2012年-IMF国际货币组织全球_Kenya_Fourth_Review_Under_the_Three_53页_1mb

Summary of Kenya's Fourth Review Under the Three-Year Arrangement Under the Extended Credit Facility

Core Content

This document outlines the fourth review under Kenya's three-year Extended Credit Facility (ECF) arrangement, which was approved in January 2011 and augmented in December 2011. The review includes a request for a waiver and modification of performance criteria due to the emergence of temporary technical arrears on external debt, which were fully repaid. The report covers macroeconomic developments, program implementation, policy discussions, and risks to the economic outlook.

Main Views and Key Information

Macroeconomic Outlook and Program Implementation

• Economic Growth: Economic activity rebounded in FY 2011/12 after a slowdown, driven by improved weather conditions and macroeconomic stability. Growth is projected to remain around 5%.
• Inflation: Inflation declined to 5.3% (y-o-y) in September 2012, well within the target range (5 ± 2.5%). The decline was primarily due to monetary policy, although supply factors (e.g., large food harvests) also contributed.
• External Position: International reserves rose to above US$5 billion (3.6 months of imports), and the current account deficit widened in 2011/12 mainly due to oil imports but is expected to narrow.
• Monetary Policy: The Central Bank of Kenya (CBK) reduced its policy rate from 16.5% to 13% in September 2012. It has maintained Net Domestic Assets (NDA) below the program ceiling and Net International Reserves (NIR) above the floor.
• Fiscal Policy: The primary fiscal deficit for FY 2011/12 was 2.2% of GDP, in line with program targets. The government debt-to-GDP ratio was brought below 45%, and fiscal discipline was maintained despite revenue shortfalls.
• Structural Reforms: The Public Finance Management (PFM) Act was approved, introducing a Single Treasury Account to enhance transparency. A new civil servants pension reform is also in the pipeline.

Policy Discussions and Risks

• Inflation Targeting: Progress toward price stability has created space for gradual monetary easing. The CBK plans to reduce the policy rate cautiously, waiting for two monthly CPI readings to ensure the disinflation trend continues.
• Fiscal Consolidation: The government aims to reduce the primary fiscal deficit to 1.3% of GDP by end FY 2014/15. It plans to offset revenue shortfalls with expenditure cuts and reallocation, particularly in the education and health sectors.
• Fiscal Risks: Political and security risks, especially in the run-up to the 2013 elections, could compromise support for the program. A protracted intervention in Somalia and unforeseen complications in fiscal decentralization may also affect the fiscal outlook.
• Global Economic Risks: Risks to the external outlook are linked to global economic conditions, particularly the European debt crisis. A slowdown in Europe could impact non-traditional agricultural exports, tourism, and remittances. However, Kenya's maize stock levels have reduced its vulnerability to food inflation.
• Financial Sector: Banks have improved solvency and liquidity due to slower credit growth. The CBK is upgrading financial regulations to align with international standards. Financial market reforms are expected to deepen markets and attract new investors.

Program Issues and Staff Appraisal

• Waiver and Modification Request: The staff recommends a waiver for the temporary external debt arrears and a modification of performance criteria and indicative targets for the next 12 months, taking into account the revised macroeconomic outlook.
• Target Adjustments: The NIR and NDA targets for December 2012 and June 2013 need to be revised to account for higher currency demand as elections approach. The fiscal primary balance target has been adjusted to reflect new estimates of election-related outlays.
• Program Continuity: The direction of macroeconomic policies under the ECF program has not changed. The terms of performance criteria have been redefined to allow the government to settle obligations within 30 days of liabilities emerging, in line with international practices.

Key Figures and Tables

• Figure 1: Growth and Inflation – shows a rebound in economic activity and a decline in inflation.
• Figure 2: Credit and NIR – illustrates the CBK's efforts to build reserves despite a large current account deficit.
• Figure 3: Disinflation Drivers – highlights the role of monetary policy in reducing inflation.
• Figure 4: Yield Curve and Interest Rates – shows a shift in the yield curve and widening gaps between central bank and interbank rates.
• Figure 5: Capital Inflows and Exchange Rate Developments – indicates a return to 2010 exchange rate levels.
• Figure 6: Fiscal Balances, Debt and Capital Expenditure – shows how expenditure control offset revenue shortfalls.
• Figure 7: Balance of Payments Developments – outlines the impact of global downturns on the external position.
• Figure 8: Impact Under Alternative Global Downturn Scenarios – presents two scenarios showing the effects of global economic shocks on the current account and reserves.
• Table 1: Impact of Revenue and Expenditure Measures – provides a detailed breakdown of revenue and expenditure changes for FY 2012/13.

Conclusion

The staff report concludes that Kenya has made significant progress in implementing the ECF program, with the primary fiscal deficit in line with targets and inflation well within the desired range. While risks remain, particularly from external shocks and political instability, the government's fiscal and structural reforms are on track. The Executive Board has approved the waiver and target modifications, reflecting confidence in the program's implementation and the government's ability to manage risks.