End-of-Mission press releases include statements of
* Implementation of the Policy Support Instrument program continues to be broadly satisfactory
* GDP growth has been robust, with some fluctuations driven mostly by variations in the stance of macroeconomic policies
* Food price increases drove 12-month inflation to 6.4 percent in
A team from the
At the end of the visit,
“Economic growth, estimated at about 7 percent, remained strong in 2016. More recently though, the economy has hit a soft patch in the context of slow budget implementation, a slowdown in monetary aggregates and credit to the private sector, and the impact of a drought. These factors are expected to ease in the second half of the year and the growth momentum to strengthen.
“Rising food prices have pushed headline 12-month inflation to 6.4 percent in
“Implementation of the PSI-supported program has been broadly satisfactory. Preliminary data indicate that most targets for
“Revenue collections during the 2016/17 fiscal year have picked up over the previous year, although they are likely to fall short of the ambitious target. The level of government spending is likely to fall well short of budgeted levels because of tightly controlled recurrent spending and delays in securing external financing. Thus, there was a small surplus of about a 0.3 percent of GDP during the first half of the fiscal year, and even with financing constraints easing in the 2nd half of the year, the overall fiscal deficit in 2016/17 is projected to be 2.5 percent of GDP, compared to 4.5 percent in the budget.
“Liquidity conditions remain tight, but are expected to ease in coming weeks, including through a decision to lower the statutory minimum reserve requirement. Furthermore, as the pace of economic activity has slowed down, non-performing loans of the banking system have risen. The mission welcomed the steps the
“The team noted that for
“The team met with Minister