Latest news with #ArticleIV
Business Insider
3 hours ago
- Business
- Business Insider
Tanzania's policy reforms unlock $448.4 million IMF support package
The International Monetary Fund (IMF) has approved a total disbursement of about $448.4 million to Tanzania following the completion of reviews under two key lending arrangements, in recognition of the country's continued economic improvement and reform progress. The IMF approved a $448.4 million disbursement to Tanzania under key lending arrangements due to economic improvements. Tanzania's economic indicators show positive trends, including a GDP growth rate projected to reach 6.0% in 2025. Tanzania's achievements under the ECF and RSF included meeting all quantitative criteria and most structural benchmarks. The $448.4 million disbursement follows the successful completion of reviews under two key lending programmes and signals the IMF's confidence in Tanzania's macroeconomic policies and ongoing structural reforms. The IMF Executive Board on Friday concluded the 2025 Article IV consultation and completed the fifth review under the Extended Credit Facility (ECF) arrangement, as well as the second review under the Resilience and Sustainability Facility (RSF). The move allows for an immediate disbursement of about $448.4 million (SDR 326.47 million) to Tanzania under both arrangements. The completion of the fifth review under the ECF enables the release of $155.7 million (SDR 113.37 million), representing 28.5% of the country's IMF quota. This brings Tanzania's total access under the ECF arrangement to approximately $908.3 million. Under the RSF, the completed second review unlocks $292.7 million (SDR 213.1 million), equivalent to 53.5% of quota, raising total access under this facility to around $345.4 million. The IMF said Tanzania's macroeconomic indicators have continued to improve. Real GDP growth reached 5.5% in 2024 and is projected to rise to 6.0% in 2025. Medium-term growth is forecast at 6.5%, contingent on sustained reform implementation. Inflation remained steady at 3.2% year-on-year in April 2025, staying below the central bank's target. The current account deficit narrowed to 2.6% of GDP in 2024, down from 3.8% the previous year, supported by a robust export performance. The IMF also noted that the authorities maintained a neutral or mildly stimulative monetary policy stance, alongside increased exchange rate flexibility. Tanzania's banking sector remains resilient, although the Fund warned that some vulnerabilities persist. The fiscal balance weakened markedly in the third quarter of the 2024/25 fiscal year, prompting the government to delay lower-priority spending in the final quarter. Continued reform commitment and risk outlook All quantitative performance criteria and indicative targets for end-December 2024 under the ECF and RSF were met. While two of three structural benchmarks for end-March 2025 were implemented, albeit with delays, the implementation of the Secured Transaction Act remains pending and has now been rescheduled for end-February 2026. Looking ahead, the IMF warned that while economic conditions are expected to remain favorable, risks are tilted to the downside. The Tanzanian authorities reaffirmed their commitment to reforms aimed at maintaining macro-financial stability, promoting inclusive and sustainable growth, advancing structural changes, and addressing climate-related challenges.
Saudi Gazette
a day ago
- Business
- Saudi Gazette
IMF praises Saudi economic resilience, inflation control, and Vision progress
Saudi Gazette report RIYADH — The Ministry of Finance has welcomed the Concluding Statement issued by the International Monetary Fund (IMF) following the completion of its 2025 Article IV Consultation with the Kingdom. The statement highlighted the resilience of Saudi Arabia's economy amid global uncertainty, driven by robust non-oil sector growth, low inflation, and record-low unemployment, all aligned with the strategic goals of Vision 2030. In a press release, the ministry noted the IMF's commendation of the Saudi government's efforts to reinforce fiscal sustainability and its ability to absorb economic shocks. The experts observed that strong domestic demand continues to fuel economic momentum despite global headwinds, reflecting the effectiveness of major Vision 2030 projects supported by both public and private investments. The IMF experts highlighted the Kingdom's success in containing inflation, which stood at 2.3% in April 2025, and is expected to remain near 2%. This stability is underpinned by several factors, including the riyal's peg to the US dollar, supportive government policies, lower transportation and communication costs, and a cooling of residential rent inflation. Imported inflation, largely stemming from global tariff increases, remains under control. The report also praised the Saudi Central Bank (SAMA) for enhancing its liquidity management framework, noting its role in maintaining stable monetary conditions. The experts acknowledged SAMA's continuous efforts to improve regulatory and supervisory mechanisms and further strengthen oversight in the financial sector. A key focus of the statement was the Kingdom's reform trajectory since 2016. The IMF noted the wide-ranging progress in business regulation, governance, labor markets, and capital market reforms. It cited new regulations enacted in 2025, including an updated investment law, labor law amendments, and a modernized commercial registration system. These initiatives are expected to enhance investor confidence, stimulate productivity, and support sustained non-oil sector growth. The IMF stressed the need for continued fiscal reform and a strong medium-term fiscal framework to maintain the sustainability of public finances and achieve Vision 2030's long-term objectives. The Concluding Statement represents the preliminary findings of the IMF mission and forms part of its annual economic consultations with member countries under Article IV of the IMF's Articles of Agreement. These consultations aim to assess economic developments, policy directions, and structural reforms. The Ministry of Finance reaffirmed its commitment to working closely with the IMF and other international institutions to ensure economic resilience, strengthen fiscal governance, and continue progress on structural reforms in support of the Kingdom's long-term development vision.
