The effectiveness of recent fiscal stimulus packages significantly depends on the assumption of non-Ricardian savings behavior. We show that, under the same assumption, fiscal deficits can have worrisome implications if they turn out to be permanent. First, if they occur in large countries they...

Belize’s economy is projected to decelerate in 2009 owing to the global downturn. Real GDP growth is projected at 1 percent, reflecting the impact of declining tourism, remittances, and foreign direct investment inflows. Executive Directors have welcomed the broadly favorable economic...

The staff report for Belize’s use of Fund Resources and Request for Emergency Assistance is examined. Economic growth has been sustained largely by rising oil production, while inflation has remained under control. Despite rising oil production, economic growth has been low in 2007, in...

The contraction in Romania’s domestic demand has set off a sharp correction in external imbalances and helped ease pressures on inflation. Real GDP contracted by 7.6 percent in the first half of 2009, compared with 2 percent projected under the program, on account of a sharp drop in...

This paper discusses key findings of the Fifth Review under the Poverty Reduction and Growth Facility (PRGF) for The Gambia. The Gambia’s external debt position has worsened recently. The global economic crisis is undermining growth and the external balance. Performance on the...

This paper discusses key findings of the Second Review for Ukraine under the Stand-By Arrangement and request for modification of performance criteria. Policy implementation has been broadly in line with the program. The end-May quantitative performance criteria on base money, net international...

This paper discusses a request from the Democratic Republic of São Tomé and Príncipe for a three-year arrangement under the Poverty Reduction and Growth Facility (PRGF). The economic outlook for 2009 is broadly favorable, but subject to significant risks. The program spans a period including...

This paper discusses key findings of the Fifth Review under the policy support instrument for Uganda. Strong fundamentals and prudent economic policies of the past give Uganda scope to implement measured countercyclical policies without undermining macroeconomic stability. Monetary policy has...

This paper discusses key findings of the First Review Under the Stand-By Arrangement for Iceland. Post-crisis dynamics has followed the expected pattern: a sharp drop in GDP, rapid decline in inflation, shift of the current account to balance, and gradual stabilization of currency and financial...