Category: Russian Economy

Source: IMF – News in Russian

June 18, 2025

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussions and decision.

Harare, Zimbabwe: An International Monetary Fund (IMF) staff team led by Mr. Wojciech Maliszewski visited Harare from June 4 to June 18, 2025, to conduct the 2025 Article IV Consultation.

At the conclusion of the IMF mission, Mr. Maliszewski issued the following statement:

“Zimbabwe is experiencing a degree of macroeconomic stability despite lingering policy challenges. Following successive bouts of hyperinflation over the past few years, more disciplined policies—including halting and transferring to the Treasury the quasi-fiscal operations (QFOs) of the Reserve Bank of Zimbabwe (RBZ) and tighter monetary policy despite fiscal pressures—have helped stabilize the local currency (the ‘ZiG’) and reduce inflation. Growth this year is recovering following a sharp slowdown in 2024, which was affected by a drought that lowered agricultural output by 15 percent. Electricity production also fell, and declining prices for platinum and lithium weighed on the mining output. During the first half of 2025, better climate conditions and historically high gold prices have boosted agricultural and mining activity, strengthening the current account and contributing to the recovery, with growth projected at 6 percent in 2025.

“Buoyed by the growth recovery and policy measures—a reduction in VAT tax reliefs, increased fees and levies, taxation of the COVID public servant allowance, and steps to reduce smuggling—revenue ratio increased sharply to 18 percent of GDP. That said, fiscal pressures intensified in 2024 and in the first months of 2025 as higher revenues proved insufficient to meet growing spending needs. These came notably from higher public sector wages, capital outlays related to a SADC summit, debt servicing costs on past QFOs by the RBZ taken over by the Treasury, and servicing liabilities related to the acquisition of assets for the Mutapa Investment Fund. The fiscal deficit was financed by T-bills issuance and direct borrowing from the RBZ’s overdraft facility to service debt, contributing to the expansion of domestic liquidity and an overnight drop in the value of the ZiG in September 2024, and a significant buildup of expenditure arrears that continued into 2025.

“Following the overnight drop in the value of the ZiG, inflation spiked in October 2024 then declined significantly as both the willing-buyer willing-seller (WBWS) and parallel market rates have since stabilized, helping to bring month-on-month inflation down to an average of 0.5 percent over the period February to May 2025. At the same time, the gap between the WBWS and parallel market rates has narrowed significantly, but remains at around 20 percent. In this context, the mission welcomed the repeal of Statutory Instrument 81A of 2024—which had mandated the formal sector to use the WBWS rate in the pricing of goods and services, contributing to an increase in dollarization and informality.

“To support the authorities’ stabilization efforts, key Article IV recommendations include: in the near term, fiscal policy actions to center on closing the financing gap without recourse to monetary financing and further domestic arrears buildup, while safeguarding social spending, and delivering a durable fiscal adjustment in the longer term; monetary and FX policy to focus on supporting a transition to stable national currency, with an effective monetary policy framework and market-determined exchange rate policy; and, to boost growth, structural and economic governance reforms. In this context, policy priorities include:

• Fiscal. Closing a substantial fiscal financing gap for 2025 in a way consistent with available sustainable and non-inflationary financing. This would require rationalizing spending and increasing the effectiveness of the authorities’ strategy to run a cash budget through better planning and stronger political commitment to control spending. This would also require strengthening the public spending commitment control system to avoid further arrears accumulation; and a close monitoring of domestic arrears (including through an audit of remaining arrears). The 2026 Budget will be critical to establish a policy track record, and measures will be needed to close the fiscal gap in 2026. Over the medium term, fiscal adjustment should be accompanied by fiscal-structural policies to strengthen public financial management (PFM), expenditure controls, and budget credibility.
• Monetary and FX. The mission recommends improving the functioning of the WBWS market through a more transparent price-setting mechanism and by gradually replacing surrender requirements with a requirement to convert export proceeds directly into the market through Authorized Dealers, while focusing the RBZ’s FX interventions to managing excessive volatility in the exchange rate. Monetary policy can be enhanced by the introduction of an effective deposit facility at the RBZ, followed by fully introducing indirect market instruments and phasing out direct instruments. In the longer-term, a comprehensive package of macroeconomic, financial, and structural policies should be pursued to allow for a gradual relaxation of other Capital Flow Management Measures (CFMs) and elimination of undesirable exchange restrictions noted by the Article VIII mission.
• Mutapa Investment Fund and State-owned enterprises (SOEs). To mitigate fiscal risks, the mission recommends strengthening the governance framework for the Mutapa Investment Fund—including strengthening its reporting, audit, disclosure, and oversight requirements in line with international best practices—and the overall public sector transparency and reporting.