The Star
a day ago
- Business
- The Star
Global uncertainty weighs on Vietnam's economic outlook
Dragon fruit prepared for export in Bình Thuan Province. Vietnam's economic outlook is heavily dependent on the outcome of trade negotiations. — VNA/VNS HANOI: Vietnam's economic outlook is heavily dependent on the outcome of trade negotiations and is constrained by elevated global uncertainty on trade policies and economic growth, according to an International Monetary Fund (IMF) team led by Paulo Medas. The team has concluded discussions for the 2025 Article IV consultation with Vietnamese authorities from June 11 to 24. According to the IMF team, high tariffs will likely take effect in the third quarter. In such a scenario, economic growth is projected to slow to 5.4 per cent in 2025 and decelerate further in 2026. However, if global trade tensions subside, the economic outlook would improve significantly. 'Downside risks are high. A further escalation in global trade tensions or a tightening of global financial conditions could weaken further exports and investment,' Paulo said. Domestically, financial stress could re-emerge from tighter financial conditions and high corporate indebtedness, he added. On the upside, achieving non-discriminatory trade agreements and successfully implementing planned infrastructure and structural reforms could significantly boost medium-term growth. 'Given the uncertain outlook, policy priorities should focus on preserving macro-financial stability while navigating economic adjustments. Fiscal policy, supported by a low level of public debt, should take the lead in cushioning the near-term impact, especially under downside scenarios. Accelerated implementation of public investment and strengthening social safety nets would be important,' he stressed. He pointed out that monetary policy has much more limited room and should be decisively focused on anchoring inflation expectations. Allowing the exchange rate flexibility will be critical as the economy adjusts to the external shock. Some monetary easing could be considered if global interest rates decline as expected and inflation falls. Vigilance is needed to monitor and act against inflation pressures that may arise, including due to external shocks. These challenges underscore the importance of modernising the monetary policy framework to enhance its effectiveness and anchor stability, including by replacing credit growth limits with an improved prudential framework. 'Further efforts are needed to strengthen financial sector soundness. To bolster banking system resilience, priorities include strengthening bank supervision, build liquidity and capital buffers, and further improving the bank resolution framework,' he said. 'The Government's plans for an ambitious reform agenda are very welcome and could boost medium-term growth, but implementation will be key.' — Vietnam News/ANN
Saudi Gazette
2 days ago
- Business
- Saudi Gazette
Saudi economy demonstrates strong resilient to global shocks; IMF asserts
WASHINGTON — Saudi Arabia's economy has demonstrated strong resilience to global economic shocks, with non-oil activities expanding, inflation contained, and unemployment reaching record-low levels, according to the International Monetary Fund (IMF). These developments are in line with the targets of Vision 2030, the IMF said in its 2025 Article IV Concluding Statement. This statement was issued by IMF staff following their visit to discuss the Kingdom's 2025 Article IV consultations. The Saudi Ministry of Finance welcomed the IMF statement, which remarked that 'given the current heightened global uncertainty, continued efforts on structural reform are essential to sustain non-oil growth and drive economic diversification.' The IMF staff praised the government's efforts to strengthen the sustainability and resilience of public finances. Inflation remained contained, edging up slightly to 2.3 percent in April 2025, with expectations that it will stay anchored around 2 percent. The statement noted that inflation is contained as rent inflation decelerated. Despite a small pick-up to 2.3 percent in April 2025, headline inflation remains low, helped by high real interest rates. Declining prices for transport and communication helped offset housing rent inflation. The IMF attributed price stability to the credible SR-US dollar peg, continued domestic subsidies, declining transport and communication costs, and a sustained slowdown in housing rent inflation. Imported inflation linked to higher global tariffs is expected to remain under control. Despite elevated global uncertainty, strong domestic demand continues to support economic growth, reflecting ongoing implementation of Vision 2030 projects through public and private investment and buoyed by robust credit growth. 