Category: IMF – Russia

Source: IMF – News in Russian

July 2, 2025

• The IMF Executive Board has completed the first review under the Extended Credit Facility arrangement for the Democratic Republic of the Congo. The decision allows for an immediate disbursement of US$ 261.9 million towards international reserves, to continue building buffers.
• The DRC’s economy has been resilient in a challenging environment amid the escalation of the armed conflict in the eastern part of the country, which placed significant strains on the budget. The authorities have made good progress on the structural reform’s agenda, but a few quantitative targets were missed.
• The recent peace agreement signed between the governments of the DRC and Rwanda, mediated by the United States, is encouraging for the prospect of a peaceful resolution of the conflict and renewed focus on development goals.

Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed the first review under the Extended Credit Facility (ECF) Arrangement for the Democratic Republic of the Congo (DRC) approved on January 15, 2025 (see PR 25/003). The completion of the first review allowed an immediate disbursement equivalent to 190.4 million SDR (about US$ 261.9 million) to support balance-of-payment needs, bringing the aggregate disbursement to date to 380.5 million SDR (about 523.4 US$ million).  

The DRC has been facing significant challenges amid the intensification of the armed conflict in its eastern part since end-2024. The escalation of hostilities has claimed thousands of lives and caused severe social and humanitarian damages, including disruptions in access to essential services such as food, water, and electricity. Diplomatic efforts are ongoing to secure a cessation of hostilities and ensure sustainable peace in the region. The signing on June 27, 2025, of a peace agreement between the governments of the DRC and Rwanda, under the mediation of the United States, is encouraging for the prospect of a peaceful resolution on the ongoing conflict and renewed focus on addressing development goals.

Despite the challenging environment, economic activity remained resilient, with robust GDP growth of 6.5 percent in 2024, driven by continued dynamism in the extractive sector.  External stability has strengthened, as the current account deficit narrowed and the accumulation of international reserves continued. Inflationary pressures continue to ease, and year-on-year inflation declined from 23.8 percent at end-2023 to 11.7 percent at end-2024 and [8.5] percent at end-June 2025.

Performance under the program was mixed, as the intensification of the conflict has placed significant strains on the budget. Despite strong revenue collection, the domestic fiscal deficit reached 0.8 percent of GDP in 2024, exceeding the program target of 0.3 percent, owing to spending overruns linked to the escalation of the conflict, including on exceptional security spending and public investments. The program target on the Central Bank of the Congo (BCC)’s foreign exchange assets held with domestic correspondents was missed as well, due to higher-than-expected tax payments in foreign currency on government accounts. Other quantitative performance criteria of the ECF were met. Most indicative targets were also met, except those related to the floor on social spending and the ceiling on spending executed through emergency procedures—owing to elevated exceptional security spending linked to the conflict intensification. Appropriate corrective measures are being implemented by the authorities.

In completing the first review, the Executive Board also approved the authorities’ request for waivers of nonobservance of the performance criteria on the floor on the domestic fiscal balance at end-December 2024 on the basis of corrective actions, and the continuous ceiling on the levels of foreign currency assets of the BCC held with domestic correspondents on the basis of the temporary nature of the deviation which has since been remedied. Further, the Executive Board completed the financing assurances review under the ECF arrangement. No reform measures under the Resilience and Sustainability Facility (RSF) arrangement, approved in January 2025, were due for review at this time.

At the conclusion of the Executive Board’s discussion, Mr. Okamura, Deputy Managing Director and Chair stated:

“The Democratic Republic of the Congo (DRC) has been confronted with heightened security challenges since late 2024. The escalation of the conflict in the eastern part of the country has caused serious human, social and economic damage and induced the government to increase spending. Despite these difficulties, the macroeconomic environment of the DRC remained broadly stable. Growth has remained robust, due to the resilience of mining production. Inflation continues to decrease, and the external position has strengthened. The economic outlook remains positive, but is fraught with downside risks related to the persistence of the conflict, declining external humanitarian assistance, global economic headwinds, and potential escalation of geopolitical conflicts. The authorities are committed to closely monitor these risks and to respond proactively to evolving challenges.

“Budget implementation remains challenging in a difficult security context. As a result, the domestic fiscal deficit is projected to be larger than initially projected for 2025, but is expected to return to the path envisaged at program approval starting in 2026, reflecting the authorities’ commitment to carry out measures to enhance domestic revenue mobilization and strengthen the budget implementation process. Additionally, to guard against unforeseen adverse shocks, the authorities have adopted a contingency plan.

“The Central Bank of the Congo (BCC) has maintained a tight monetary policy stance, thereby helping bring inflation down to single digits for the first time in three years. The accumulation of international reserves has continued, on the back of the narrowing of the current account deficit. Efforts must continue, to strengthen the monetary policy implementation framework, refine the foreign exchange intervention strategy, enhance the governance and safeguards of the BCC and ensure its adequate recapitalization.

“The authorities have committed to accompany these efforts to preserve macroeconomic stability with an acceleration of structural reforms in key areas, including strengthening the AML/CFT framework, improving the business climate, enhancing transparency and governance, combating corruption and upgrading national statistics. Efforts to lay the groundwork for a timely implementation of the reform measures underpinning the RSF arrangement approved in January should be stepped up.”

Table 1. Democratic Republic of the Congo: Selected Economic and Financial Indicators, 2023-26
	2023	2024		2025		2026
	Est.	CR No. 25/023	Prel.	CR No. 25/023	Proj.	CR No. 25/023	Proj.
	(Annual percentage change, unless otherwise indicated)
GDP and prices
Real GDP	8.5	6.0	6.5	5.4	5.3	5.1	5.3
Extractive GDP	19.7	11.6	12.2	7.7	8.2	5.2	5.8
Non-extractive GDP	3.5	3.2	3.5	4.2	3.6	5.0	5.0
GDP deflator	14.4	17.4	19.9	8.8	8.2	7.4	6.7
Consumer prices, period average	19.9	17.7	17.7	8.9	8.8	7.3	7.1
Consumer prices, end of period	23.8	12.0	11.7	7.8	7.8	7.0	7.0
	(Annual change in percent of beginning-of-period broad money)
Money and credit
Net foreign assets	19.9	17.4	23.0	18.2	14.5	23.7	22.7
Net domestic assets	20.3	4.9	5.6	-3.5	-1.0	-10.9	-10.5
Domestic credit	34.3	15.4	15.2	9.9	10.5	3.7	4.2
Broad money	40.3	22.4	28.1	14.7	13.8	12.8	12.3
	(Percent of GDP, unless otherwise indicated)
Central government finance
Revenue and grants	14.8	15.6	15.2	15.0	14.8	14.9	14.9
Expenditures	16.5	16.8	16.5	16.8	17.0	16.6	16.6
Domestic fiscal balance	-1.2	-0.3	-0.8	-0.8	-1.2	-0.8	-0.8
Investment and saving
Gross national saving	9.5	9.1	9.6	12.2	11.2	13.0	12.5
Investment	15.7	14.2	13.5	15.0	14.4	15.3	14.8
Non-government	12.0	10.0	10.0	10.0	10.0	10.0	10.0
Balance of payments
Exports of goods and services	44.0	45.1	47.4	45.4	46.1	45.5	46.6
Imports of goods and services	49.9	48.9	50.3	47.3	47.5	46.9	47.0
Current account balance, incl. transfer	-6.2	-5.1	-3.9	-2.8	-3.2	-2.4	-2.4
Current account balance, excl. transfers	-7.5	-5.1	-5.0	-2.7	-3.4	-2.3	-2.6
Gross official reserves (weeks of imports)	8.2	10.0	10.1	11.5	11.8	12.7	12.8
External debt
Debt service in percent of government revenue	7.6	5.7	6.1	6.7	7.1	7.0	7.4
Sources: Congolese authorities and IMF staff estimates and projections.

https://www.imf.org/en/News/Articles/2025/07/02/pr-25238-democratic-republic-of-the-congo-imf-completes-the-1st-rev-under-ecf-arrang

MIL OSI

Source: IMF – News in Russian

July 2, 2025

Washington, DC.

Curaçao’s economic activity expanded by 5 percent in 2024, as strong tourism performance trickled into the wider economy. Stayover arrivals, growing at double digits, continued to outperform Caribbean peers and carried over to other sectors, including whole trade, real estate, and construction. Mostly related to holiday homes and hotels, construction was further fueled by strong mortgage growth and complemented by a resumption of public investments under the Road Maintenance Plan. Average headline inflation declined to 2.6 percent in 2024 from 3.5 percent in 2023, in line with global oil prices and lower US inflation. Real wages increased for the first time in five years but job creation continued to be dominated by informal construction and tourism-related sectors while formal employment declined. The primary surplus continued its upward trajectory on the back of increased tax collection on goods and services. The current account deficit widened due to higher merchandise imports, mainly related to construction activity.

The government is pursuing an ambitious agenda to steer a now tourism-led economy, amidst heightened global uncertainty. Mindful of tourism saturation and a decoupling of local living standards, the authorities strive to improve social conditions while generating sustainable and green growth amid safeguarding solid public finances. The near doubling of the tourism footprint within five years brought profound structural shifts to Curaçao’s economy, including the decline in manufacturing and rise in services, lower overall wages, higher informality, and greater reliance on – more regressive – indirect taxation. Policy responses need to shift accordingly. Priorities are rightly focused on upgrading tourist experiences and diversification, improving skills and labor market conditions, and reforming the tax system in an equitable way while addressing social spending pressures. The administration has delivered on a first round of targeted, one-off pension increases this year, continued reforms to contain health costs, expanded investment in education infrastructure, and came closer to its renewables target with the opening of the latest wind park in 2024. The landspakket, a structural reform package agreed with the Netherlands in 2020, continues to guide structural reforms.