“The authorities have also announced their plan to transition to a mono-currency system by 2030. The mission emphasized the need to continue strengthening the monetary and FX market framework in line with IMF staff recommendations. This should be complemented by measures to enhance the demand for ZiG in the domestic economy—most notably, increasing the share of Treasury’s operations (revenues and expenditures) in ZiG. To reduce any uncertainty weighing on financial intermediation, the authorities should provide more clarity on the operational implications of the transition plan, including clarifying that the use of a mono-currency will be limited to domestic transactions, allowing for bank deposits to remain denominated in both currencies.

“In the context of the requested SMP, IMF staff stands ready to resume discussions in due course once decisive steps have been taken by authorities to address the key policy issues highlighted by the mission.

“International reengagement remains critical for debt resolution and arrears clearance, which would open the door for access to external financing. In this context, the authorities’ reengagement efforts, through the Structured Dialogue Platform, are key for attaining debt sustainability and gaining access to concessional external financing.

“The IMF maintains an active engagement with Zimbabwe and continues to provide policy advice and extensive technical assistance in the areas of revenue mobilization, expenditure control, financial supervision, debt management, economic governance, as well as macroeconomic statistics. However, the IMF is currently precluded from providing financial support to Zimbabwe due to its unsustainable debt situation—based on the IMF’s Debt Sustainability Analysis (DSA)—and official external arrears. An IMF financial arrangement would require a clear path to comprehensive restructuring of Zimbabwe’s external debt, including the clearance of arrears and a reform plan that is consistent with durably restoring macroeconomic stability; enhancing inclusive growth; lowering poverty; and strengthening economic governance.

“IMF staff held meetings with His Excellency President Emmerson Mnangagwa; Minister of Finance, Economic Development and Investment Promotion Honorable Professor Mthuli Ncube, his Deputy Minister of Finance, Economic Development and Investment Promotion Honorable David Mnangagwa and his Permanent Secretary Mr. George Guvamatanga; Reserve Bank of Zimbabwe Governor Dr. John Mushayavanhu; Mr. Willard Manungo, Deputy Chief Secretary to the President and Cabinet; other senior government and RBZ officials; honorable members of Parliament; and representatives of the private sector, civil society, and Zimbabwe’s development partners.

“The IMF staff would like to thank the Zimbabwean authorities and other stakeholders for constructive discussions and support during the 2025 Article IV consultation process.”

https://www.imf.org/en/News/Articles/2025/06/18/pr-25203-zimbabwe-imf-completes-2025-article-iv-mission

MIL OSI

Source: IMF – News in Russian

June 18, 2025

• The IMF Executive Board approved a new 18-month arrangement under the Resilience and Sustainability Facility (RSF) for The Gambia for an amount equivalent to about US$63.55 million, to help the authorities improve macroeconomic resilience and build policy buffers against climate shocks. The Executive Board also completed the third review under the existing Extended Credit Facility (ECF) arrangement, enabling immediate disbursement of about US$16.95 million.
• Despite substantial downside risks, The Gambia’s economic outlook remains positive, with growth expected to reach 5.7 percent in 2025 and inflation returning to single digits.
• The Gambia has made good progress in implementing their economic reform program despite fiscal policy challenges. Key priorities include increasing domestic revenue and advancing with fiscal consolidation to safeguard debt sustainability while strengthening social and spending.

