Burundi: Sixth Review Under the Extended Credit Facility Arrangement and Request for Extension and Augmentation of Access-Staff Report; Press Release; and Statement by the Executive Director for Burundi
KEY ISSUES Context: Corrective revenue measures helped keep the program on track and macroeconomic conditions improved in late 2014 following the decline in oil prices. Uncertainties related to the 2015 general elections weigh on the outlook. Program: The Executive Board approved the three-year arrangement under the Extended Credit Facility (ECF) on January 27, 2012, with a total access of 39 percent of quota (SDR 30 million). The fifth review was completed on August 25, 2014. For the sixth review, all performance criteria were observed, aided by the revenue measures taken in July to address the fiscal slippage that emerged earlier in 2014. Satisfactory progress has been made on structural reforms. The authorities have requested a one-year extension of the current ECF arrangement, which expires in March 2015, to enable provision of additional Fund resources via an augmentation of access by an amount equivalent to SDR 10 million (13 percent of quota). Outlook and risks: The macroeconomic outlook is broadly favorable, driven by continued public investment and a gradual recovery in agriculture; however, external vulnerabilities persist due to a protracted decline in coffee exports and high volatility of coffee prices. Under normal harvest conditions, inflation in 2015 is expected to remain in low single digits. Expenditure pressures in the context of the elections constitute a key risk to the fiscal outlook. Staff views: Staff supports the completion of the sixth review under the ECF and the authorities’ requests for an augmentation of access and extension of the current ECF arrangement through March 2016, which will be instrumental to catalyze donor support needed to address Burundi’s protracted balance-of-payments problem. Completion of the review will result in disbursement of an amount equivalent to SDR 5 million under the ECF arrangement.
