2012年-IMF国际货币组织全球_Republic_of_Latvia_Fifth_Review_Under_the_Stand_88页_1mb

Summary of the Republic of Latvia: Fifth Review Under the Stand-By Arrangement

Core Content

This document outlines the Fifth Review Under the Stand-By Arrangement (SBA) and the Financing Assurances Review for the Republic of Latvia, conducted by the International Monetary Fund (IMF) in December 2011. It also includes a request for a waiver of a nonobservance of a performance criterion due to an exchange restriction and a proposal for post-program monitoring.

Main Objectives and Achievements

• Exchange Rate Peg: Latvia has maintained the euro exchange rate peg despite early pressures.
• International Reserves: Reserves have recovered to pre-crisis levels.
• Fiscal Adjustment: A fiscal adjustment of approximately 15% of GDP has been achieved, significantly reducing the fiscal deficit from 9.7% of GDP in 2009 to 4% of GDP in 2011.
• Competitiveness: The real effective exchange rate has depreciated by 10% (CPI-based) and 22% (ULC-based), improving competitiveness.
• Banking Sector: Banks have returned to profitability, with a capital adequacy ratio of 17% (14% Tier 1), above the regulatory minimum of 8%.
• Program Completion: The program has largely met its performance criteria and indicative targets, with most structural benchmarks now fulfilled, except for the sale of the commercial part of the Mortgage and Land Bank (MLB), which is expected to be completed in 2012.

Key Economic Indicators

• GDP Growth: Projected at 4.5–5% in 2011, but expected to decline to 2.5% in 2012 due to external shocks.
• Unemployment: Remains high at 14.6% in 2011, with over half of the unemployed having been out of work for more than a year.
• Inflation: Peaked at 4.8% in May 2011 but is expected to decline to around 2.4% in 2012, supported by falling international food and energy prices.
• Current Account: Returned to a small deficit in mid-2011, but is expected to move back toward balance.
• External Debt: The external debt-to-GDP ratio has increased due to program disbursements and inflows of non-resident deposits, but is now declining.

Risks and Challenges

• Euro Area Crisis: Could increase capital outflows, reduce growth, and complicate access to international capital markets.
• Financial Stability: The sale of the commercial part of MLB and the nationalization of airBaltic pose risks, especially if the airline fails to return to profitability.
• Krajbanka Failure: Highlighted the need for improved financial supervision and crisis resolution mechanisms.
• Structural Reforms: Delays in implementing reforms, such as the Fiscal Discipline Law (FDL) and Medium-Term Budget Framework, due to political resistance and reform fatigue.
• Parliamentary Dynamics: The new coalition government has a tenuous majority, making it difficult to pass constitutional changes needed for structural reforms.

Policy Discussions

• 2012 Budget: Expected to reduce the fiscal deficit to 2.5% of GDP (ESA95) on a sustainable basis.
• Structural Reforms: Necessary to maintain competitiveness and reduce unemployment, especially as further wage and price adjustments are limited.
• MLB Restructuring: The sale of the commercial part of the bank is delayed but is expected to be completed in 2012.
• airBaltic: Requires further government support, despite previous losses and unaudited accounts.
• Post-Program Monitoring: Discussions were initiated to establish a framework for ongoing surveillance after the program ends.

Support for Program Completion

• The IMF staff supports the authorities' request to complete the Fifth Review and the Financing Assurances Review.
• A waiver of a continuous performance criterion is requested due to an exchange restriction, which the staff endorses.
• The Letter of Intent (LOI) outlines the authorities' commitments for future fiscal and structural policies.

Conclusion

Latvia has made significant progress in stabilizing its economy and maintaining the exchange rate peg, but structural reforms and continued fiscal discipline are essential to ensure long-term sustainability and successful euro adoption. The country remains vulnerable to external shocks, particularly from the euro area debt crisis, and must address ongoing challenges in the financial sector and labor market to maintain economic stability.