The high rise in inflation in the West African country definitely caught the attention of the International Monetary Fund (IMF) team which paid a visit to the country to convey preliminary findings.
According to the Leader of the IMF team sent to the country, Mika Saito “Liberia’s economic situation is challenging, and strong policy action would be required to maintain as favourable an outlook as anticipated at this time last year”
The Washington based IMF further stated that the growth of Liberia in 2018 was 1.2 per cent lower than 2.5 per cent recorded in 2017. The policies in line with the 2019 forecast have been reviewed down to 0.4 per cent from the earlier record of 4.7 per cent.
However, the macro-economic stability is seen to be unsuccessful despite improvement in the collated revenue in the first half of the financial year 2019. Saito also suggested that the commencement of sales of Central Bank Bills, supplemented by the introduction of the standing deposit and credit facilities in the interbank market will represent major milestones in modernizing the monetary policy framework.
Saito added that with the appropriate preconditions firmly in place, a timely reduction of the rate of inflation to single digits appears possible. Stating that of the necessary preconditions, the most critical is that the government refrain from borrowing from the central bank.
Ms Saito also stated the need for fiscal policies, ensuring the improvement in the efficiency of government spending. According to her, “policies should aim at improving the monitoring, accountability, and transparency of spending, while intensifying actions to improve governance and fight corruption”
On a final note, the head of the team further added that “the mission has noted the need for significant action to improve the business climate and provide an enabling environment that is required for private sector-led growth in the country”.