Cyprus : Third Review Under the Extended Arrangement Under the Extended Fund Facility and Request for Modification of Performance Criteria-Staff Report; Press Release; and Statement by the Executive Director.
Title:
Cyprus : Third Review Under the Extended Arrangement Under the Extended Fund Facility and Request for Modification of Performance Criteria-Staff Report; Press Release; and Statement by the Executive Director.
Author:
European Dept., International Monetary Fund.
ISBN:
9781484347843
Personal Author:
Physical Description:
1 online resource (130 pages)
Series:
IMF Staff Country Reports
Contents:
Cover -- CONTENTS -- BACKGROUND -- RECENT ECONOMIC DEVELOPMENTS -- MACROECONOMIC OUTLOOK -- POLICY DISCUSSIONS -- A. Financial Sector Policy-Addressing NPLs and Normalizing Payment Flows -- B. Fiscal Policy-Maintaining Fiscal Prudence -- C. Structural Fiscal Reforms-Stepping-Up the Reform Momentum -- PROGRAM MODALITIES AND FINANCING -- STAFF APPRAISAL -- BOXES -- 1. A Credit-less Recovery? -- 2. Cooperative Credit Sector Restructuring Strategy -- 3. Private Sector Debt Restructuring: Main Issues -- FIGURES -- 1. Recent Economic Developments -- 2. Labor Market -- 3. External Indicators -- 4. Recent Fiscal Developments -- 5. Financial Sector Developments -- 6. External Debt Sustainability: Bound Tests -- 7. Public Debt Sustainability Analysis: Risk Assessment -- 8. Public Debt Sustainability Analysis: Realism of Baseline Assumptions -- 9. Public Sector Debt Sustainability Analysis: Baseline Scenario -- 10. Public Debt Sustainability Analysis: Composition of Public Debt and Alternative Scenarios -- 11. Public Debt Sustainability Analysis: Stress Tests -- TABLES -- 1. Selected Economic Indicators, 2008-20 -- 2. Fiscal Developments and Projections, 2008-20 -- 3. Calculation of Gross Financing Requirements and Sources of Financing, 2013-17 -- 4. Balance of Payments, 2008-20 -- 5. External Financing Requirements and Sources, 2012-2020 -- 6. Monetary Survey, 2008-20 -- 7. Indicators of Fund Credit, 2010-20 -- 8. Schedule of Reviews and Purchases -- 9. External Debt Sustainability Framework, 2008-2020 -- 10. Restrictive Measures on Transactions -- 11. Selected Reforms: Measures Completed -- 12. MEFP Commitments -- 13. Conditionality for the Third Review -- APPENDIX -- 1. Letter of Intent -- Attachments -- 1. Memorandum of Economic and Financial Policies -- 2. Technical Memorandum of Understanding.
3. Memorandum of Understanding on Specific Economic Policy Conditionality (European Commission).
Abstract:
EXECUTIVE SUMMARYExtended Arrangement: On May 15, 2013, the Executive Board approved a three-yearExtended Arrangement under the Extended Fund Facility in the amount of SDR 891 million (563 percent of quota; about 1 billion). Three purchases of amounts equivalent to SDR 74.25 million (about 86 million) each have been made so far, and another purchase of the same amount is proposed to be released upon completion of the third review. The European Stability Mechanism has released 4.6 billion of 9 billion committed, with a disbursement of 150 million expected in early April.Recent Economic Developments: While deep, the 2013 recession was not as severe as anticipated. The adjustment is occurring through both quantities and prices, and signs of stabilization are emerging in the banking sector. However, the outlook remains challenging, with rising unemployment, falling credit, and increasing non-performing loans. In this context, growth projections remain unchanged, with a deep contraction expected in 2014 and a modest and credit-less recovery taking hold in mid-2015.Policy Implementation: The program remains on track. Fiscal targets were met with considerable margins, the coop sector was recapitalized, and additional relaxations of payment restrictions are being implemented. Delays in the implementation of structural reforms have recently been overcome. Looking forward, policies will need to focus on dealing with the high level of non-performing loans, further normalizing payment flows, maintaining fiscal prudence, and stepping up the implementation of the ambitious fiscal structural reform agenda. Risks to program implementation remain significant, including due to remaining financial sector vulnerabilities and diminished political support following the breakup of the governing coalition.
Local Note:
Electronic reproduction. Ann Arbor, Michigan : ProQuest Ebook Central, 2017. Available via World Wide Web. Access may be limited to ProQuest Ebook Central affiliated libraries.
Genre:
Electronic Access:
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