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The World Bank is sharing the seventh edition of the Economic Update of Madagascar, which presents our analysis for the period up to the beginning of October 2017 and provides our medium-term economic outlook. Despite a challenging start due to two climatic shocks, we project growth at 4.1 percent in 2017, a continuation of the positive trend from last year. Key growth drivers i.

Economic Growth --- Export Competitiveness --- Fiscal and Monetary Policy --- Macroeconomics and Economic Growth

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Economic performance in 2018 has been mixed. The data that are available suggest some areas of softening in the economy.1 Foreign direct investment declined to 2 percent of GDP in 2017, down from about 5 percent in 2014. The current account deficit has increased to 3.8 percent of GDP in the year ending September 2018, from 2.2 in the preceding 12 months. Recent Bank of Tanzania data confirm lower cashew exports and 2017 decline in non-traditional exports has continued into 2018, which raises concerns on prospects for longer term growth. The Tanzania Revenue Authority is reporting that many large tax payers are unable to meet their tax obligations on time. Nonperforming loans have declined recently to 9.7 percent in September 2018 from 12.5 percent in September 2017, but remain almost double the 5 percent statutory threshold. Banks have limited lending to businesses and interest rates are high (18 percent for one-year loans in August 2018), though some banks have lowered benchmark lending rates. On a positive note, credit to the private sector has been edging up, reaching 4.9 percent in the 12 months ending September 2018. The fiscal deficit is still low, not counting payment arrears and delayed refunds of value-added tax. The 2017/18 budget deficit after grants of 1.3 percent of GDP suggests effective spending management but does not factor in payment arrears, with an estimated stock of over 3 percent of GDP. Government is paying down roughly TZS 1 trillion of verified arrears per fiscal year. The low deficit is the result of controlled recurrent expenditures and under execution of the development budget by more than 40 percent. Contributing factors include shortfalls in domestic revenue and external financing for large projects. Public debt is currently sustainable, but there is need for the Government to consider cost-effective financing options and manage associated risks to support public investments. The 2018/19 budget targets public investment to consume 45 percent of total spending, equivalent to 9.1 percent of GDP compared to 5.5 a year prior.

Economic Growth --- Fiscal and Monetary Policy --- Gender --- Girls' Education --- Inequality --- Macroeconomics and Economic Growth --- Poverty Reduction

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This edition of the Tajikistan Country Economic Update (CEU) is part of a semi-annual series designed to monitor socio-economic developments in Tajikistan. In the first half of 2017, total investment was down by over seventeen percent year on year. However, investment picked up markedly in the third quarter, resulting in a year-on-year increase of twenty two percent compared to the first nine months of 2016. This report presents an analysis of political, economic and social developments, as well as the progress of and challenges with the implementation of structural reforms in 2017. It also includes a special section highlighting the key fiscal management challenges in Tajikistan.

Economic Forecasting --- Economic Growth --- Fiscal and Monetary Policy --- Macroeconomic Management --- Macroeconomics and Economic Growth --- Poverty Reduction

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Mozambique is beginning to emerge from a period of elevated macroeconomic volatility two years after hidden debt revelations triggered a significant economic downturn, but with a reduced capacity for growth. Having averaged near 8 percent between 2005 and 2015, GDP growth dropped to 3.7 in 2017 and is projected to fall further to 3.3 percent in 2018 as slower growth in coal production is expected to offset any modest upturn in manufacturing and services. Fiscal consolidation is making progress, but debt levels continue to be a concern. In an analysis of the structure and drivers of Mozambique's growth over the past two decades, the report notes that progress in reducing poverty levels have come as the expense of rising inequality. Therefore, shifting the growth model to broaden the drivers of growth and to raise productivity in sectors with the highest employment potential is a primary challenge facing Mozambique's policy makers today.

Economic growth --- Fiscal and monetary policy --- Inequality --- Macroeconomics and economic growth --- Monetary policy --- Poverty reduction --- Productivity

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Myanmar's macroeconomic environment remains stable, though economic growth is estimated to have slowed to 5.9 percent in 2016-17 compared to 7 percent in 2015-16, weighed down by slower investment demand. Growth is projected to recover to 6.4 percent in 2017-18, though risks are tilted to the downside due to the recent escalation of tensions in Rakhine State and the potential stalling of the overall reform agenda. Baseline projections assume that the authorities will move to a medium-term economic reform program to sustain hard earned macroeconomic stability gains and accelerate inclusive growth. Accelerating much needed investments in the economy will also require progress on structural reforms in, among other areas, finance, energy, and business regulations. On access to finance, implementation of the recently adopted prudential regulations under the Financial Institutions Law are expected to support financial sector stability and to manage risks. The banking community however has sought more time to comply with the new regulations because current deadlines might put pressure on the financial system. Progress on reform of State Owned Banks is expected over the coming months starting with international audits. At the same time, steps to develop a secured transaction framework and credit bureau licensing should help to improve access to finance and credit quality. On access to electricity, priorities include finalizing the power sector master plan and associated decisions on dealing with gas supply shortages, electricity tariff adjustments with protection for vulnerable groups, and institutional reforms (e.g. establishment of regulatory agency). On business regulations, priorities include implementation of the 2016 investment law, adoption of the companies act, and aligning customs procedures in valuation of goods with international practices.

Economic Forecasting --- Economic Growth --- Fiscal and Monetary Policy --- Macroeconomics and Economic Growth --- Poverty Reduction