“All quantitative performance criteria for end-September 2014 were met and the structural agenda under the program advanced, albeit some reforms have taken longer than envisaged to implement,” said IMF’s statement.
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The Fund added that the economic growth was expected to reach 4.7 per cent in 2014, supported by a rebound in coffee production and construction activity linked to the implementation of major infrastructure projects, including fiber optics, hydropower, and roads.
“Following the decline in international prices of fuel and food, consumer price inflation subsided markedly, and the average inflation rate for the year as a whole is expected to drop from about 8 per cent in 2013 to 5–6 per cent in 2014,” added IMF.
The Fund also added that the economic outlook for 2015 was positive.
“Growth is projected to remain at broadly the same level as in 2014, reflecting ongoing public investment activity, notably in roads and energy generation, and the start of the pilot phase of nickel mining. Inflation in 2015 is projected to average 5.5 per cent,” read the statement.
According to the IMF report, revenue measures adopted in late July together with the receipts from the sales of telecom licenses helped reverse the revenue shortfall registered in the first half of the year.
“As a result, the annual revenue and budget deficit targets are within reach. Also, the reforms in public financial management advanced, with key steps including unification of the database of civil servants and preparation of a new law on public debt management.”
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The IMF said, the authorities took advantage of the drop in international fuel prices to restore the petroleum pricing mechanism, which will help strengthen budgetary resources in the period ahead.
The IMF mission encouraged the authorities to maintain budgetary discipline in the run-up to the 2015 general elections and allow the exchange rate to respond to underlying economic conditions, including the recent appreciation of the US dollar, to protect external stability and to foster competitiveness.