Outlook and Risks

Growth is projected to moderate to 4 percent in 2025, balancing domestic impulses and heightened global uncertainty, before gradually converging to 2 percent over the medium term. Further expansion of stayover tourism and construction activity will continue to support growth in 2025, along with fiscal expansion driven by higher public investments. Potential negative effects of slowing global demand and heightened uncertainty would dampen tourism flows towards the end of 2025 and 2026. Growth is expected to moderate to 2 percent over the medium term, given saturation in tourism and slower global demand, while public capital spending would be carried forward, including in road infrastructure and the energy value chain. Headline inflation is projected to stabilize at 2.5 percent in 2025, subject to oil price-related uncertainty. Fiscal accounts would remain in surplus, fully compliant with the fiscal rule, allowing the government to partially settle a large bullet loan in 2025 with own liquid reserves, thereby accelerating the impressive downward trajectory of debt. The current account deficit would decline in the medium term but remain elevated.

Risks to the outlook are tilted to the downside. External risks include trade policy and investment shocks, which could induce higher inflation and lower external demand, adversely impacting tourism arrivals. Domestic upside risks include faster-than-expected advances in the green hydrogen value chain project and development of other energy sources. On the downside, lower-than-expected disbursements in public investments and delays in infrastructure improvements could set back the expected increase in potential growth from the expansion of hotel capacities. Continued high growth in mortgage credit fueling rising house prices could lead to financial sector as well as household balance sheet vulnerabilities. Buffers include access to favorable refinancing conditions on the Dutch capital market, subject to compliance with the fiscal rule, which grants the island substantial fiscal space, notably for capital and emergency spending.

Tailoring Fiscal and Structural Policies to a Tourism-led Economy

Safeguarding Medium-term Fiscal Sustainability

Reaching the medium-term debt target and further sustaining growth will require weighing the need to boost investments and address social spending pressures while reforming the tax system in an equitable manner.  

Advancing healthcare reforms is an urgent priority to restore the sector’s financial sustainability and limit medium-term fiscal risks. Annual deficits of the SVB healthcare fund amounted to around 5 percent of GDP over the past years, excluding central government transfers, with an additional 1 percent of GDP annual deficit by the Curaçao Medical Center. Transfers to the latter were recently increased to better cover operating costs and invest in new medical equipment, but the health system’s overall finances remain unsustainable. Curaçao’s health expenses, around 13 percent of GDP, stand out relative to regional peers and surpass the OECD average. Possible efficiency gains on the spending side would include additional volume and price measures for pharmaceuticals, re-evaluation of laboratory service tariffs, further expansion of primary care to contain hospital visits, and improvements in preventive care, with the latter likely to materialize over the longer horizon. Revenue reform options would include a broadening of the contributor base, e.g., via the inclusion of migrant workers, increasing co-payments for higher-income households, allowing for price differentiation for the privately insured, exploring options to charge for add-on services, with a possible secondary, private insurance market for these services, and expanding the potential in medical tourism. 

The authorities’ plans to adjust pension benefits for lower-income households in a fiscally responsible manner are welcome and should be accompanied by widening the contribution base. Staff welcomes the intention to reassess benefit levels, given the pausing of indexation and a decline in real per capita benefits by 23 percent between 2016 and 2024. Applying inflation indexation to residents’ pensions only would allow for a broadly balanced budget of the old-age pension scheme (before central government transfers). Considerations to providing a supplement for low-income pensioners, which could cost around ½ percent of GDP per year, should be partially financed by broadening the contributor base. Legalizing predominantly young migrant workers and providing incentives for them and their employers to formalize (see below) would increase revenues by about 0.3 percent of GDP. Ensuring longer-term sustainability of social insurances would likely imply tapping general budget resources, which could be expanded with selected measures while avoiding earmarking (see below). Meanwhile, the current draft law to make second-pillar occupational pension plans mandatory would reduce reliance on old-age pensions and increase private savings, which would also help alleviate the sizable current account deficit.

The authorities envisage the introduction of a VAT while continuing the modernization of the tax authority and improving revenue collection. Given Curaçao’s already significant tax burden and the recent expansion of direct taxation from a pre-pandemic average of 11 percent of GDP to 14 percent of GDP in 2024, plans to design the envisaged VAT reform in a revenue-neutral and equity-enhancing way are welcome. Expanding property taxation on second homes should be prioritized, as well as the purchase and implementation of digital infrastructure to modernize Curaçao’s tax system. Further considerations to introduce a tourism fee (by 2026), end tax holidays on import duties, and adjust permitting fees would lift revenues and contribute to compensating for potential pension increases.

Further efforts are needed to boost investments and improve government service delivery. While capacity constraints were successfully addressed in the ramp-up of investments in 2024, including by hiring external project managers, capacity in planning and execution must be strengthened further to administer the needed investment increase of 2-3 percent of GDP in the coming years, including via a centralized investment planning unit. Implementing multi-year project budgeting and establishing a transparent procurement system will be critical to improve execution, ensure the efficient allocation of financing resources, and grant space to a gradual inclusion of adaptation investments against damage from sea level rise. Efforts to render health and pension spending as well as goods and services taxation more equitable hinge on improving means-testing and maintaining a state-of-the-art registry for lower-income households.  

Labor Market Policies to Address Informality and Improve Education

Informality could be addressed by strengthening incentives for formal work, improving enforcement and monitoring, and tightening eligibility criteria for receiving benefits. Decomposing changes in the formal workforce over the past decade, the strong decline in formal employment was mostly driven by a drop in registered jobs among men, especially in prime working age. Half of this decline cannot be explained by demographics, migration, or unemployment, and is likely attributed to the transition to informality. Tourism and construction sectors offer relatively more opportunities for informal work, making it harder to design the right incentives for formalization. Incentivizing formality, however, is crucial to maintaining government revenues and ensuring social protection for workers, and could be fostered by: facilitating access to education, increasing formal sector productivity, introducing more in-work benefits for workers with incomes between minimum and median wage, and stricter eligibility criteria for monthly assistance, along with strengthening enforcement and monitoring.

Skill deterioration compounded by population aging is a key drag on long-term potential growth. The 2023 census showed that education levels of new entrants to the labor force are below the level of the pre-retirement cohort, and young employees tend to work in more precarious positions. Ongoing investments in education, in line with landspakket recommendations, including in schools’ physical as well as digital infrastructure, are very welcome. Recent initiatives to attract graduates back to the island, including with tax incentives, and an expedited labor permitting process for high-skill workers are important steps in the right direction. These could be complemented by vocational training to lift the overall skill level and reduce skill mismatches, in line with government’s proposed stimulation package with incentives for employer-led vocational education. Integrating migrants into the workforce would grant them perspectives to grow and invest in their skills.

Fostering Competitiveness and Diversification

Bracing for slower growth and mindful of market saturation and the global context, the authorities’ focus is rightly on tourism value added and diversification of source markets. Roads and transportation are among the key bottlenecks of the island, and more public investments are needed to improve the connectivity within the island for tourists to venture out. Public and private investments should also be directed to maritime infrastructure to attract more yacht tourists and move up the tourism value chain. Increasing the number of taxi licenses is welcome and will improve tourist experiences through better mobility. Efforts to tap markets in South America have proven successful, and new flight routes opened from Brazil, Argentina, and Colombia, countries with a large consumer base and rising purchasing power.

Fostering non-tourism sectors in areas of competitive advantage would help build resilience against global shocks and attract additional investments. Building on recent successful reforms to expedite business permits and promote digitalization, more progress is needed to achieve the authorities’ goals as outlined in the National Export Strategy. Curaçao’s connection to a new submarine cable throughout the Caribbean and Miami from 2027 onwards could help expand the island’s data center industry – conditional on sufficient absorption capacity of the electricity grid and a moderation in electricity prices, which remain among the highest in the region. Planned investments in the grid by Aqualectra would be supported by funding from the Netherlands and provide the basis for lifting renewables electricity production to 70 percent by 2027 from around 50 percent currently. The envisaged floating offshore wind park of 3-10 GW would help cover Curaçao’s entire electricity demand and create new export opportunities, in addition to exploratory investments in other energy sources.

In the presence of global uncertainty, diversification of trade as well as regional integration are key for mitigating Curaçao’s exposure to external shocks. Curaçao’s imports remain concentrated on advanced markets, providing ample room to expand goods imports from neighboring countries, such as Brazil and Colombia. As a new associate CARICOM member and acknowledging limitation of independent trade policy given Kingdom laws, Curaçao should continue strengthening regional cooperation and trade integration with neighboring states.

The authorities’ commitment to lower corruption vulnerabilities are welcome. The online gaming law has been approved by parliament in end-2024, an important step towards meeting the landspakket’s rule of law target. Curaçao’s recent accession to the UN Convention Against Corruption and delisting from the EU grey list of non-cooperative jurisdictions, following key legal updates in 2024, is another step in the right direction and opens doors for further international cooperation and bilateral tax treaties, as pursued by the authorities. The mutual evaluations of the AML/CFT frameworks for both Curaçao and Sint Maarten are underway, with results expected to be published in mid-July 2025.

