KEY ISSUES Setting: Swaziland has gradually recovered from the fiscal crisis of 2010-11, buoyed by the improved revenues from the Southern African Customs Union (SACU). Growth modestly recovered, and international reserves rebounded. Swaziland's challenges, however, remain significant, in view...

This 2017 Article IV Consultation highlights that the macroeconomic conditions have recently deteriorated in Swaziland. In 2016, two shocks-a prolonged drought and a sharp decline in South African Customs Union (SACU) receipts-severely hit the economy, while an expansionary fiscal policy...

This paper highlights that banks and nonbank financial institutions, businesses and households have large exposures to the government and, in some cases, their own vulnerabilities. In this context, a fiscal shock can rapidly propagate into the economy through the financial sector. The financial...