2013年-IMF国际货币组织全球_Republic_of_Kosovo_Fourth_Review_Under_the_Stand_44页_845kb

Summary of the Fourth Review Under the Stand-By Arrangement for the Republic of Kosovo

Core Content

The Fourth Review Under the Stand-By Arrangement (SBA) for the Republic of Kosovo was completed on June 28, 2013. The SBA, approved on April 27, 2012, has a total amount of SDR 90.968 million (154.2% of quota), and the fourth purchase of SDR 4.251 million was made available upon completion of the third review on April 24, 2013, but the authorities did not draw it, in line with their intention to treat the SBA as precautionary in 2013.

The staff report highlights that all quantitative performance criteria and most structural benchmarks were met by end-April 2013. The only missed targets were the indicative targets on the non-accumulation of domestic payments arrears, which the authorities are taking corrective actions to address.

The economy showed some improvement in the first quarter of 2013 but faced a slowdown in April and May. Headline inflation decelerated to 2.2% at end-May, and core inflation remained contained at slightly above 2%. The banking sector indicators remained largely unchanged, with non-performing loans at 7.7% and capital adequacy ratio (CAR) close to 15%, above the regulatory minimum of 12%.

Main Views

• Fiscal Policy:

  • The 2013 budget implementation was broadly in line with the program.
  • The government exceeded the primary fiscal balance floor by €45 million and the bank balance floor by €72 million.
  • The early-year revenue shortfall was partially compensated by higher domestic tax collection and earlier-than-expected PTK dividends.
  • A rules-based fiscal framework is expected to be enacted in early July 2013, which will anchor fiscal policy from 2014.
  • The 2014 budget parameters were agreed upon, with a ceiling on current spending and a limit on domestic debt issuance.
  • The authorities are expected to maintain expenditure discipline and take corrective actions if further revenue shortfalls occur.

• Financial Sector Policies:

  • Progress is being made in bringing banks into compliance with the new prudential rules under the Banking Law.
  • Recapitalization plans for small banks are on track, and the CBK will conduct on-site inspections to verify compliance.
  • The CBK has taken steps to protect its balance sheet by amending the tri-partite Memorandum of Understanding (MOU) on Financial Stability Cooperation.
  • The CBK is planning to strengthen the crisis management framework, move to more risk-based supervision, and develop a macro-prudential policy framework.
  • Key FSAP recommendations are being implemented, with some requiring technical assistance.

• Competitiveness and Private Sector Development:

  • A rules-based framework for setting minimum wage levels is expected to be finalized by end-August 2013.
  • The framework ties minimum wage increases to core inflation and average wages.
  • Support schemes for small- and medium-sized enterprises (SMEs) are progressing in cooperation with foreign donors.

Key Information

• Program Status:

  • All quantitative performance criteria and most structural benchmarks were met.
  • The authorities have agreed to the publication of the staff report.

• Purchase Decision:

  • The authorities decided not to draw the fourth SBA purchase, as the SBA is treated as precautionary for 2013.

• Performance Criteria and Structural Conditionality:

  • Quantitative Performance Criteria:

    • Floor on the government bank balance: 160 million EUR
    • Floor on the primary fiscal balance: -37 million EUR
    • Ceiling on primary expenditures: 448 million EUR
    • Ceiling on net contracting of nonconcessional debt: 150 million EUR

  • Quantitative Indicative Targets:

    • Ceiling on domestic payment arrears for the central and general governments.

  • Structural Benchmarks:

    • Issuance of an administrative instruction for a rules-based minimum wage framework by end-August 2013.
    • Submission of a 2014 budget consistent with the Letter of Intent parameters by end-October 2013.
    • Monthly meetings of the Program Monitoring Committee and transmission of minutes to the IMF Resident Representative.
    • Fiscal impact assessments for all new benefit-creating laws and amendments over a five-year period.

Risks and Challenges

• The main risk to the program remains the fragile political environment and the potential for populist policies.
• The 2013 local elections and 2014 national elections may pose challenges to maintaining macroeconomic stability.
• The government must continue to implement fiscal discipline and ensure that social spending initiatives are properly costed and prepared to avoid unfunded obligations.
• The completion of the PTK privatization transaction is crucial for restoring the government's bank balance and ensuring the adequacy of cash buffers.

Conclusion

The staff appraisal supports the authorities' request for completion of the fourth review, recognizing the progress made in fiscal and financial policy reforms. The program provides a solid foundation for steering Kosovo's economy through the period ahead, fostering confidence in macroeconomic management, and laying the groundwork for sustainable and balanced growth. The next steps include the implementation of the rules-based fiscal framework, the submission of the 2014 budget, and the strengthening of the financial sector and public finances.