IMF deal offers mixed Ghana economic outlook

2015 ◽  
Keyword(s):  
Commodity Price ◽  
Fiscal Deficit ◽  
Structural Constraints ◽  
Fiscal Consolidation ◽  
Content Type ◽  
Social Pressures ◽  
2016 Election ◽  
The Government ◽  
Economic Outlook ◽  
The Imf

Subject Ghana economic outlook. Significance The government has presented a revised 2015 budget that lowers the growth target from 3.9% to 3.5%. The fiscal deficit target has been widened from 6.5% of GDP to 7.3%. The downward revisions underline the economy's structural constraints, which the IMF financial bailout deal will not overcome. Despite a promising start on fiscal consolidation, the economy continues to be plagued by the effects of commodity price dependence. Impacts The recent reduction in fuel and utility subsidies has been made easier given lower oil and product prices. However, social pressures will build around the 2016 election, potentially spurring policy reversals. Negotiations moderating spending in next year's budget will be tougher, especially on wages.

External factors will shape Uganda's near-term growth

2016 ◽  
Keyword(s):  
International Markets ◽  
Infrastructure Investment ◽  
Public Infrastructure ◽  
Content Type ◽  
Banking Regulations ◽  
2016 Election ◽  
Near Term ◽  
The Government ◽  
Will Force ◽  
Economic Outlook

Subject Ugandan economic outlook. Significance Despite having overcome the 2016 election with relatively little economic turbulence, Uganda's growth has since failed to accelerate despite monetary easing. The economy is still vulnerable to external economic shocks. The government is investing in public infrastructure to reduce this weakness in the longer-term. Impacts Selecting, sequencing and implementing choices of large projects will determine the success of public infrastructure investment. Insufficient increases in tax collection will force the government to borrow more from domestic and international markets. Kenya's experience with a new interest rate cap law could influence Uganda's banking regulations.

Oman's fiscal woes could endanger the currency peg

2016 ◽  
Keyword(s):  
Oil Prices ◽  
Government Policies ◽  
Fiscal Deficit ◽  
Content Type ◽  
Economic Decisions ◽  
The Government ◽  
Economic Outlook ◽  
Patronage System ◽  
Local Firms

Subject Oman's economic outlook. Significance Oman faces a massive fiscal deficit in 2016, which government policies are unable to address. The budgetary shortfall in the first seven months of 2016 reached 4 billion Omani riyals (10 billion dollars), outstripping the projected full-year deficit of 3.3 billion riyals. Low oil prices have pushed down revenue, while the government struggles to control spending. Impacts A requirement to employ more Omanis will reduce the competitiveness of local firms. Popular resentment against expatriate workers (who constitute 40% of the population) is likely to rise. The government may curb some elite corruption and excess consumption, but the patronage system will remain entrenched. While 75-year-old Sultan Qaboos is popular, his successor will face difficult economic decisions, increasing the chances of serious unrest.

Risks of widespread protests will endure in Costa Rica

2020 ◽  
Keyword(s):  
Costa Rica ◽  
Credit Rating ◽  
Fiscal Deficit ◽  
International Capital ◽  
Tax Reforms ◽  
Fiscal Reform ◽  
Content Type ◽  
The Government ◽  
The Imf

Significance The move followed days of protests in response to plans for tax reforms designed to rein in the country’s burgeoning fiscal deficit. Impacts Protests will almost certainly return if the national dialogue is viewed as unsuccessful. The suspension of the IMF talks will encourage the government to look to other multilateral organisations for loans or aid. A lack of fiscal reform may weigh on Costa Rica’s credit rating, reducing its ability to raise international capital.

Zambia's new mining tax regime could backfire

2015 ◽  
Keyword(s):  
Underground Mines ◽  
Open Pit ◽  
Election Campaign ◽  
Fiscal Consolidation ◽  
Corporate Tax ◽  
Open Pit Mines ◽  
Content Type ◽  
The Government ◽  
The Imf

Significance The new rules remove corporate tax, but hike mining royalties to 20% for open pit mines (up from 6%), and 8% for underground mines (also up from 6%). Some flexibility in the payments schedule may be permitted. Impacts The collapse of the opposition MMD's support base means business lobby funding and support is likely to shift to Hakainde Hichilema's party. Following his declared support for the PF, Rupiah Banda's moderating influence on party policy may be limited by his outsider status. The IMF will be wary of confirming a fiscal consolidation programme, given the president's short tenure and his populist platform. Lower fiscal revenues from mining may push the government to borrow further to meet its election campaign promises.

Costa Rica tax triumph will drive Alvarado’s ambition

2018 ◽  
Keyword(s):  
International Institutions ◽  
Tax Reform ◽  
Infrastructure Investment ◽  
Fiscal Deficit ◽  
Fiscal Consolidation ◽  
Public Infrastructure ◽  
Content Type ◽  
Investment Plan ◽  
Fiscal Reforms ◽  
The Government

Subject Tax reform. Significance President Carlos Alvarado's controversial and long-awaited tax reform passed on December 3. The new measures should help to improve Costa Rica’s fiscal situation, particularly curbing the widening fiscal deficit, and will be welcomed by investors and international institutions. Impacts With the reforms now looking certain, protest fatigue will set in, and union demonstrations will die down. The legislature is likely to rally behind Alvarado’s next initiative -- a public infrastructure investment plan. The government may try to pass supplementary fiscal reforms in 2019 to support fiscal consolidation.