The Monetary Union of Curaçao and Sint Maarten

The external balance of the Union is expected to improve, following a mild deterioration in 2024. The Union’s current account deficit widened to around 17 percent of GDP in 2024 driven by higher imports, mainly related to construction on Curaçao, and despite strong growth in tourism receipts. Going forward, stronger travel receipts, moderation in construction-related imports, and an increase in renewables would support a contraction of the Union’s current account deficit towards 10 percent of GDP in the medium term. The deficit will continue to be financed by private investment inflows and decumulation of assets abroad. The stock of international reserves would remain broadly stable and adequate over the medium term. Given still sizable deficits and a sustained real effective exchange rate appreciation, staff’s preliminary assessment suggests that the external position in 2024 was weaker than the level implied by fundamentals and desirable policies in Curaçao and broadly in line in Sint Maarten, albeit subject to high uncertainty given persistent measurement biases. The assessment for the Union is the same as for Curaçao due to its larger size and current account deficits.

The monetary policy stance is appropriate and continues to support the peg. Following developments in the US, the CBCS cut its benchmark pledging rate by a cumulative 100 basis points in September and November 2024 to 4.75 percent, and has kept it unchanged since then, in line with the pegged exchange rate regime. Transmission to banking sector interest rates continues to be weak, as deposit rates stayed broadly constant throughout the recent tightening and easing cycles, with a mild uptick in late 2023 driven by time deposits, and Union lending rates declined between 2018 and end 2024. Excess liquidity is the key impediment to the transmission, further exacerbated by the absence of interbank and government securities markets.

With lending rates declining, credit growth has accelerated, entirely driven by mortgages in Curaçao. Mortgage credit in the union, the second highest in the Caribbean, has been growing by double digits in real terms post pandemic, while real overall credit growth has been negative. Driven by Curaçao, mortgages are expected to remain on an upward trajectory, including financing for the construction of second homes and vacation rental apartments. In Sint Maarten, on the contrary, mortgage credit growth turned negative in 2024, possibly reflecting delays in construction projects and cross-border financing on the French side. With the islands’ financial sectors predominantly financing tourism-related activities, credit to non-tourism sectors is declining in real terms.

The financial sector is broadly sound and systemic risks are contained, but mortgage growth needs to be monitored closely while a macroprudential toolkit is further developed. Banks are well capitalized, among the highest in the region, but both NPLs and provisioning remain weaker than the CBCS early warning signal – and with respect to peers. Liquidity is abundant and has further increased, but the Union’s banks are somewhat less profitable than the Caribbean median and concentration remains high. Closely monitoring mortgage growth to detect overheating in the real estate sector and possible vulnerabilities in household balance sheets should become a priority, in particular given continued data gaps. Overcoming these gaps and further developing a macroprudential toolkit towards the introduction of CCyBs, and thresholds for the loan-to-value and debt-service-to-income ratios are warranted to detect vulnerabilities and ensure timely response to potential shocks. Caps on mortgage credit growth or mortgage loan exposure could be applied should the positive mortgage credit gap widen further.

The IMF mission would like to thank the authorities for their cooperation and the candid and constructive discussions that took place during June 18-25.

https://www.imf.org/en/News/Articles/2025/07/02/07022025-curacao-staff-concluding-statement-of-the-2025-article-iv

MIL OSI

Source: IMF – News in Russian

July 2, 2025

Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded the Article IV Consultation with Nigeria.1

The Nigerian authorities have implemented major reforms over the past two years which have improved macroeconomic stability and enhanced resilience. The authorities have removed costly fuel subsidies, stopped monetary financing of the fiscal deficit and improved the functioning of the foreign exchange market. Investor confidence has strengthened, helping Nigeria successfully tap the Eurobond market and leading to a resumption of portfolio inflows. At the same time, poverty and food insecurity have risen, and the government is now focused on raising growth.

Growth accelerated to 3.4 percent in 2024, driven mainly by increased hydrocarbon output and vibrant services sector. Agriculture remained subdued, owing to security challenges and sliding productivity. Real GDP is expected to expand by 3.4 percent in 2025, supported by the new domestic refinery, higher oil production and robust services. Against a complex and uncertain external environment, medium-term growth is projected to hover around 3½ percent, supported by domestic reform gains.

Gross and net international reserves increased in 2024, with a strong current account surplus and improved portfolio inflows. Reforms to the fx market and foreign exchange interventions have brought stability to the naira.

Naira stabilization and improvements in food production brought inflation to 23.7 percent year-on-year in April 2025 from 31 percent annual average in 2024 in the backcasted rebased CPI index released by the Nigerian Bureau of Statistics. Inflation should decline further in the medium-term with continued tight macroeconomic policies and a projected easing of retail fuel prices.

Fiscal performance improved in 2024. Revenues benefited from naira depreciation, enhanced revenue administration and higher grants, which more-than-offset rising interest and overheads spending.

Downside risks have increased with heightened global uncertainty. A further decline in oil prices or increase in financing costs would adversely affect growth, fiscal and external positions, undermine financial stability and exacerbate exchange rate pressures. A deterioration of security could impact growth and food insecurity.

Executive Board Assessment2

Executive Directors agreed with the thrust of the staff appraisal. They commended the authorities on the successful implementation of significant reforms during the past two years and welcomed the associated gains in macroeconomic stability and resilience. As these gains have yet to benefit all Nigerians, and with heightened economic uncertainty and significant downside risks, Directors emphasized the importance of agile policy making to safeguard and enhance macroeconomic stability, creating enabling conditions to boost growth, and reducing poverty.

Directors agreed that the Central Bank of Nigeria is appropriately maintaining a tight monetary policy stance, which should continue until disinflation becomes entrenched. They welcomed the discontinuation of deficit monetization and ongoing efforts to strengthen central bank governance to set the institutional foundation for inflation targeting. Directors also welcomed steps taken by the authorities to build reserves and support market confidence and praised reforms to the foreign exchange market that supported price discovery and liquidity. They called for implementation of a robust foreign exchange intervention framework focused on containing excess volatility, stressing that the exchange rate is an important shock absorber. Directors also agreed with staff’s call to phase out existing capital flow management measures in a properly timed and sequenced manner.

Directors called for a neutral fiscal stance to safeguard macroeconomic stabilization with priority given to investments that enhance growth. Directors also called for accelerating the delivery of cash transfers to assist the poor. They commended the authorities on advancing the tax reform bill, an important step towards enhancing revenue mobilization and creating fiscal space for development spending, while preserving debt sustainability.

Directors recognized actions to strengthen the banking system, including the ongoing process of increasing banks’ minimum capital. They welcomed the authorities’ efforts to boost financial inclusion and promote capital market development, while emphasizing the importance of moving to a robust risk‑based supervision for mortgage and consumer lending schemes as well as the fintech and crypto sectors. Directors welcomed progress made in strengthening the AML/CFT framework and stressed the importance of resolving remaining weaknesses to exit the FATF grey list.

To lift Nigeria’s growth outlook, improve food security, and reduce fragility, Directors highlighted the importance of tackling security, red tape, agricultural productivity, infrastructure gaps, including boosting electricity supply, as well as improved health and education spending, and making the economy more resilient to climate events. They noted that addressing structural impediments to private credit extension is also needed to support growth. Directors welcomed the IMF’s capacity development to support authorities’ reform efforts and agreed that enhancing data quality is critical for sound, data‑driven policymaking.

Table 1. Nigeria: Selected Economic and Financial Indicators, 2023–26

2023 2024 2025 2026 5/8/2025 13:03 Act. Est. Proj. Proj.  National income and prices Annual percentage change (unless otherwise specified) Real GDP (at 2010 market prices) 2.9 3.4 3.4 3.2 Oil GDP -2.2 5.5 4.9 2.3 Non-oil GDP 3.2 3.3 3.3 3.3 Non-oil non-agriculture GDP 3.9 4.1 3.7 3.7 Production of crude oil (million barrels per day) 1.5 1.5 1.7 1.7 Nominal GDP at market prices (trillions of naira) 234 277 320 367 Nominal non-oil GDP (trillions of naira) 221 260 303 351 Nominal GDP per capita (US$) 1,597 806 836 887 GDP deflator 12.6 14.5 11.4 11.4 Consumer price index (annual average) 24.7 31.4 24.0 23.0 Consumer price index (end of period) 28.9 15.4 23.0 18.0 Investment and savings Percent of GDP Gross national savings 31.8 39.6 37.5 37.7 Public -0.1 3.9 2.2 1.7 Private 31.9 35.7 35.3 36.1 Investment 30.0 30.4 30.5 33.1 Public 3.2 4.8 5.4 5.5 Private 26.8 25.6 25.1 27.6 Consolidated government operations Percent of GDP Total revenues and grants 9.8 14.4 14.2 13.8 Of which: oil and gas revenue 3.3 4.1 5.1 4.9 Of which: non-oil revenue 5.8 9.2 8.8 8.8 Total expenditure and net lending 13.9 17.1 18.9 18.7 Overall balance -4.2 -2.6 -4.7 -4.9 Non-oil primary balance -4.9 -4.9 -7.2 -6.9 Public gross debt1 48.7 52.9 52.0 50.8 Of which: FX denominated debt 18.1 25.5 25.8 24.8 FGN interest payments (percent of FGN revenue) 83.8 41.1 47.3 49.2 Money and credit Contribution to broad money growth (unless otherwise specified) Broad money (percent change; end of period) 51.9 42.7 17.9 22.3 Net foreign assets 10.5 30.4 2.1 7.2 Net domestic assets 41.3 12.3 15.8 15.1      Of which: Claims on consolidated government 20.1 -11.9 6.2 4.1 Credit to the private sector (y/y, percent) 53.6 30.1 17.9 18.2 Velocity of broad money (ratio; end of period) 2.7 3.3 2.2 2.1 External sector Annual percentage change (unless otherwise specified) Current account balance (percent of GDP) 1.8 9.2 7.0 4.6 Exports of goods and services -12.8 -4.5 -6.0 1.3 Imports of goods and services -4.4 -0.8 -6.8 8.4 Terms of trade -6.1 -0.6 -7.4 -3.3 Price of Nigerian oil (US$ per barrel) 82.3 79.9 67.7 63.3 External debt outstanding (US$ billions)2 102.9 102.2 105.9 110.2 Gross international reserves (US$ billions, CBN definition)3 33.2 40.2 36.4 39.1 Equivalent months of prospective imports of G&S 5.4 5.7 7.5 7.7 Memorandum items:   Implicit fuel subsidy (percent of GDP) 0.8 2.1 0.0 0.0 Sources: Nigerian authorities; and IMF staff estimates and projections. 1 Gross debt figures for the Federal Government and the public sector include overdrafts from the Central Bank of Nigeria (CBN).                                         2 Includes both public and private sector.                                         3 Based on the IMF definition, the gross international reserves were US$8 billion  lower in December 2024.