Washington, DC: The Executive Board of the International Monetary Fund (IMF) has approved an 18-month arrangement under the Resilience and Sustainability Facility (RSF) for The Gambia in the amount of SDR 46.65 million (about US$63.55 million), with disbursements to begin when the first review of the arrangement is completed. The RSF arrangement will help the authorities tackle challenges posed by climate change and reinforce the country’s long-term resilience by strengthening the legal framework and institutional environment, green public finance management, climate data and transition taxonomy, adaptation and resilience, and the energy transition.

The Executive Board also completed the third review of The Gambia’s Extended Credit Facility (ECF) arrangement, approved on January 12, 2024, supporting reforms to address long-standing structural impediments to inclusive growth. The completion of the review allows for the immediate disbursement of SDR 12.44 million (about US$16.95 million), bringing total disbursements under this arrangement to SDR 37.31 million (about US$50.82 million).

The Gambia’s economic outlook remains positive, with real GDP estimated to expand by 5.7 percent in 2025, supported by continuous recovery in the tourism sector and good performance in the agricultural and construction sectors. Headline inflation has gradually declined, reaching 8.1 percent by end-April 2025. The outlook is subject to significant downside risks stemming from global uncertainty.

While the authorities remain committed to the objectives set out in the ECF arrangement and revenue collection has been strong, unbudgeted spending pressures including from the National Water and Electricity Corporation (NAWEC) continue to weigh on fiscal balances. Going forward, steadfast implementation of the policy and reform agenda will be essential to safeguard macroeconomic gains and debt sustainability.

The Executive Board approved the authorities’ request for waivers of nonobservance of the performance criterion on the end-June 2024 floor on the domestic primary balance and the end-December 2024 ceiling on net domestic borrowing, based on corrective actions taken.

Following the Executive Board’s discussion, Deputy Managing Director Bo Li issued the following statement:

“The Gambia’s economic momentum remains robust, with resilient growth and gradually declining inflation. Program implementation has been mixed, showing satisfactory adherence to quantitative performance criteria and indicative targets but delays in meeting structural benchmarks. The authorities have reiterated their commitment to their reform agenda despite ongoing global geopolitical uncertainties.

“The authorities plan to offset the carryover of 2024 spending commitments and unbudgeted transfers by restraining non-priority spending in 2025. Adhering to the fiscal consolidation and fiscal targets for 2025 is vital for reducing fiscal risks and ensuring debt sustainability. Enhancing revenue collection to build additional fiscal buffers is also critical. Improving public financial management to prevent domestic arrears and better control multi-year commitments will support fiscal discipline and accountability. Furthermore, it is essential to limit fiscal risks from state-owned enterprises and public-private partnerships.

“The Central Bank of The Gambia’s tight and data-dependent monetary policy is appropriate and should ensure that inflation converges to the medium-term target. The foreign exchange market is functioning smoothly following the new foreign exchange policy implementation, and it is crucial to maintain an exchange rate that reflects market forces. The central bank’s commitment to cease direct financial support to public entities is a welcome measure to protect its balance sheet. Strengthening its regulatory capacity and risk-based supervision is essential to preserve the financial sector’s stability.

“Progress with structural reforms is necessary to enhance governance and improve the business environment, thereby promoting private sector development and job creation. Implementation of recommendations from the recent governance diagnostic and prompt appointment of an anti-corruption commission are essential. 

