The International Monetary Fund (IMF) has concluded the Article IV consultation with the Federated States of Micronesia (FSM). The IMF commended India's economic resilience and growth after concluding the Article IV consultation with New Delhi. The IMF praised India's robust economic growth, resilient financial sector, and progress in formalization and digital infrastructure. India's economy exhibited strong growth, surpassing pre-pandemic employment levels and showing resilience in the informal sector. The financial sector performed well, despite global financial stress. The IMF projects continued strong growth for India, with a real GDP growth rate of 6.3% in FY2023/24 and FY2024/25. The current account deficit is expected to improve to 1.8% of GDP in FY2023/24. The IMF emphasized the importance of further liberalization of foreign investment, structural reforms, and climate policy implementation. The directors supported India's macroeconomic policies and reforms, recommending ambitious medium-term consolidation efforts and improvements in revenue mobilization and spending efficiency. The Reserve Bank of India's proactive monetary policy was praised, and exchange rate flexibility was highlighted as a defense against external shocks. The directors also stressed the importance of labor market functioning, increased female labor force participation, and progress in health, education, land, and agricultural reforms. The IMF's positive assessment highlights India's economic resilience and stability. India's proactive approach to economic challenges positions the nation as a key player in the global economic landscape.
FSM experienced a short-lived recovery in 2021 from Covid, but economic activity has since stagnated. Economic growth rebounded to 3 percent in FY2021, but growth is estimated to have averaged zero in FY2022-23. Inflation reached a decade high of 6.2 percent. FSM's near-term economic prospects will get a boost from higher public investment. Growth in FY2024 is projected at 1.1 percent before accelerating further to 1.7 percent. However, without significant reforms, economic growth is likely to converge to the historical average of around 0.7 percent over time. The FSM economy remains highly vulnerable to shocks and outward emigration. The IMF Directors stressed the need for reforms to support private sector-led growth and pursue an enhanced climate strategy. They also recommended further efforts to improve economic statistics and strengthen the financial sector. The IMF Quota for FSM is SDR 7.2 million. The nominal GDP for FY2022 is US$430 million, with a population of GDP per capita of US$4,540. The public debt is 12.4 percent of GDP, and the assets of the trust funds have risen to 323 percent of GDP. The IMF's Article IV consultation involves bilateral discussions with members to collect economic and financial information and discuss economic developments and policies.
The IMF plays a crucial role in supporting countries around the world in their pursuit of economic growth, stability, and reform. Through financial assistance, policy guidance, and dialogue with authorities, the IMF aims to strengthen governance, transparency, and key economic institutions to promote sustainable development and address challenges faced by countries. This story highlights the IMF's support for the Central African Republic, Somalia, Mexico, and Nicaragua, each with their unique economic outlooks and policy recommendations.
In the Central African Republic, the IMF has approved a $25 million disbursement to address the country's balance of payments needs and sustain spending on basic public services. Despite projected economic growth, inflation remains high, and the authorities are implementing measures to meet targets and strengthen governance and transparency.
Similarly, Somalia has reached a staff-level agreement with the IMF on economic policies and reforms. The IMF's support, through a new 36-month arrangement of about US$100 million, aims to strengthen key economic institutions, promote macroeconomic stability and growth, and address challenges faced by the country, including economic, social, security, and climate risks.
Mexico, on the other hand, has obtained a new two-year Flexible Credit Line (FCL) arrangement worth approximately US$35 billion. This arrangement is designed for crisis prevention, and the Mexican authorities plan to treat it as precautionary. The IMF will reassess the outlook for external risks and their implications for access under the FCL during the mid-term review next year.
In Nicaragua, the IMF conducted an Article IV Consultation mission and provided policy recommendations to support the country's economic outlook. The economy has experienced a strong rebound and is expected to grow by 4 percent in 2023. Efforts to address structural imbalances of state-owned enterprises and social security accounts are recommended, along with the alignment of the anti-money laundering and counter-terrorism financing framework with international standards. The government's commitment to transparency and oversight of public funds is acknowledged, and the mission recommends strengthening anti-corruption and governance frameworks.
The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Angola. Angola's economic recovery in 2021/22 was nearly halted in 2023 due to a double shock in the first half of the year. Growth is estimated at 0.5 percent for 2023, with a contraction in the oil sector of 6.1 percent. Inflation increased to 20.0 percent y/y at end-December 2023. The authorities tightened their fiscal stance in the second half of 2023, resulting in overall and non-oil primary fiscal balances of -0.1 percent of GDP and -6.3 percent of GDP, respectively. Public debt-to-GDP is projected to have increased to about 84 percent of GDP in 2023. Economic growth is projected to recover in the near-term, supported by improved oil production and the recovery in the non-oil sector. The next Article IV consultation with Angola will be held on the standard 12-month cycle. Directors emphasized the need for continued fiscal consolidation and structural reforms to maintain macroeconomic stability and foster diversified, resilient, and inclusive growth. Continued fiscal consolidation and reforms are critical to strengthen fiscal and public debt sustainability. A tight monetary policy stance is needed to contain exchange rate and inflationary pressures. Efforts to strengthen financial stability and increase financial intermediation and credit to the private sector should continue. The National Development Plan should focus on enhancing human capital, improving the business environment, strengthening climate adaptation and resilience, and addressing issues related to AML/CFT, governance, and corruption.