1 Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. Staff hold separate annual discussions with the regional institutions responsible for common policies in four currency unions—the Euro Area, the Eastern Caribbean Currency Union, the Central African Economic and Monetary Union, and the West African Economic and Monetary Union. For each of the currency unions, staff teams visit the regional institutions responsible for common policies in the currency union, collects economic and financial information, and discusses with officials the currency union’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis of discussion by the Executive Board. Both staff’s discussions with the regional institutions and the Board discussion of the annual staff report will be considered an integral part of the Article IV consultation with each member.

2 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. The Executive Board takes decisions under its lapse-of-time procedure when the Board agrees that a proposal can be considered without convening formal discussions.

https://www.imf.org/en/News/Articles/2025/07/01/pr-25231-nigeria-imf-staff-completes-2025-article-iv-mission

MIL OSI

Source: IMF – News in Russian

July 2, 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 discussion and decision.

• Timor-Leste’s growth is expected to remain robust at 3.9 percent in 2025, supported by fiscal expansion and strong credit growth. Inflation has fallen sharply but is expected to increase moderately in the remainder of 2025.
• To support growth and macroeconomic stability, Timor-Leste’s substantial savings in the Petroleum Fund should be spent better and more prudently. This would deliver higher living standards and preserve fiscal sustainability.
• The implementation of financial and fiscal reforms would accelerate private sector development and make public expenditure more efficient.

Washington, DC – July 2, 2025: An International Monetary Fund (IMF) team led by Mr. Yan Carrière-Swallow visited Dili during June 19-July 2 to conduct discussions for the 2025 Article IV consultation with Timor-Leste. At the conclusion of the discussions, Mr. Carrière-Swallow issued the following statement:

“Timor-Leste’s financial buffers and favorable demographics provide an opportunity to develop its economy. Despite impressive progress since independence, the economy remains under-diversified, and fiscal and external imbalances are large. We welcome Timor-Leste’s efforts for greater economic integration in the global and regional economies through World Trade Organization (WTO) membership and prospective ASEAN accession, which will boost growth and is providing a positive impulse to the government’s reform agenda.

“Growth is expected to remain robust at 3.9 percent in 2025, supported by fiscal expansion and strong credit growth, and to moderate to 3.3 percent in 2026. Inflation, which had fallen sharply last year as global food and energy prices declined but is expected to increase moderately as global food prices rise. Inflation is expected to average 0.9 percent in 2025 and to rise to 1.8 percent in 2026. Risks to the outlook are balanced.

“The 2026 budget should prioritize high-quality spending on physical and human capital, including health and education, while containing recurrent expenditure. The government is rightly focused on identifying measures to contain the public sector wage bill, which has grown sharply in recent years, and on implementing a Value Added Tax by January 2027.

“Absent further reforms, deficits are projected to remain large over the medium term, which would lead to a full depletion of the Petroleum Fund by the end of the 2030s. We recommend a 10-year reform agenda of structural and fiscal reforms, allowing the Timorese government to support private sector development while gradually reducing fiscal deficits to preserve debt sustainability. For 2026, our proposed reforms would be consistent with an expenditure envelope of around US$1.85 billion for central government.

“We welcome continued progress in the government’s financial sector reforms—including an insolvency framework, a secure transactions law, development of corporate accounting standards, and a new law on banking activities—whose implementation would support private sector development. We also recommend accelerating the issuance of land titles and establishing a national digital ID system, which are crucial reforms to boost access to credit, diversify the private sector, and improve the efficiency of public spending.

“The team had fruitful discussions with Minister of Finance Santina Cardoso, Central Bank Governor Hélder Lopes, other senior officials, the private sector, civil society, and development partners. On behalf of the IMF team, I would like to thank the Timorese authorities for their hospitality and excellent cooperation. The IMF stands ready to continue providing capacity development to assist the government’s operations and reform efforts.”

https://www.imf.org/en/News/Articles/2025/07/02/pr25232-imf-staff-complete-2025-article-iv-mission-to-timor-leste

MIL OSI

Source: IMF – News in Russian

July 1, 2025

Washington, DC: At the request of the Kenyan authorities, an IMF Technical Assistance mission led by Rebecca A. Sparkman visited Kenya from June 16-30, 2025, to conduct a Governance Diagnostic. This mission followed the scoping mission held on March 3-5, 2025.

The Governance Diagnostic aims to identify macro-economically critical governance weaknesses and corruption vulnerabilities, and design an action plan with specific, sequenced recommendations and reform priorities.

Reflecting the breadth of the Governance Diagnostic exercise, the visiting team comprised staff from a number of IMF departments, including the Fiscal Affairs; Legal; Finance; Monetary and Capital Markets; and Strategy, Policy and Review Departments, as well as World Bank staff. They engaged with the government and non-governmental stakeholders to examine governance weaknesses and corruption vulnerabilities across core state functions as provided by the IMF’s 2018 framework for Enhanced Engagement on Governance.

To this end, the mission team met with Kenyan authorities, including those responsible for public financial management (including procurement), expenditure policy, tax policy, revenue administration, the mining sector, market regulation, rule of law, Central Bank governance and operations, financial sector oversight, and Anti-Money Laundering/Combatting the Financing of Terrorism. Throughout the mission, the team engaged with Kenya’s anti-corruption and oversight institutions to discuss the effectiveness of legal and institutional frameworks in reducing macro-economically critical corruption vulnerabilities. The mission also met members of Kenya’s National Assembly.

Additionally, the mission met with representatives from civil society, the private sector, business associations, and international development partners to gather perspectives on governance challenges and anti-corruption efforts.

The IMF team would like to thank the Kenyan authorities and other stakeholders for their hospitality, excellent cooperation, and candid and constructive discussions.

Collaboration on the Governance Diagnostic will continue over the next several months. A draft report, which will set out the findings and propose a sequenced, prioritized reform plan, is expected to be shared with the authorities for review and additional input before end of 2025.

https://www.imf.org/en/News/Articles/2025/07/02/pr25233-kenya-imf-staff-completes-governance-diagnostic-mission-to-kenya

MIL OSI

Source: IMF – News in Russian

July 1, 2025

Sarajevo:

Growth has proven resilient supported by expansionary fiscal policies, but inflation has picked up, and risks are elevated due to external shocks and domestic political tensions. Progress towards EU accession could boost confidence, but political hurdles persist. Fiscal policy should focus on restoring buffers and improving spending quality. The authorities should refrain from further discretionary measures that widen the deficit and strengthen contingency planning. Both entities face large financing needs that are expected to be met through external borrowing, with a Eurobond issuance in FBiH and bilateral loans in the RS, along with some domestic issuances. The authorities should prepare contingency plans in case of financing shortfalls. Reforms, including a review of public employment, wages, and social benefits are needed to achieve a debt-stabilizing primary balance.

To safeguard monetary stability, it is essential to maintain the currency board and uphold the independence of the central bank. The authorities should continue to closely monitor financial sector risks and enhance crisis preparedness. The establishment of a country-wide financial stability fund, which would facilitate bank restructuring and provide liquidity on an exceptional basis, would substantially strengthen the financial safety net. To accelerate growth, the authorities need to speed up reforms to improve fiscal governance, protect financial integrity, fight corruption, and step up digitalization. Transitioning from coal to green energy along with preparing for the introduction of EU carbon taxes are major challenges ahead. Placing BiH on a higher growth path and providing its people with more opportunities will speed up income convergence with the EU and reduce emigration.

Recent developments and outlook

Despite a challenging environment, the economy has been resilient. Growth accelerated to 2.5 percent in 2024 from 2 percent in 2023, with strong domestic demand outweighing a decline in net exports. Household consumption was supported by strong growth in credit and remittances; private investment accelerated. The unemployment rate declined to 11.7 percent in Q4:2024, with real wages growing at an annual rate of 8 percent. The current account deficit widened to 4.0 percent of GDP in 2024 from 2¼ percent in 2023, reflecting a drought-induced decline in electricity exports, weaker demand for exports, and higher imports associated with strong domestic demand. Inflation fell to 1.7 percent in 2024 from 6¼ percent in 2023, owing to a slowdown in fuel and utilities prices. However, since end-2024, inflation has been rising again to 3.7 percent (yoy) in May, driven mainly by higher food prices.

The economic outlook remains uncertain amid elevated downside risks. Real GDP is projected to grow by 2.4 percent in 2025 supported by an improvement in net exports, a stronger fiscal impulse, and private consumption. However, the outlook is vulnerable to both domestic and external shocks. A worsening in geopolitical tensions and a resulting slowdown in Europe, or increased commodity price volatility could raise food and energy prices, lower BiH exports and remittances, and dampen domestic demand. An escalation of political tensions could further increase economic fragmentation and weigh on investor confidence and growth. In the absence of faster reform progress, medium-term growth is expected to remain around 3 percent—insufficient for rapid income convergence with the EU. Inflation is expected to remain elevated during 2025, and as food inflation eases, gradually decline from 2026, approaching the ECB target of 2 percent.  

