The latest visit by a team from the IMF as part of the sixth review of Liberia's extended credit facility (ECF) ended with a largely positive statement from the Fund praising the government's progress under the programme, which ran from March 2008 to March 2011. The statement said that all monetary and fiscal targets had been met at the end of 2010, and commended the prudent and realistic nature of the government's draft budget for 2011/12 (July-June), in which domestic revenue and grants will be supplemented by domestic and foreign borrowing in accordance with the government's debt management strategy. Implementation of the current budget has proceeded fairly smoothly, although capital expenditure has been lower than projected owing to a lack of capacity. There will be a focus on a limited number of strategic projects in 2011/12, supported by efforts to build capacity in key ministries and agencies in order to facilitate better implementation.

The Fund emphasised the importance of further structural reforms in order to consolidate existing progress and promote economic growth and investment. Fiscal policy measures will include the areas of public financial management, revenue administration and governance, while financial sector reforms will focus on capital market development and bank supervision, as well as strengthening the payments system. It has lowered its forecast for economic growth in 2011 (previously 8.8%, the Fund has not yet disclosed its latest forecast) owing to a decline in rubber production and delays in the resumption of timber exports. The Economist Intelligence Unit maintains its real GDP growth forecast of 7.3% in 2011, as economic prospects for the remainder of the year remain generally favourable. However, inflation is rising owing to higher global food and fuel prices as well as the inflationary impact of the unrest in neighbouring Côte d'Ivoire after the disputed November presidential election. The sixth review under the ECF is likely to be approved by the IMF Executive Board, resulting in a disbursement of SDR4.44m (US$7m), bringing the total disbursed under the programme to US$367m. A request to extend the programme until the end of 2011 will be granted, and a successor agreement is expected to be put in place for the start of 2012.