Burundi: Fourth Review Under the Extended Credit Facility Arrangement-Staff Report; Press Release

KEY ISSUESContext: Swift corrective measures were instrumental in putting the program back on track and placing the fiscal outlook on a sounder footing in the run-up to the 2015 elections.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 first, second and third reviews were completed on July 27, 2012, February 14, 2013, and September 6, 2013, respectively. For the fourth review, all performance criteria were observed, aided by the adoption of significant measures to bring the program back on track following fiscal slippages in early 2013. Satisfactory progress has been made on structural reforms. Policy discussions focused on reinvigorating program implementation after the difficulties in completing the third review under the ECF arrangement.Outlook and risks: The macroeconomic outlook remains difficult, and external vulnerabilities persist in the context of lower international coffee prices. Absent poor harvests, the inflation outlook in 2014 remains favorable, owing to lower projected international food and fuel prices. Wavering program ownership and expenditure pressures in the run-up to elections constitute key risks to the outlook.Staff Views: The staff recommends the completion of the fourth review under the ECF arrangement, setting of new performance and indicative criteria for September 2014, and the disbursement of SDR 5 million. The authorities have consented to the publication of this report following the completion of the review.