“Steadfast implementation of the authorities’ climate agenda under the newly approved Resilience and Sustainability Facility (RSF) arrangement will complement the Extended Credit Facility in bolstering economic resilience and reducing balance of payment risks. The RSF is expected to foster tighter coordination among domestic stakeholders and development partners. It will be important to carefully sequence reforms under both arrangements, supported by targeted capacity development.”

https://www.imf.org/en/News/Articles/2025/06/18/pr-25202-gambia-imf-apprv-resil-sustain-facil-arrange-completes-the-3rd-rev-under-ecf-arrange

MIL OSI

Source: IMF – News in Russian

June 18, 2025

• Growth decelerated in 2024 but is expected to rise to 1.6 percent in 2025 and 2.2 percent in 2026, while inflation is projected to decline to the Central Bank of Iceland’s 2.5 percent target in the second half of 2026. The direct impact of escalating global trade tensions is projected to be limited.
• The authorities’ plans to turn the fiscal deficit in 2024 into a surplus by 2028 are appropriate given the need to rebuild buffers; details on the planned fiscal measures to achieve these targets have enhanced the credibility of the consolidation. Monetary policy is suitably tight given still elevated inflation, but the monetary stance should be reduced as inflation declines. Efforts to raise foreign exchange reserve coverage are welcome.
• Investments in physical and human capital, alongside continued efforts to promote innovation and reduce skills mismatches are needed to support medium-term growth. Taxation can play a supportive role in reducing housing market imbalances.

Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for Iceland.[1] The authorities have consented to the publication of the Staff Report prepared for this consultation.[2]

The economy decelerated in 2024 to 0.5 percent due largely to weak exports from a disappointing fishing season and constraints on energy supply that curtailed aluminum production. Growth is expected to rebound to 1.6 percent in 2025 and 2.2 percent in 2026, driven by a recovery in exports, higher real wages, and continued monetary easing that more than offsets the impact of a moderately contractionary fiscal impulse. The impact of escalating global trade tensions is projected to be limited given that most goods exports are destined for Europe. Inflation is expected to gradually decline to the Central Bank of Iceland’s 2.5 percent target in the second half of 2026. Medium-term prospects are favorable, with continued diversification of the economy toward higher value-added export-oriented sectors anticipated to bolster productivity growth and inflows of foreign labor expected to support a modest increase in employment growth.

Risks to growth are tilted to the downside while risks to inflation are broadly balanced. In particular, the impact of rising global trade tensions could be larger than anticipated if tariffs are extended to currently exempted items (e.g., pharmaceuticals) or if a reduction in travel to and from the US negatively affects tourism. Inflation could increase if trade tensions trigger supply disruptions or capital outflows, if a premature loosening of monetary policy further de-anchors inflation expectations, or as result of second-round effects from higher wage growth. Conversely, capital inflows could result in an appreciation of the exchange rate that would weaken competitiveness and put downward pressure on inflation.

Executive Board Assessment[3]

Executive Directors agreed with the thrust of the staff appraisal. They welcomed the prudent macroeconomic policies, which have helped to reduce imbalances. While noting that medium‑term growth prospects are favorable, Directors observed that risks are tilted to the downside, notably from rising trade tensions. They emphasized the need to ensure macroeconomic stability and gradually rebuild fiscal buffers, while supporting stronger growth and reducing vulnerability to shocks.

Directors welcomed the ambitious fiscal targets and the improved transparency and credibility around the planned consolidation. They highlighted that increased infrastructure spending would help to close gaps in transport and energy and bolster growth prospects. Directors saw merit in implementing additional measures, if necessary, to achieve fiscal objectives. Noting the need to reduce procyclicality in fiscal policy, Directors supported the planned activation of revised fiscal rules in 2026. They also recommended measures to strengthen the Fiscal Council and increase the coverage and frequency of fiscal data. 

Directors noted that price pressures remain elevated and agreed that tight monetary policy remained appropriate. They encouraged the Central Bank of Iceland (CBI) to gradually loosen the policy stance as inflation declines towards target and expectations become reanchored. Directors saw merit in transitioning to a more forecast‑based inflation targeting framework as uncertainty declines. Noting the importance of increasing reserves to more prudent levels, Directors welcomed the CBI’s decision to commence regular purchases of foreign exchange.  