'Robust domestic demand—including from government-led projects—will continue to drive growth despite heightened global uncertainty and a weakened commodity price outlook. Non-oil real GDP growth is projected at 3.4 percent in 2025, about 0.8 percentage points lower than in 2024,' the statement said while noting that this reflects the continued implementation of Vision 2030 projects through public and private investment, as well as strong credit growth, which would help sustain domestic demand and mitigate the impact of lower oil prices. The IMF commended the Saudi Central Bank (SAMA) for enhancing its liquidity management framework and welcomed its ongoing efforts to strengthen regulatory and supervisory frameworks, which are key to preserving financial stability. The statement reviewed structural reforms undertaken since 2016. New legislation that came into effect in 2025, including the updated Investment Law, amendments to the Labor Law, and the new Commercial Registration Law, is expected to boost contractual certainty, improve the business environment, raise investor confidence, and support productivity gains. The IMF emphasized the importance of sustaining reform momentum regardless of oil price trends. Strengthening fiscal institutions and prioritizing the medium-term fiscal framework are seen as essential to achieving Vision 2030 goals. The statement also noted that the banking sector remains resilient, with a capital adequacy ratio of 19.6 percent at the end of 2024. Despite higher funding costs, bank profitability remains strong, with average return on assets at 2.2 percent and non-performing loans at their lowest level since 2016. The statement highlighted that, in 2024, non-oil real GDP grew by 4.2 percent, primarily driven by private consumption and non-oil private investment, with retail, hospitality, and construction leading growth. Repeated extensions of the OPEC+ production cuts have kept oil output at 9 million barrels per day (mb/d)—the lowest level since 2011— resulting in a 4.4 percent decline in oil GDP and an overall real growth rate of 1.8 percent. The composite PMI indicates sustained activity in Q1 2025, with the latest Q1 GDP estimate showing non-oil activities expanding by 4.9 percent year-on-year The IMF observed that the labor market's strong momentum would continue. The unemployment rate for Saudi nationals has declined to a record low of 7 percent in 2024, surpassing the original Vision 2030 target, which has now been revised down to 5 percent. The improvement is broad-based, with both youth and female unemployment halved over a four-year period. Private sector employment surged by 12 percent on average in 2024, while public sector hiring continued to slow, reflecting a redeployment to non-government entities.
Fibre2Fashion
3 days ago
- Business
- Fibre2Fashion
Vietnam's GDP growth projected to slow to 5.4% in 2025: IMF
Assuming that high US tariffs take effect in the third quarter (Q3) this year, economic growth in Vietnam is projected to slow to 5.4 per cent in 2025 and decelerate further in 2026, according to the International Monetary Fund (IMF). However, if global trade tensions subside, the economic outlook would significantly improve, the IMF said after one of its teams recently concluded the 2025 Article IV consultation with Vietnamese authorities. Assuming that high US tariffs take effect in Q3 2025, Vietnam's GDP growth may slow to 5.4 per cent this year and drop further in 2026, the IMF said. If global trade tensions subside, the outlook would significantly improve. “The outlook is heavily dependent on the outcome of trade negotiations and is constrained by elevated global uncertainty on trade policies and economic growth,†it noted. 'The outlook is heavily dependent on the outcome of trade negotiations and is constrained by elevated global uncertainty on trade policies and economic growth,' the IMF team leader Paulo Medas noted. 'Downside risks are high. A further escalation in global trade tensions or a tightening of global financial conditions could weaken further exports and investment. Domestically, financial stress could re-emerge from tighter financial conditions and high corporate indebtedness,' he said. 'On the upside, achieving non-discriminatory trade agreements and successfully implementing planned infrastructure and structural reforms could significantly boost medium-term growth,' he said. 'Given the uncertain outlook, policy priorities should focus on preserving macro-financial stability while navigating economic adjustments. Fiscal policy, supported by low level of public debt, should take the lead in cushioning the near-term impact, especially under downside scenarios. Accelerated implementation of public investment and strengthening social safety nets would be important,' medas observed. 'Monetary policy has much more limited room and should be decisively focused on anchoring inflation expectations. Allowing the exchange rate flexibility will be critical as the economy adjusts to the external shock. Some monetary easing could be considered if global interest rates decline as expected and inflation falls,' he noted. 'Further efforts are needed to strengthen financial sector soundness. To bolster banking system resilience, priorities include strengthening bank supervision, build liquidity and capital buffers, and further improving the bank resolution framework,' he added. Fibre2Fashion News Desk (DS)
