A mission from the
At the end of the discussions,
The mission welcomes the progress made in pushing ahead with policies to preserve macroeconomic stability and generate higher and more inclusive growth in a challenging national and international environment. In view of this, the IMF mission reached staff-level understandings on the fourth review under the SBA detailed in an updated Memorandum of Economic and Financial Policies.
The announcement of a clear calendar for the legislative and presidential elections to be held before the end of 2014 is a key achievement in
Economic activity remains modest. Growth estimates for 2013 have been revised down to 2.3 percent. GDP will expand by 2.8 percent in 2014, with the good performance of the agricultural sector helping offset weaker than expected activity in the tourism sector. After having declined to 5 percent at end-March, headline inflation is on the rise, reaching 5.7 percent at
The authorities reform program remains on track, with all end-March quantitative performance criteria met and those for end-June expected to have been met. The indicative ceilings on social spending and current primary spending were met, despite some wage overruns.
Fiscal performance was stronger than-expected during the first five months of the year, thanks to considerable revenue mobilization. Additional wage payments and pension transfers put pressure on attaining the end-year fiscal target, but additional revenue measures and savings on expenditures ensure that fiscal consolidation remains on track. The ongoing reduction in energy subsidies is a welcome development and is necessary to lower energy consumption and create fiscal space for priority spending on health and education.
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