Problems lie ahead as economy softens in Uruguay

2018 ◽  
Keyword(s):  
Policy Making ◽  
The Other ◽  
The Political ◽  
Fiscal Deficit ◽  
Poor Growth ◽  
Content Type ◽  
General Elections ◽  
Growth Prospects ◽  
The Government ◽  
Economic Outlook

Subject The political and economic outlook. Significance The government is under increasing pressure over growing crime concerns and dissatisfaction with the economic situation, but deteriorating fiscal accounts limit its options. The worsening image of President Tabare Vazquez and the other two leaders of the governing Frente Amplio (FA) points to an unfavourable outlook for the FA coming into the 2019 general elections. Impacts Rising unemployment may increase mounting crime and security fears. The stubborn fiscal deficit and heavy tax burden will complicate policy-making for this government and its successor. Poor growth prospects in Argentina and Brazil will dim the outlook for Uruguay’s trade and tourism.

Contagion concerns worsen Uruguay's economic outlook

2018 ◽  
Keyword(s):  
Financial Crisis ◽  
Economic Downturn ◽  
Purchasing Power ◽  
Fiscal Deficit ◽  
Content Type ◽  
The Government ◽  
Economic Outlook

Significance The Argentine financial crisis and economic downturn are affecting Uruguay at a time when its economy is cooling while popular discontent is rising over the difficulty of finding employment and maintaining purchasing power, as well as increased crime concerns. President Tabare Vazquez’s approval continues to fall. The governing Frente Amplio (FA)’s chances of retaining power after the October 2019 elections are declining. Impacts Difficulties in Uruguay’s two largest neighbours will weigh heavily on the economy in coming months. The FA is likely to lose power in 2019 after 15 years in the presidency. The substantial fiscal deficit gives the government no option to try to boost growth and consumption through stimulus.

Saudi subsidy reforms unlikely to spark major protests

2016 ◽  
Keyword(s):  
Fuel Oil ◽  
Basic Part ◽  
Content Type ◽  
The Social ◽  
Political Impact ◽  
The Face ◽  
The Government ◽  
Crown Prince ◽  
Economic Outlook

Subject Political impact of subsidy reform. Significance Saudi Arabia introduced its first major cut to energy subsidies in January, leading to a rise in petrol, diesel, fuel oil, natural gas and electricity prices. Further cuts will be necessary to avert a fiscal crisis -- but with cheap energy seen as a basic part of the social contract between the government and the population, such measures are expected to have wide-reaching political repercussions. Impacts A decision to reverse subsidy cuts in the face of protest would undercut government credibility and reduce the prospect of further reforms. Yet persisting with subsidy reforms could damage government legitimacy and political capital among the youth and lower classes. Successful reforms will improve the long-term economic outlook, and the succession prospects of Deputy Crown Prince Mohammed bin Salman.

Ghana's IMF bailout to persist despite souring ties

2016 ◽  
Keyword(s):  
Central Bank ◽  
Budget Deficit ◽  
Credit Rating ◽  
Gdp Growth ◽  
Content Type ◽  
Bank Financing ◽  
Electricity Crisis ◽  
Manufacturing Activity ◽  
The Government ◽  
The Imf

Significance Earlier this month, the government passed a bill allowing for central bank financing of the budget deficit, contravening a core requirement in its agreement with the Fund. Earlier breaches led to the fourth tranche of the bailout (worth 114 million dollars) being withheld. Impacts Other donors will withhold aid disbursements until the impasse between Accra and the IMF is resolved. The electricity crisis will continue to undermine manufacturing activity, contributing to disappointing GDP growth. Ivory Coast's pro-business reforms mean it could attract investors deterred by Ghana's economic woes. Prolonged tensions with the IMF coupled with a deterioration its Ghana's fiscal metrics may drive a credit rating downgrade.

Uruguay's economy will avoid recession, narrowly

2016 ◽  
Keyword(s):  
Economic Growth ◽  
Content Type ◽  
Near Term ◽  
The Government ◽  
Foreign Ministers ◽  
Cellulose Plant ◽  
Economic Outlook

Subject The near-term economic outlook. Significance The statist model preferred by the governing Frente Amplio (FA) coalition clashes with the plan designed by President Tabare Vazquez and his economy and foreign ministers, Danilo Astori and Rodolfo Nin Novoa respectively, to try to attract greater inward investment. This adds to intra-coalition tensions after the defection of a centre-left legislator caused the government to lose its congressional majority. Impacts The fear of losing support may help to concentrate FA minds on smoothing over party splits. A new cellulose plant would boost economic growth but not diversification. The economy will avoid recession, but growth will not pick up strongly in the near term.

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