2012年-IMF国际货币组织全球_Iceland_Second_Post_49页_1mb

Summary of the Second Post-Program Monitoring Discussions with Iceland (November 2012)

Core Content

The Second Post-Program Monitoring Discussions with Iceland, held in November 2012, focused on the country's economic recovery, external stability, and the risks associated with capital account liberalization and fiscal consolidation. The discussions were based on the Staff Report, Public Information Notice (PIN), and the Statement by the Executive Director for Iceland, all of which emphasized the importance of maintaining macroeconomic stability and preparing for the gradual opening of the capital account.

Main Issues and Key Points

A. Economic Recovery and Outlook

• Growth: Iceland's recovery is taking root, with growth expected to remain steady at 2.6% in 2012 and moderate thereafter. The output gap, which was significant, is now largely closed.
• Unemployment: Unemployment has declined to 6% in September 2012 from a peak of 9.2% in 2010, but long-term unemployment remains a challenge.
• Inflation: Inflation has eased slightly but remains above the Central Bank of Iceland (CBI) target of 2.5%. Inflation expectations are still high, and wage growth continues to exert upward pressure on prices.
• Financial Sector: Banks are well-capitalized, liquid, and profitable, with two of the three major banks issuing covered bonds. The stock market has shown improvement, and real estate prices are rising in line with disposable income.

B. Fiscal Consolidation

• Progress: Fiscal consolidation is broadly on track, with the 2013 budget expected to offset more than half of the past fiscal slippages, bringing the 2014 target within reach.
• Risks: Political headwinds and implementation risks remain due to upcoming parliamentary elections and potential delays in key measures. Contingency planning is necessary to address these risks.
• Reforms: The draft organic budget law aims to improve budget procedures, broaden fiscal reporting, and increase government accountability.

C. Capital Account Liberalization

• Strategy: The capital account liberalization strategy consists of two phases. Phase one involves reducing offshore krona holdings through auctions, Eurobond conversions, and an exit levy. Phase two involves gradual removal of capital controls.
• Challenges: Progress in reducing offshore krona has been slow. Incentives for offshore krona holders to participate in the strategy need to be strengthened.
• Risks of Premature Liberalization: A premature lifting of capital controls could lead to disorderly capital outflows, inflationary pressures, and increased private sector debt, which could undermine financial stability and growth.

D. Monetary Policy

• Inflation Target: The CBI has increased policy rates to 5.75% by mid-2012, but further tightening is needed to bring inflation down to the target of 2.5% by mid-2015.
• Monetary Transmission: The transmission mechanism remains weak, with banks holding large excess reserves. The CBI is increasing CD issuance to improve liquidity management.
• Policy Recommendations: Staff recommended maintaining a tightening bias, improving liquidity management, and ensuring that short-term interest rates are aligned with the policy corridor.

E. Financial Sector Vulnerabilities

• Legacy Risks: Banks still face liquidity, foreign currency, and provisioning risks. Their reliance on captive deposits and asset-liability mismatches remains a concern.
• Capital Buffers: Maintaining large capital buffers through periodic supervisory reviews is essential to safeguard financial stability.
• HFF Situation: The Iceland Financial Supervisory Authority (HFF) has a deteriorating financial position due to a large negative carry on its balance sheet.

Key Information

• Capital Controls: The lifting of capital controls is expected to be phased and contingent on the reduction of offshore krona holdings. Staff emphasized the need for a well-sequenced strategy to avoid destabilizing the balance of payments.
• Debt Sustainability: Public and external debt ratios are projected to continue declining, even under stress scenarios, though they remain high.
• Fiscal and Monetary Coordination: Fiscal consolidation and monetary tightening are seen as complementary to support the liberalization of capital controls and maintain market access.
• Legal and Structural Reforms: The new fisheries laws aim to improve the taxation of the fisheries sector and restructure the quota system to better align with social and regional development goals.

Conclusion

The discussions underscored the importance of maintaining fiscal discipline, tightening monetary policy, and managing the risks associated with capital account liberalization. While Iceland's recovery is on track, continued vigilance and coordinated policy efforts are necessary to ensure long-term stability and sustainable growth.