Côte d’Ivoire: IMF stresses fiscal discipline to keep Ivorian economy buoyant

Abidjan, Côte d’Ivoire (PANA) - Sustaining Côte d’Ivoire's currently strong economic performance will require maintaining a disciplined fiscal policy, an International Monetary Fund (IMF) staff team has recommended at the end of a two-week visit to Abidjan.

In addition, the team has suggested, as another requirement, increasing banks’ capital in order to build sufficient buffers to allow for the conduct of counter-cyclical policy in the event of the materialization of these risks, as well as to preserve debt sustainability.

“Over the past four years economic performance under the authorities’ programme, supported by an (IMF) Arrangement under the Extended Credit Facility, has been impressive," said mission leader Dan Ghura in a statement made available to PANA on Wednesday. "GDP growth has been robust, permitting a decline in poverty, and macroeconomic imbalances have been curtailed."

"Our preliminary estimates indicate that real GDP growth was 8.6 percent, while inflation remained subdued. An external current account deficit was registered, as the dynamism of imports more than compensated the increase in exports, but remained at a manageable 1.7 percent of GDP.

"The overall fiscal deficit was 3.0 percent of GDP compared to a target of 3.7 percent in the revised 2015 Budget Law, mainly due to under-execution of capital expenditures and higher-than-budgeted proceeds from the sale of telecom licences," the IMF official added.

Against the backdrop of accommodating financing conditions and rising business and consumer confidence, the IMF mission found that bank credit to the Ivorian private sector accelerated in 2015, after strong increases the two preceding years, contributing to a decline in overall banks’ capital adequacy ratio.

Expressing support to the broad objectives and reforms underlying the National Development Plan for 2016-20 (NDP) as well as the leading role of the private sector to foster structural transformation, the team said the macroeconomic outlook for 2016 and the medium term remained favorable. Real GDP growth is projected at 8.5 percent, with low inflation.

During their visit, the IMF team members made consultations with the government for the 2016 Article IV under the Fund's Articles of Agreement to collect economic and financial information, and discussed the country's economic developments and policies.

According to Mr. Ghura's statement, the mission made recommendations aimed at ensuring that the NDP can be implemented without disruption in the face of possible adverse shocks, including from international commodity prices and tighter financing conditions.

Also, the mission highlighted the importance of increased revenue mobilization by rationalizing exemptions and broadening the tax base, continuing a prudent debt policy, and carefully monitoring of associated risks linked to public-private partnerships.

Mr. Ghura said the Executive Board of the IMF was expected to consider the staff report on Côte d’Ivoire in May 2016.

Ivorien authorities have requested the Fund support for a new programme, and Mr. Ghura said that discussions on that matter were planned for later this year.
-0- PANA AR/MA 16March2016

16 march 2016 09:24:48




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