The pandemic is inflicting much suffering, which has been met with swift, substantial, and well-coordinated policy responses. The anti-crisis measures have helped preserve jobs, provide liquidity to companies and income support to the vulnerable groups. They averted a larger decline in output and kept unemployment under control. After contracting by 5.5 percent in 2020, real GDP is projected to grow by 3.9 percent in 2021 and 4.5 percent in 2022, as vaccinations help achieve herd immunity. However, risks to the outlook are large and tilted to the downside, given the epidemiological situation.
Slovenia has weathered the pandemic and the energy price shocks well, but long-term challenges remain. Ageing of Slovenia’s population is a challenge, and private investment has softened over the past decade. The 2023 floods caused significant damage.
After over two decades of unprecedented economic expansion, Panama’s economy contracted sharply in 2020 amidst challenges from the COVID-19 pandemic. As conditions rapidly deteriorated, Panama requested financial support under the Rapid Financing Instrument (RFI) for 100 percent of quota equivalent to US$0.5 billion (SDR 0.4 billion) to address immediate balance of payments needs, which the IMF Executive Board approved on April 15, 2020. Subsequently, uncertainties magnified, and Panama requested a two-year arrangement under the Precautionary and Liquidity Line (PLL) for 500 percent of quota, equivalent to US$2.7 billion (SDR 1.9 billion), as insurance against extreme external shocks, which was approved by the IMF Executive Board on January 19, 2021.
This book takes stock of and analyses the direct and indirect effects of the war in Ukraine, the policy response to the shock across countries, as well as the potential medium-term economic and social implications and policy challenges. The last decade most Central and Eastern European (CEE) economies have been on a convergence path towards the EU average according to the main economic indicators. In 2022, however, the terrible war in Ukraine had major spillovers to the rest of the world, with the CEE economies being among the most exposed. The millions of refugees, the disruptions to energy supply, trade and supply chains, the surge in inflation, the tightening of global financial conditions, and elevated uncertainty created a radically new economic and social environment in these countries. The volume covers the economic effects of these challenges, the policy options available, and also those related to the eventual reconstruction of Ukraine, including the potential role of the CEE countries. Based on data and evidence-supported policy analysis, each chapter studies the impact of the shock on a particular area of the economy and makes general and country-specific policy recommendations. This makes this book a must-read for students, scholars, and researchers of economics and neighboring disciplines, as well as policy-makers interested in a better understading of the direct and indirect effects of the war in Ukraine on the CEE countries. The book is a sequel to the volume Emerging European Economies after the Pandemic, (Springer Nature, January 2022). Chapter "Economic Growth & Resilience" is available open access under a Creative Commons Attribution 4.0 International License via link.springer.com.
A careful review has revealed significant scope to modernize and better align the MAC DSA with its objectives and the IMF’s lending framework. This note proposes replacing the current framework with a new methodology based on risk assessments at three different horizons. Extensive testing has shown that the proposed framework has much better predictive accuracy than the current one. In addition to predicting sovereign stress, the framework can be used to derive statements about debt stabilization under current policies and about debt sustainability.
