2017年-IMF国际货币组织全球_Kingdom_of_Swaziland_Selected_Issues_17页_1018kb

Summary of the Selected Issues Paper on the Kingdom of Swaziland (September 2017)

Core Content

This paper analyzes the fiscal vulnerabilities and economic challenges in the Kingdom of Swaziland, focusing on the balance sheet approach, investment and employment dynamics, and the potential for structural reforms to enhance growth and inclusiveness.

Main Points

A. Fiscal Vulnerabilities and Macroeconomic Risks

• The government's balance sheet has been deteriorating rapidly since 2015, with public debt reaching 25.5% of GDP and gross financing needs exceeding 22% of GDP in FY16/17.
• The government's liquidity position is weak, with limited liquid financial assets (7% of GDP in March 2017) and significant short-term liabilities.
• Domestic arrears represent over 20% of government liabilities, and the maturity mismatch in the government's balance sheet raises concerns about rollover risks and liquidity crises.
• Fiscal shocks could propagate quickly through the financial sector, leading to credit contraction, bank losses, and potential recessions.
• Banks and non-bank financial institutions (particularly the Public Sector Pension Fund (PSPF)) have large exposures to the government, increasing the risk of systemic shocks.
• If the government defaults on its debt, banks and the PSPF could suffer significant capital losses, which may trigger financial instability and government bailouts.

B. Transmission of Fiscal Vulnerabilities

• Fiscal shocks are transmitted through two main channels:
  1. Government-to-private sector linkages via domestic arrears and corporate loan exposure, which can lead to corporate defaults, increased non-performing loans (NPLs), and reduced credit availability.
  2. Government-to-financial sector linkages via securities holdings, which could directly impact bank capital buffers and financial stability.
• The NPL ratio in banks increased from 8% in 2016Q1 to 10.5% in 2017Q1, indicating financial sector stress.
• Stress tests suggest that the banking sector is vulnerable to liquidity shocks, which could lead to deleveraging and economic slowdown.

C. Investment and Employment Challenges

• Private investment has been declining since 2010, with investment-to-GDP ratio dropping from 16.7% in 2000 to 8% in 2015.
• Employment growth has been unresponsive to GDP growth, with unemployment rate persistently high at ~28% (compared to ~5.3% in the region).
• The Okun's coefficient is not significantly different from zero, suggesting limited employment responsiveness to economic growth and structural issues in the labor market.

D. Structural Barriers to Investment and Employment

• High skill mismatches in the labor market are a major constraint, with Swaziland ranked 136th out of 139 countries in the skills mismatch index.
• There is a disconnect between wage growth and productivity. Public sector wage increases are outpacing productivity gains, leading to high unemployment and low investment.
• Business regulations and institutional environment are not conducive to growth, with Swaziland ranking 128th out of 140 economies in Global Competitiveness indicators.
• HIV prevalence also negatively affects business performance and labor productivity.

Key Findings and Recommendations

• Fiscal consolidation is essential to prevent further deterioration of the government's financial position and mitigate macro-financial risks.
• Strengthening the Central Bank of Swaziland (CBS) to monitor and manage macro-financial risks and exercise macro-prudential controls is recommended.
• Structural reforms could yield double dividends:
  • Long-term growth through improved investment and productivity.
  • Reduction in unemployment by addressing skill mismatches, wage-productivity imbalances, and institutional weaknesses.
• Key areas for reform include:
  • Improving business and institutional environments (e.g., contract enforcement, property rights, judicial independence).
  • Enhancing wage flexibility and labor productivity.
  • Strengthening education and health outcomes, particularly secondary and tertiary education enrollment and HIV prevalence reduction.

Conclusion

The fiscal vulnerabilities of the Kingdom of Swaziland pose significant macro-financial risks due to limited liquidity, high debt levels, and maturity mismatches. These risks are amplified through financial sector linkages, potentially leading to recessions and bank insolvencies. At the same time, low private investment and unresponsive employment growth indicate structural issues in the labor market and business environment. Structural reforms targeting these areas could lead to more inclusive growth and greater economic resilience.