Fiscal policy and reforms

Fiscal performance in 2024 was stronger than expected. The general government deficit turned out to be 1¾ percent of GDP, the same as in 2023, but better than anticipated at the time of the 2024 AIV Consultation. The authorities leveraged a large increase in tax revenues to boost spending on wages, goods and services, social benefits, and public investments.

With fiscal policy expected to ease in 2025, the authorities should avoid further discretionary measures and strengthen contingency planning. Entity budgets and subsequently-adopted measures envisage increases in public wages and pensions, reflecting both legally-mandated indexation and discretionary changes. The widening deficit, which could reach 2.6 percent of GDP, is expected to be mainly financed mostly through foreign borrowing, as well as domestic banks. The authorities should avoid policies that further expand the deficit as this would likely put upward pressure on rising prices and widen external imbalances. Moreover, given mounting downside risks, the authorities should aim to build cash buffers and develop contingency plans. Depending on the severity of a potential shock the authorities should use the available buffers and activate contingency plans.

Over the medium term, the authorities are advised to place fiscal deficits on a firmly declining path starting from 2026, build fiscal buffers, and enhance the economy’s growth potential. Persistently high deficits risk placing public debt on an upward trajectory and may worsen financing terms. Fiscal consolidation should begin in 2026, with the goal of reducing the primary deficit to its debt-stabilizing level, while improving the quality of spending and rebuilding treasury balances. Priority should be given to spending measures that enhance efficiency—particularly by rationalizing the public wage bill through functional reviews and improving the targeting of social assistance programs. These measures should be complemented by revenue mobilization efforts, including broadening the tax base through the reduction of exemptions and development of new revenue sources, such as taxing dividends. Any fiscally costly policies should be strictly avoided or offset. Given significant infrastructure gaps, increasing both the level and quality of public investment should be a key objective.

Fiscal consolidation efforts should be accompanied by institutional and structural fiscal reforms. Strengthening fiscal discipline will require a review of existing fiscal rules to assess whether they are appropriately designed to meet macroeconomic management and developmental needs and whether there are sufficient institutional arrangements in place to ensure that they are met. The recent materialization of contingent liabilities related to international arbitration cases underscores the urgency of enhancing fiscal risk management. This includes timely identification of all sources of fiscal risks, assessment of risk magnitude and likelihood, development of mitigation strategies, and reinforcement of the institutional framework. In this context, improving the oversight and governance of state-owned enterprises (SOEs) is crucial. Reducing inefficiencies in public investment management remains a priority. This involves better project selection, rigorous appraisal processes, efficient and transparency procurement, and stronger portfolio management and oversight. Finally, implementing robust beneficiary registries would improve the targeting of social assistance programs by reducing inclusion and exclusion errors, improving efficiency, and enhancing transparency and accountability.

Currency board arrangement and financial sector policies and reforms

For three decades, the currency board arrangement (CBA) has been a cornerstone of macroeconomic stability and must be preserved. The CBA has ensured the stability of the domestic currency, while reinforcing policy credibility and fiscal discipline. Benefiting from strong institutional independence, the Central Bank (CBBH), has consistently maintained net foreign exchange reserves well above the level of its monetary liabilities. Safeguarding the CBBH’s independence is critical to preserving the credibility and effectiveness of the CBA.

The CBBH should further strengthen the reserve requirement framework. In line with IMF advice, the CBBH applies differentiated remuneration rates on reserve requirements for foreign and domestic currency liabilities. Falling euro area interest rates offer an opportunity to reduce the gap with CBBH remuneration rates on required reserves and the opportunity costs for holding reserves. A further comprehensive review of the reserve requirement framework, with technical assistance from the IMF, and implementation of previous recommendations would further strengthen the CBBH’s capacity to achieve its policy objectives.  

Sustained strong credit growth calls for close monitoring of systemic risks and continued efforts to safeguard banking sector resilience. Credit expansion has been driven by rising wages, declining lending rates, and a booming real estate market. Despite this rapid growth, banks remain well capitalized, liquid, and profitable, while the share of non-performing loans continues to decline. Nonetheless, vigilance is warranted. The authorities should closely monitor financial sector developments and be prepared to deploy macroprudential tools to address risks from credit growth and rising real estate prices. Following introduction of additional capital buffers for systemic risk (SyRB) and domestic systemically important banks (D-SIBs), the macroprudential toolkit should be expanded to include a countercyclical capital buffer (CCyB) and borrower-based measures such as limits on loan-to-value (LTV) ratios and debt-service to income (DSTI) ratios. To preserve resilience, reducing the regulatory capital requirement from 12 to 10 percent as planned from end-2026 should be avoided. The authorities are also advised to avoid further extensions of temporary regulatory measures that aim to contain lending rate increases and to remove limits on bank exposures to foreign governments and central banks.

Progress made on coordination on financial sector issues, under the leadership of the CBBH, should be maintained. Regular financial sector coordination meetings strengthen inter-agency cooperation and help ensure smooth information exchange. Additionally, the authorities are encouraged to establish a country-wide Financial Stability Fund to support orderly bank resolution and to cooperate across state-level institutions and both entities to request a new IMF Financial Sector Assessment Program (FSAP)—already requested by the CBBH—to comprehensively assess resilience and outline a roadmap for further reform, including in the context of EU accession.

We commend the CBBH and the other relevant authorities for their strong efforts to integrate BiH with the Single Euro Payments Area (SEPA). SEPA integration will enable faster and more convenient euro payments across borders within the SEPA area, lower transaction costs, and foster deeper trade and economic integration within Europe. It is crucial that the relevant legislative amendments are adopted in a timely manner to pave the way for the submission of the application for SEPA membership. In addition, the development of the TIPS Clone—the project implemented by the CBBH in cooperation with the Bank of Italy—will provide infrastructure for instant payments.

Structural reforms

Advancing toward EU membership will require a stronger, more coordinated, and results-driven approach. Persistent political fragmentation, lack of consensus among governing bodies, and limited administrative capacity continue to obstruct the adoption and execution of key reforms. In this context, timely adoption and implementation of the EU Growth Plan offers a valuable opportunity. Reforms under the growth plan will align BiH more closely with the EU single market, advance EU accession, and unlock €1 billion in additional financing over 2025–27 period.

The authorities should accelerate energy sector reforms to reduce fiscal risks and prepare for implementation of the EU Carbon Border Adjustment Mechanism (CBAM). Key reforms include phasing out electricity subsidies over the medium term—while protecting vulnerable households—and advancing efficiency improvements in energy SOEs. CBAM charges are set to take effect from 2026, with the largest anticipated impact on the BiH electricity sector. To mitigate this, it is essential to establish a domestic power exchange system and an agreed roadmap and legislative framework for introduction of carbon pricing at the state level. These steps would enable BiH to unlock new investment in renewable electricity generation, reducing the overall burden of CBAM. Implementation of carbon pricing will allow BiH to retain carbon-related revenues domestically and potentially secure a CBAM exemption for electricity exports to the EU.

Reforms that tackle the labor market, governance, and digitalization are also crucial. The authorities should take a structured approach to minimum wage increases that avoids high, frequent, and ad hoc adjustments. Complementary reforms are needed to address low labor market participation (particularly among women) and high youth unemployment. The authorities should urgently implement MONEYVAL priority actions to avoid being grey listed by the Financial Action Task Force (FATF) in early 2026. Grey listing could impose significant economic costs through reduced investment, delays in international payments, and increased transaction costs. Finally, developing digital identity and trust services, and providing government e-services, would strengthen the business environment.

*   *   *   *   *

The mission thanks the authorities and all other counterparts for their hospitality and for the constructive and insightful discussions in Sarajevo and Banja Luka.

https://www.imf.org/en/News/Articles/2025/07/01/cs-070125-bosnia-and-herzegovina-staff-concluding-statement-for-2025-aiv-consultation-mission

MIL OSI

Source: IMF – News in Russian

Comprehensive reforms have fueled Seychelles’ journey out of crisis and its continued resilience in the face of shocks

Todd Schneider is IMF mission chief to Seychelles and an advisor in the IMF’s African Department, where Hany Abdel-Latif is an economist, Pedro Maciel is a senior economist, and Henry Quach is a research analyst.

https://www.imf.org/en/News/Articles/2025/07/01/cf-seychelles-path-to-macroeconomic-stability-and-resilience

MIL OSI

Source: IMF – News in Russian

July 1, 2025

Bern: Switzerland continues to benefit from strong fundamentals, highly credible institutions, and a skilled labor force, positioning it among the world’s most competitive, resilient, and innovative economies. Economic performance has been strong. Nonetheless, Switzerland faces important challenges, including from evolving global economic conditions, rising global trade tensions, and persistent safe-haven pressures and franc appreciation. The ongoing IMF Financial Sector Assessment Program (FSAP) has called for strengthening supervisory, resolution, and crisis management frameworks, including to address gaps exposed during the Credit Suisse crisis, where the authorities are taking action. Navigating these challenges will require broad policy consensus and effective macroeconomic management. Priorities include safeguarding price stability, addressing emerging fiscal pressures, advancing strong financial sector reforms, implementing structural measures to boost productivity and competitiveness, and ratifying the new package of agreements with the EU to enhance external resilience.