Directors welcomed that systemic risks in the financial sector are contained. They highlighted the need to remain vigilant to potential vulnerabilities in the housing market and the corporate sector, and to continue strengthening operational resilience. Directors saw scope to ease macroprudential policies should systemic risks recede as anticipated. While welcoming the progress on implementing FSAP recommendations, Directors urged further efforts to enhance pension fund governance, strengthen AML/CFT supervision of banks, and safeguard the independence and effectiveness of the CBI’s supervisory activities. 

Directors emphasized the importance of reforms to bolster productivity and diversify the economy, including by improving infrastructure and supporting innovation. Important measures include reducing skill mismatches, maximizing the efficiency of R&D incentives, and promoting AI while mitigating related risks. Directors welcomed plans to increase housing supply and improve housing affordability. 

It is expected that the next Article IV consultation with Iceland will be held on the standard 12‑month cycle. 

[1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

[2] Under the IMF’s Articles of Agreement, publication of documents that pertain to member countries is voluntary and requires the member consent. The staff report will be shortly published on the www.imf.org/iceland page.

[3] At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.

https://www.imf.org/en/News/Articles/2025/06/18/pr-25201-iceland-imf-executive-board-concludes-2025-article-iv-consultation

MIL OSI

Source: IMF – News in Russian

June 17, 2025

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board discussion.

Monrovia, Liberia: An International Monetary Fund (IMF) staff team, led by Mr. Daehaeng Kim, Mission Chief for Liberia, visited Monrovia from June 4 – 17, 2025, to conduct the 2025 Article IV Consultation and the Second Review under the Extended Credit Facility (ECF) arrangement.

At the conclusion of the mission, Mr. Kim issued the following statement:

“The IMF staff held engaging and constructive discussions with the authorities on recent macroeconomic developments, the economic outlook, and medium-term policy priorities under the Article IV Consultation, as well as the performance and policies supported by the Extended Credit Facility arrangement.

“The authorities have continued to make progress in maintaining macroeconomic stability, and their commitment to reform remains strong. Slow mining activity and fiscal adjustment were key factors that moderated economic activity in 2024. A significant reduction in unproductive expenditures combined with recovery of tax revenues contributed to an impressive fiscal outturn, with the primary fiscal balance improving from a deficit of 4.2 percent of GDP in 2023 to a surplus of 1.3 percent of GDP in 2024. Inflation reached 13.1 percent in February 2025, driven primarily by domestic food prices, but has come down to 11.7 percent in May. The current account has improved significantly. Overall, program performance has been broadly satisfactory.

“The medium-term outlook has been marked down due to the sudden stop of aid flows and less favorable global environment. The growth outlook is supported by a rebound in mining activity, a recovery in agriculture and sustained growth in manufacturing and services. Inflation is projected to return to single digits, supported by prudent fiscal and monetary policies and projected lower global food and crude oil prices. The current account is expected to narrow further, while the debt-to-GDP remains on a sustainable path.

“Policy dialogue under the Article IV Consultation focused on structural reforms to tackle significant development needs, mitigate climate risks, and promote private sector growth and economic diversification to achieve sustained and inclusive growth.

“IMF staff and the authorities have reached understandings on most key macroeconomic policies for the second review of the ECF arrangement. Discussions on a few outstanding issues will continue virtually, with the goal of finalizing the staff level agreement (SLA) in the coming weeks.

 “IMF staff express its gratitude to the authorities and all other counterparts for their warm hospitality and constructive engagement.”

“The team met with the leadership of the national legislature, Minister of Finance and Development Planning, Mr. Augustine K. Ngafuan, Executive Governor of the Central Bank of Liberia, Mr. Henry F. Saamoi, senior government officials, development partners, representatives of the private sector and civil society.”

https://www.imf.org/en/News/Articles/2025/06/17/pr-25200-liberia-imf-staff-concludes-staff-visit-to-liberia

MIL OSI