The Executive Board of the International Monetary Fund (IMF) concluded the fifth review of Burundi's financial performance on August 25 2014, under a three-year program backed by the IMF's Extended Credit Facility (ECF) arrangement and also completed the 2014 Article IV Consultation1 with Burundi.
Bringing total disbursements under the arrangement to an amount that equals SDR 25 million (approx. US38.1 million), the completion of the fifth review allows the immediate release of an amount that equals SDR 5 million (around US7.6 million).
In concluding the fifth review the Executive Board also accepted the authorities' requests for a change of performance criteria and indicative targets for September December 2014 for net foreign assets and net domestic assets of the central bank and net domestic funding of the government as well as for gross financial evenue and reserve money.
The three-year ECF arrangement in the amount that equals SDR 30 million (approx. US 45.7 million) was sanctioned by the Executive Board on January 27 2012.
After the discussion of the Executive Board Burundi Mr. Naoyuki Shinohara Deputy Managing Director and Acting Chair released the following statement:
'Burundi has made satisfactory progress under the ECF-supported program. Economic growth is expected to pick up to about 4.7 percent in 2014 while inflation has been declining aided by moderating international food and fuel prices and stable monetary conditions. However the medium-term economic outlook remains difficult with downside risks arising from political uncertainties ahead of the 2015 elections vulnerabilities to external shocks given Burundi's narrow export base and the large influx of refugees. Revenue slippages that emerged in the first quarter of the year were addressed through corrective measures which formed the basis for a revised budget that was adopted by parliament. Sustaining revenue mobilization enhancing tax administration and rationalizing discretionary exemptions are critical to the success of the economic program. Monetary policy should continue to focus on stabilizing inflation expectations. While underlying inflation has declined in recent months a potential fiscal deterioration financed by recourse to central bank financing could reignite inflation and reverse recent gains. Debt sustainability remains the anchor underpinning medium-term fiscal policy. Burundi continues to be at high risk of debt distress therefore it is important to rely mainly on grants and highly concessional loans. The new debt law will provide an overarching framework for effective public debt management and policy.'