Economic Outlook

With global headwinds, growth is projected to remain somewhat below potential in 2025-26. Growth is expected to reach 1.3 percent in 2025 (sporting events adjusted), up from 1 percent in 2024, driven by private consumption supported by real wage growth and stronger construction activity with easier monetary conditions. While unemployment rates have remained near their natural level, recent labor market indicators suggest some softening, e.g., declines in the vacancy-to-employment ratio. This is in line with moderate slack (0.3 percent of potential GDP) in 2025. Growth is projected at 1.2 percent in 2026, converging to potential (1.5 percent) by 2030, driven by a gradual increase in domestic and external demand; trade tariffs in the baseline reflect those prevailing in June 2025. Switzerland’s external position is assessed to be broadly in line with medium-term fundamentals and desirable policies.

With a temporary decline below zero, headline inflation in 2025 will remain subdued; core inflation is expected to stay above zero and within the price stability range. While core inflation through May was 0.5 percent (y/y), reflecting some deceleration in rent inflation, headline inflation declined to -0.1 percent (y/y) driven by franc appreciation, lower electricity tariffs, and softer international oil prices, and is projected to end 2025 at 0.1 percent (y/y). Accommodative monetary policy and higher oil prices are expected to drive headline inflation to 0.6 percent (y/y) by end-2026.

Important risks loom, particularly from external factors. Worsening geopolitical tensions and fragmentation, volatile energy prices, and uncertainty over trade policy and tariff levels could adversely impact confidence, exports, and investment. Sectoral impacts would likely vary. Heightened uncertainty could spark further safe-haven inflows and appreciation pressures with additional challenges for export-oriented and import-competing sectors. If heightened uncertainty extends over the medium term, Switzerland’s growth model could be affected if supply chains are disrupted and R&D spending is scaled back, impacting innovation, productivity, and potential growth. On the upside, a positive resolution of tariff negotiations with the U.S., both for Switzerland and the EU, would lead to better growth prospects and alleviate appreciation pressures. Fiscal easing in Germany may also support activity more than expected. Domestic demand may be bolstered by planned pension payment increases.

Monetary Policy: Mitigating Deflationary Pressures

The recent 25 bps policy rate cut was appropriate considering recent declines in inflation, signs of weakening in the labor market, and external uncertainty. This brought the cumulative policy easing over the past 1½ years to 175 bps and placed the policy rate at zero. Notably, core inflation has remained within the Swiss National Bank’s (SNB) 0–2 percent price stability range, and medium-term inflation expectations have stayed anchored around the mid-point of the range. While additional easing may be needed if deflationary pressures materialize, future policy action needs to consider that trade-offs of further easing become more pronounced when policy rates decline below zero. Negative rates may amplify financial sector risks through lower bank profitability and possibly higher real estate exposures. Given the limited space for further policy rate cuts (the SNB’s main policy tool), these should be aimed at sharp and (or) persistent deflationary pressures that risk de-anchoring medium-term inflation expectations. Temporarily negative headline inflation should not warrant further easing. While intervention in the foreign exchange market (FXIs) may be needed to smooth the impact of safe-haven financial inflow surges, FXIs should continue to be considered cautiously, also given the SNB’s already large balance sheet. To mitigate balance sheet risks, the upcoming review of dividend policy should ensure that robust capital buffers are maintained and refrain from raising distributions.

The SNB should continue to assess whether its monetary policy and communication frameworks warrant adjustments. Given the specific challenges facing Swiss monetary policy in a context of elevated uncertainty and low equilibrium interest rates, a review, possibly with external support as in the case of other major central banks, could be useful. The SNB should consider whether providing additional information in the context of monetary policy assessments or between quarterly meetings could support policy guidance. In light of the heightened uncertainty, attention should be given to clarifying the reaction function (including via scenario analysis) and strengthening the formulation of risks to the outlook.

 

Fiscal Policy: Addressing Long-Term Fiscal Challenges

The moderately looser fiscal stance projected for 2025 is appropriate given some economic slack. The general government’s overall fiscal surplus is projected to decline to 0.3 percent of GDP in 2025 from 0.6 percent of GDP in 2024, largely reflecting a reduction in the surplus of social security funds. The federal government’s deficit is projected to remain broadly unchanged vs. 2024 (0.2 percent of GDP), as higher defense and social welfare spending is offset by budget consolidation measures. The proposed Relief Package 2027 aims to cut expenditures by CHF 2–3 billion on a permanent basis from 2027 onwards to comply with the debt brake rule amid spending pressures and uncertain tax reform impacts. Staff note the limited room for maneuver implied by the debt-brake rule and the authorities’ choice of spending cuts over tax hikes. If moderate downside risks materialize, automatic stabilizers should operate fully. In the event of severe shocks, targeted transfers may be warranted via extraordinary provisions of the debt brake rule to avoid a deep recession, including one induced by a deflationary spiral. As in the past, staff note that there is a bias toward fiscal surpluses through spending below budget allocations and cautious revenue forecasts; efforts should continue to mitigate this where possible.

Planned increases in pension payments will require additional revenues to preserve the financial strength of social security funds. A new 13^th monthly pension payment, planned to start in December 2026, will require additional outlays of CHF 4.2 billion annually (0.5 percent of GDP). To this end, the Federal Council has proposed financing options, including a VAT rate increase of 0.7 ppt. Continued efforts, including stabilizing Pillar I pension finances for 2030-40, are essential to ensure long-term pension system viability amidst changing demographics and rising costs. Timely repayment (or recapitalization) of the disability insurance (IV) debt to the old-age and survivor’s insurance (AHV) is critical to safeguarding the structural and financial soundness of both schemes.

Demographic trends, climate change, and defense spending pressures create medium-to-long term fiscal challenges. The 2024 Fiscal Sustainability Report projected demographic-related expenditures rising by 3 percent of GDP by 2060; absent compensatory policy decisions, climate mitigation measures to reach the net zero target could raise public debt by 3–4 ppt of GDP by 2040 and 8–11 ppt by 2060, depending on policy choices (e.g., carbon taxation vs. subsidies) and compared to a business-as-usual scenario. Defense spending is expected to increase significantly by 2032. Given the provisions of the debt brake rule, a comprehensive medium-and-long term plan is needed to identify and ensure that revenue increases and spending reprioritization are sufficient to meet these and other needs. A careful assessment is needed to determine whether pressures will emerge at the federal or cantonal level and whether the division of responsibilities across levels of government may need to be adjusted accordingly.

Financial Sector: Enhancing Systemic Resilience

While Switzerland’s financial system demonstrated resilience, systemic risks have remained high due to sizable real estate exposures. Mortgages account for a large share of bank lending and of assets of life insurers and pension funds. Risks are heightened by house price overvaluation, loosening mortgage lending standards, and initiatives to ease affordability criteria for new borrowers. Lower interest rates may further pressure banks, potentially leading to increased risk-taking.

The ongoing FSAP has found the financial sector to be broadly resilient to severe shocks. Systemically-important (SIBs) and most other banks would remain above regulatory capital requirements under stress. Overall, liquidity risks for banks are relatively limited. Insurers also withstand severe solvency and liquidity scenarios. Still, global uncertainty and financial stability risks warrant reinforcing resilience.

The 2023 Credit Suisse (CS) crisis exposed gaps in supervisory, resolution and crisis management frameworks and increased Too-Big-To-Fail (TBTF) risks, which the authorities have begun to address. Drawing on lessons from the CS crisis, the Federal Council has recently proposed several reforms aimed at strengthening the financial sector and thereby reducing the risks for the state, taxpayers and the economy. These would improve the TBTF framework, enhance bank governance, strengthen prevention, early intervention, and crisis preparedness, and expand the powers of FINMA. Staff commends the authorities as these proposals are broadly in line with FSAP recommendations; timely implementation of these bold reforms would further strengthen the long-term stability of the Swiss financial center.

Enhanced legal powers and resources for FINMA are critical to strengthening the effectiveness of supervision. FINMA’s legal powers should be expanded to include a full suite of early intervention powers, immediately enforceable, including the ability to preemptively restrict banks’ business activities, require capital conservation measures, address governance failures, and rectify deficiencies in risk management. FINMA should be able to conduct onsite inspections as necessary, require forward-looking Pillar 2 capital add-on, impose administrative fines, and have broader ability to prescribe binding supervisory standards. FINMA should reduce reliance on external auditors. Enhanced market monitoring and reporting and better mechanisms for market abuse prevention, detection, and enforcement would benefit securities supervision. Overall, more supervisory resources are needed, including for direct supervision in corporate governance, risk management, market conduct, AML/CFT, cyber risk, and recovery and resolution. FINMA needs to be proactive and direct in its engagement with supervised firms across sectors (banks, insurance, securities).

Systemic real estate risks call for expanding the macroprudential toolkit. The FSAP recommends introducing a debt-service-to-income (DSTI) cap in addition to the existing loan-to-value (LTV) cap and a sectoral capital-based instrument, separate from the sectoral countercyclical buffer (CCyB), which already stands at the 2.5 percent maximum. It would be also helpful to establish a formal Systemic Risk Council, comprised of SNB, FINMA, and Federal Department of Finance (FDF) representatives to regularly assess and communicate on systemic risk and decide on necessary policy measures.

Switzerland’s financial safety net should be cast wider to better secure financial stability. Resolution planning should also cover Category 3 banks, which include some large and complex market participants, as well as designated insurance groups, and financial market infrastructures. FINMA, SNB, and FDF need to develop, and practice coordinated crisis response plans. The cap on deposit insurance contributions should be removed, and deposit insurance gradually aligned with international best practices. SNB efforts to establish and communicate a comprehensive emergency liquidity assistance framework—expanding support to all banks and making drawing conditions more flexible—are an important reinforcement of the safety net. The introduction of a Public Liquidity Backstop for SIBs, with the possibility of extending it to non-SIBs that might be systemic in failure, would provide an instrument allowing additional room for maneuver in a crisis.

