19 Two strengths, however, stand out in comparison with the other countries under review: for many, a history of relatively low inflation and moderate debt and debt-service ratios.Ī distinctive group of countries receiving IMF support for the first time were the Central European countries (Bulgaria, Czechoslovakia, Hungary, Poland, and Romania). Each of these first-time users had seen deteriorations in many economic indicators in the preceding three years: rising fiscal and current account deficits, depletion of reserves, and a dwindling of already low growth rates. Several Central American countries (El Salvador, Guatemala, and Honduras) approached the IMF in the wake of declining export prices and regional political turmoil. Like many countries with one previous program, some (Cameroon, Jordan, Trinidad and Tobago, and Venezuela) were suffering the direct or indirect effects of the fall in oil prices after 1986. The diversity of these countries was great. Just under half of the countries reviewed were undertaking adjustment programs supported by the IMF for the first time in the recent past. Nevertheless, the need for further adjustment was evident in unsustainable debt-service ratios, high and rising fiscal deficits, the edging up of inflation, and falling investment ratios.
On average, these countries had enjoyed a strong recovery of output. Four of the countries (the Congo, Egypt, Gabon, and Nigeria) had benefited from debt reschedulings, which, with sizable reductions in current account deficits, had permitted a rebuilding of reserves. On average, the previous arrangement had seen a creditable start on adjustment. This setback had made the stance of financial policies unsustainable and had brought to the fore the effects of structural weaknesses. Each of these countries had been affected by the drop in oil prices in the mid-1980s-either directly through export receipts or indirectly through close economic links with fuel exporters. The need for further debt relief was a key incentive for most of these countries to seek IMF support.Īnother six countries had had only one recent arrangement with the IMF, The programs reviewed for these countries were, therefore, a continuation of recently initiated adjustment efforts. But for most, adjustment had been slow, and although the three years preceding the arrangements under review had brought a measure of stability, the macroeconomic setting remained weak: primary fiscal deficits had improved but heavy debt-service burdens kept overall deficits high growth, investment, and savings, on average, had been stable but at low rates in many, inflation had increased sharply and, while reserves on average had been steady at about three months of imports, the external position in most had been supported by substantial debt relief and in some cases there was an increase in arrears.
A few of these, in particular Mexico, had begun to see the returns to previous policy changes. Almost half had had more than one arrangement with the IMF during the past decade. Despite the common adversity of the initial conditions, the countries under review were at varying stages of their adjustment and reform efforts.
0 kommentar(er)
