nation's financial stability. She underscored that supporting Egypt's economy remains a priority for the IMF, stressing that the fund's primary focus is on economic performance, while political matters fall outside its mandate. Georgieva also announced that the IMF team overseeing Egypt will soon submit its latest review of the country's economic restructuring and financing program to the IMF Executive Board, which will evaluate the findings and make a decision accordingly. She confirmed that the review process and coordination with the Egyptian government are progressing as planned. The IMF Executive Board is set to convene later this month to conduct the fourth review of Egypt's loan program, worth $1.2 billion, alongside discussions on the Resilience and Sustainability Facility, expected to disburse $1.3 billion in phases. Additionally, the board will assess the results of Egypt's Article IV Consultation, which has been completed, and the fourth review of the Extended Fund Facility, which will determine the release of a $1.2 billion tranche.