To protect the resilience and integrity of the Swiss financial center, enhanced vigilance on cyber, AML/CFT, crypto, and fintech risks is paramount. The cyber resilience framework should be broadened to all financial sector entities and external service providers. Progress in rolling out the Registry of Beneficial Ownership should continue, and the legal framework expanded to gatekeepers, including lawyers, accountants, trust, and company service providers. Crypto exposures, which are increasing, should be assessed comprehensively and the related Basel standards implemented in a timely manner. The concentrated and increasingly complex FMI structure warrants closer oversight and enhanced collaboration with foreign authorities, particularly in shared risk management platforms, recovery, and resolution.

Structural Policies: Supporting Productivity Growth and Resilience to Global Shocks

Switzerland enjoys high labor productivity—on par with the U.S. and above European peers. This has been supported by strong R&D, a high-quality education system, and deep global integration that fosters competition and innovation. Multinational corporations in high-value-added manufacturing have driven much of this performance. Labor productivity in small firms and services has lagged, constrained by low R&D intensity, limited access to funding, small markets, and expensive skilled labor. To sustain its competitive edge, Switzerland would benefit from policies that reduce administrative burdens, improve access to equity and R&D financing, strengthen ties to larger markets, and address labor shortages through upskilling and an open labor market. The ongoing revision of the Vocational Training Act is a welcome step, reinforcing Switzerland’s strength in workforce development and skills adaptation in a changing economy.

The conclusion of negotiations with the EU resulted in a broad package of sectoral agreements aimed at stabilizing and developing bilateral relations. These agreements—covering areas such as electricity, food safety, and participation in EU programs—will require ratification by both sides, for which the necessary procedures have been launched. Continued engagement with the EU and other partners remains important to reduce uncertainty, safeguard access to critical markets, and strengthen resilience in the face of rising geo-economic fragmentation.

 

*   *   *   *   *

 

The IMF team thanks the Swiss authorities and other stakeholders for their hospitality, engaging discussions, and productive collaboration. We are especially grateful to the SNB and the State Secretariat for International Finance for assistance with arrangements.

https://www.imf.org/en/News/Articles/2025/06/30/07012025-mcs-switzerland-imf-concluding-statement-2025-art-iv-consultation-mission

MIL OSI

Source: IMF – News in Russian

June 30, 2025

• The IMF Executive Board today concluded the 2025 Article IV consultation and completed the eighth review under the Extended Credit Facility (ECF) for Guinea-Bissau. The completion of the review allows for an immediate disbursement of SDR 4.73 million (about US$ 6.5 million), bringing total disbursement under the arrangement to SDR 35.04 million (about US$ 48.1 million)
• Program performance was mixed. Seven out of nine Quantitative Performance Criteria and three out of four Structural Benchmarks for end-December 2024 were met. The continuous Structural Benchmark on debt service payments was met while the continuous Structural Benchmark on the expenditure committee (COTADO) was missed.
• Growth is expected to reach 5.1 percent in 2025 while inflation should average 2 percent. The current account deficit is expected to narrow to 5.8 percent of GDP in 2025, reflecting better terms of trade. The authorities are committed to achieving a fiscal deficit of 3.4 percent of GDP in 2025, to put public debt on a firm downward trajectory. The economic outlook is positive but remains subject to significant domestic and external risks.

Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded today the 2025 Article IV consultation[1] and completed the eighth review under Extended Credit Facility (ECF) arrangement for Guinea-Bissau. The three-year arrangement, approved on January 30, 2023, aims to secure debt sustainability, improve governance, and reduce corruption, while creating fiscal space to foster inclusive growth. The Executive Board granted an augmentation of access (140 percent of quota or SDR 39.76 million) on November 29, 2023. The completion of the eighth review enables the disbursement of SDR 4.73 million (about US$ 6.5 million) to help meet the country’s balance-of-payments and fiscal financing needs. This brings total disbursement under the arrangement to SDR 35.04 million (about US$ 48.1 million). The authorities have consented to the publication of the Staff Report prepared for this consultation.[2]

Program performance was mixed. Seven out of nine Quantitative Performance Criteria and three out of four Structural Benchmarks for end-December 2024 were met. The continuous Structural Benchmark on debt service payments was met while the continuous Structural Benchmark on the expenditure committee (COTADO) was missed. In completing the eighth review, the Executive Board granted waivers for the non-observance of quantitative performance criteria based on corrective actions taken by the authorities [including the revenue and expenditure measures adopted as prior actions for the review], approved the authorities’ request for modification of performance criteria and indicative targets, and completed the financing assurance review. The Executive Board also approved the authorities’ request for the program extension until July 29, 2026, and rephasing of access to provide them with sufficient time to implement fiscal consolidation policies supported by the ECF program.

Economic growth is projected to reach 5.1 percent in 2025, supported by strong exports and investments, while inflation is expected to decelerate and average 2 percent. The current account deficit should narrow to 5.8 percent of GDP in 2025, reflecting a significant improvement in Guinea-Bissau’s terms of trade. The authorities are committed to achieving a fiscal deficit of 3.4 percent of GDP in 2025 to put public debt on a firm downward trajectory. While the direct impact of recent global trade tensions on Guinea-Bissau is limited, the economy remains subject to significant downside risks amid a challenging socio-political climate in an election year and capacity constraints. The 2025 Article IV consultation discussions focused on policies aimed at supporting economic diversification to reduce dependency on cashew nuts, maintaining fiscal sustainability through domestic revenue mobilization, and bolstering social protection and human capital to promote inclusive growth.

Following the Executive Board discussion, Mr. Okamura, Deputy Managing Director and Acting Chair, issued the following statement:

“The economy of Guinea-Bissau has been resilient, supported by strong investment spending. While growth is projected to continue around its potential of 4½-5 percent over the medium term, significant challenges remain. In particular, the high export dependency on cashew nuts and the high risk of debt distress leave the country vulnerable to adverse changes in the international environment. Against this background, the authorities are focused on policies designed to diversify the economy and broaden the export base, including by supporting additional growth sectors such as mining and fishing.

“Achieving the fiscal consolidation target for 2025 is essential to reduce public debt vulnerabilities. In this context, the authorities remain committed to containing domestic primary spending within the 2025 budget and to maintain strict control over the wage bill. This is being supported by strong expenditure controls, including by ensuring that project disbursements are thoroughly verified and discretionary spending remains within agreed allocations. Measures to boost revenue mobilization to bring tax collection closer to its potential through a combination of tax policy measures and revenue administration reforms are vital to create fiscal space to support economic development while reducing fiscal risks.

“Good progress has been made in addressing financial sector vulnerabilities. The recent approval by the regional Banking Commission for the purchase offer for the undercapitalized bank, and the authorities’ decision to divest the government’s stake in the bank, are important steps in reducing systemic financial sector risks.

“Boosting inclusive growth calls for implementing sustained social protection programs to protect the poor, diversifying the economy, strengthening the business environment and governance, and improving the efficiency of education and health spending. Broadening the coverage of social protection programs and mainstreaming them within government structures would help reduce poverty indicators. At the same time, progressively reducing broad-based subsidies and moving towards more targeted programs would also boost the impact of social spending.”

 

Executive Board Assessment[3]

Executive Directors agreed with the thrust of the staff appraisal. They welcomed the resilience of the economy and the significant progress in infrastructure development since the last Article IV consultation. Noting the mixed performance under the ECF and significant downside risks, they welcomed the strong corrective measures that have been implemented as prior actions for the eighth ECF review. They supported the authorities’ request for a six-month extension of the ECF, to help anchor the fiscal targets for the whole of 2025 and reinforce the commitment to fiscal consolidation.

Given the high risk of debt distress, Directors underscored the critical importance of sustained fiscal consolidation and further reinforcing debt management to ensure that the debt to GDP ratio remains on a downward trajectory. They encouraged the authorities to boost revenue mobilization through tax policy and tax administration measures, thereby creating fiscal space for priority social and development spending while strengthening debt sustainability. They called for reinforcing expenditure controls and strengthening public financial management to contain the wage bill and prevent the recurrence of spending overruns. Continuing to refrain from nonconcessional borrowing while keeping further concessional borrowing within program targets remains important. Fiscal risks from the public utility company should also be addressed, including by speeding up its revenue mobilization.

Directors welcomed the approval of the sale of the undercapitalized bank, which paves the way for the government’s disengagement. They called for a swift capitalization of the bank by its new owners to strengthen financial sector resilience.

Directors stressed the need for sustained structural reforms to underpin macroeconomic stabilization and boost growth. They highlighted the importance of efforts to strengthen the business environment, remove market distortions, and reduce informality. Diversifying the economy, notably in sectors with potential such as fishing, mining, and traditional agriculture, remains critical for inclusive growth and reducing dependence on cashew exports. They urged the authorities to expedite steps to strengthen governance, anti-corruption, and AML/CFT standards. They called for reforms to strengthen procurement transparency and enhance the robustness of the audit function, to help improve public sector transparency and efficiency.

Directors positively noted the authorities’ efforts to address gaps in the provision of macroeconomic data.

It is expected that the next Article IV consultation with Guinea Bissau will be held on a 24-month cycle in accordance with the Executive Board decision on consultation cycles for members with Fund arrangements.

