| Summary: | The fall in commodity prices and adverse weather conditions have adversely affected economic activity. The latter further declined following the disclosure of hidden loans in the spring of 2016 and the ensuing freeze in donor support. While tight monetary policy has helped stabilize the exchange rate and lower inflation since the fall of 2016, an overly loose fiscal policy is crowding out the private sector and resulting in an accumulation of domestic arrears. Public debt is in distress with several external borrowing payments missed. While the actual and projected fiscal deficits remain excessively high, the government has implemented measures to ease spending pressures, such as the elimination of fuel and wheat subsidies and the reduction of civil servants’ allowances and benefits
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