 

Guinea-Bissau: Selected Economic Indicators, 2022-26 Population (2024): 2.0 million                                      Per capita GDP (2024): US$ 1,104 Main export product: cashew nuts                               Key export markets: India, Vietnam   2022 2023 2024 2025 2026       Prel. Proj. Proj. Output           Real GPD growth (%) 4.6 5.2 4.8 5.1 5.0 Prices           Inflation (annual average, %) 7.9 7.2 3.7 2.0 2.0 Central government finances           Revenue and grants (% GDP) 15.2 13.7 13.1 16.1 15.7 Expenditure (% GDP) 21.3 21.9 20.4 19.5 19.2 Fiscal balance (% GDP) -6.1 -8.2 -7.3 -3.4 -3.5 Public debt (% GDP) 80.7 79.4 82.2 78.5 76.3 Money and credit           Broad money (% change) 3.5 -1.1 6.2 5.6 5.4 Credit to economy (% change) 23.5 -9.4 -12.2 14.4 13.8 Balance of payments           Current account (% GDP) -8.6 -8.6 -8.2 -5.8 -5.0 FDI (% GDP) 1.2 1.2 1.2 1.2 1.2 WAEMU reserves (US$ billions) 25.2 26.1 … … … External public debt (% GDP) 39.0 35.4 34.7 32.0 30.9 Exchange rate           CFAF/US$ (average) 622.4 606.5 606.2 … … Sources: Guinea-Bissau authorities and IMF staff estimates and projections

[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/guinea-bissau 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/2025/07/01/pr25230-guinea-bissau-2025-article-iv-and-eighth-review

MIL OSI

Source: IMF – News in Russian

June 30, 2025

• The IMF Executive Board today completed the second review under the Extended Credit Facility (ECF) arrangement for Togo, allowing the authorities to draw about SDR 44.0 million (about US$ 60.5 million). The Executive Board approved the 42-month ECF arrangement in March 2024 and concluded the first review in December 2024.
• Growth has remained robust, and inflation has continued to slow. The medium-term economic outlook is favorable, with sustained robust growth, but elevated risks remain.
• Implementation of the IMF-supported program has been broadly satisfactory: the authorities met all quantitative targets at end-December 2024 except for the performance criterion on the fiscal balance, and they have met all but one structural benchmark due since the completion of the first ECF review.

Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed the second review of the Extended Credit Facility (ECF) arrangement for Togo. The Board’s decision enables the immediate disbursement of about SDR 44.0 million (about US$ 60.5 million), which will be used for budget support. The ECF-arrangement provides overall financing of SDR 293.60 million (about US$ 403.4 million) on favorable terms.

The IMF approved the ECF arrangement in March 2024 to help the authorities address the legacies of shocks experienced since 2020, notably the COVID pandemic and the increase in global food and fuel prices. The Togolese authorities were able to lessen the impacts of these shocks on the Togolese population, but this came at the price of large fiscal deficits and a rapidly rising public debt burden. The IMF-supported government program aims to (i) make growth more inclusive while strengthening debt sustainability, and (ii) implement structural reforms to support growth and limit fiscal and financial sector risks. The IMF Executive Board completed the first ECF review in December 2024.  

The medium-term outlook is broadly favorable, with continued robust growth. Economic growth reached an estimated 5.3 percent in 2024 and is projected at 5.2 percent in 2025 and 5.5 percent per year thereafter, according to IMF staff projections, barring major adverse shocks. Headline inflation eased to 2.6 percent in April 2025 and core inflation (which excludes the prices of energy and fresh products) fell to 1.3 percent (annual averages).

However, the outlook is subject to high risks. In particular, insecurity from the presence of terrorist groups at the country’s northern border continues, putting pressure on spending. The authorities face challenging trade-offs between the need to achieve fiscal consolidation to lower the debt burden and the need to maintain security, enhance inclusion, and support growth.

Implementation of the IMF-supported program has been broadly satisfactory. The authorities met all quantitative targets at end-December 2024 except for the performance criterion on the fiscal balance. A notable success has been that the authorities raised tax revenue in 2024 as planned and pushed non-tax revenue beyond expectations. At the same time, higher-than-budgeted spending pushed debt higher. The authorities also met all but one structural benchmark due since the completion of the first ECF review, thanks to public financial management and banking sector reforms.

At the conclusion of the Executive Board’s discussion, Mr. Kenji Okamura, Deputy Managing Director, and Acting Chair, made the following statement: 

“The authorities have implemented the IMF-supported program in an overall satisfactory manner in an environment marked by continued security challenges, tight financing conditions, and elevated global uncertainty. Among other achievements, the authorities mobilized tax revenue in line with targets, while non-tax revenue exceeded projections.

“Nonetheless, progress on fiscal consolidation has been slower than programmed due to operations the authorities recorded below the line, resulting in faster-than-expected debt accumulation. The authorities’ efforts to address this development, in particular the publication of an innovative note on budget execution and debt accumulation, are welcome.

“Against this background, the authorities are encouraged to redouble their efforts at fiscal consolidation while preserving growth and strengthening inclusion. The IMF approves the authorities’ request for a limited relaxation of the fiscal deficit target for 2024 and for delaying the goal of lowering the present value of debt below 55 percent of GDP by one year, to 2027. These modifications appropriately balance the need to respond to security threats against the need to strengthen debt sustainability. 

“Further, the authorities are encouraged to continue efforts to enhance revenue while making taxation more efficient, supported by a timely elaboration of a medium-term revenue mobilization strategy. Reforms to improve the efficiency of spending and strengthen the effectiveness of the social safety net, including phasing out fuel subsidies, will also be important. Further, it will be important to strengthen electricity and water provision, including raising tariffs to ensure cost recovery in combination with measures to protect the most vulnerable.

“The IMF welcomes the authorities’ efforts to reduce financial sector and fiscal risks by recapitalizing the remaining state-owned bank, which have boosted the bank’s compliance with regulatory norms. Further efforts will be needed to address the remaining breaches of regulatory norms and to restructure the bank’s operations to ensure its stability and profitability.

“Finally, efforts to strengthen governance will be critical for nurturing the business environment and supporting sustainable growth. The authorities’ commitment to publishing the planned Governance Diagnostic Assessment is very welcome. The authorities should also align asset and income declarations regime with international standards.”

Togo: Selected Economic and Financial Indicators, 2023–27
	2023	2024	2025	2026	2027
	Estimates		Projections
Real GDP	5.6	5.3	5.2	5.5	5.5
Real GDP per capita	3.1	2.8	2.7	3.0	3.0
GDP deflator	2.9	2.2	2.0	2.0	2.0
Consumer price index (annual average)	5.3	2.9	2.3	2.0	2.0
GDP (CFAF billions)	5,507	5,927	6,360	6,843	7,364
Exchange rate CFAF/US$ (annual average level)	606	…	…	…	…
Real effective exchange rate (appreciation = –)	-8.2	…	…	…	…
Terms of trade (deterioration = –)	2.5	-0.4	-0.3	0.9	0.6
Monetary survey
Net foreign assets	2.0	1.3	3.6	2.4	2.3
Net credit to government	1.2	8.6	2.6	-1.3	-0.1
Credit to nongovernment sector	2.9	3.6	1.4	7.4	7.0
Broad money (M2)	6.5	8.5	7.3	7.6	7.6
Velocity (GDP/end-of-period M2)	2.0	2.0	2.0	2.0	2.0
Investment and savings
Gross domestic investment	28.0	26.8	25.6	24.4	25.3
Government	11.5	10.1	8.5	7.1	7.8
Nongovernment	16.5	16.7	17.1	17.3	17.5
Gross national savings	24.0	23.7	23.2	23.0	24.3
Government	4.8	2.7	4.6	4.1	4.8
Nongovernment	19.2	20.9	18.7	18.8	19.5
Government budget
Total revenue and grants	19.8	19.0	18.8	18.5	19.0
Revenue	16.8	17.0	16.6	17.1	17.6
Tax revenue	14.8	14.9	15.4	15.9	16.4
Expenditure and net lending	26.6	26.4	22.7	21.5	22.0
Expenditure and net lending (excl. banking sector operations)	26.6	25.4	22.3	21.5	22.0
Primary balance (commitment basis, incl. grants)	-3.9	-4.5	-1.2	-0.2	-0.4
Overall balance (commitment basis, incl. grants, excl. banking sector operations)	-6.7	-6.4	-3.5	-3.0	-3.0
Overall balance (commitment basis, incl. grants)	-6.7	-7.4	-3.9	-3.0	-3.0
Primary balance (cash basis, incl. grants)	-3.9	-4.5	-1.2	-0.2	-0.4
Overall balance (cash basis, incl. grants, excl. banking sector operations)	-6.7	-6.4	-3.5	-3.0	-3.0
Overall balance (cash basis, incl. grants)	-6.7	-7.4	-3.9	-3.0	-3.0
External sector
Current account balance	-4.0	-3.2	-2.3	-1.4	-1.0
Exports (goods and services)	26.3	25.5	25.5	25.5	25.7
Imports (goods and services)	-37.8	-35.9	-34.3	-32.8	-32.5
External public debt1	26.3	30.4	32.8	32.1	32.7
External public debt service (percent of exports)1	7.7	10.0	14.8	15.0	8.1
Domestic public debt2	42.3	41.7	37.5	36.6	34.3
Total public debt3	68.6	72.1	70.2	68.7	66.9
Total public debt (excluding SOEs)4	67.3	71.2	69.6	68.2	66.6
Present value of total public debt3	62.3	63.2	60.0	57.0	54.0
Sources: Togolese authorities and IMF staff estimates and projections.
1 Includes state-owned enterprise external debt.
2 Includes domestic arrears and state-owned enterprise domestic debt.
3 Includes domestic arrears and state-owned enterprise debt.
4 Includes domestic arrears.

https://www.imf.org/en/News/Articles/2025/06/30/pr25229-togo-imf-completes-the-second-review-under-the-ecf-arrangement-for-togo

MIL OSI