Economics & Development

Economic activity decelerated sharply in Q1 2026 amid a broad-based slowdown in domestic demand and a mounting energy price shock. High-frequency indicators signal subdued conditions moving into Q2. A sustained downturn in key production sectors can weaken labor income and further raise food prices just as higher energy prices are fueling faster inflation. The energy price shock has driven inflation above the target range since March and continues to dampen investor sentiment. The central bank tightened monetary policy to anchor inflation expectations and contain increasing price pressures. Meanwhile on fiscal, the government has allowed fuel price increases to pass through while providing targeted support for vulnerable groups.

This Completion and Learning Review (CLR) for Argentina covers the period of the Country Partnership Framework (CPF) spanning fiscal years (FY) 2019-2024. The Performance and Learning Review (PLR) of May 3, 2022, modified the results framework and extended the original CPF period by two years to June 30, 2024. The CPF objectives were aligned with the government’s priorities and with the development challenges identified in the 2018 Systematic Country Diagnostic (SCD). The main focus of the CPF was to support the country in reducing macroeconomic instability and laying the foundation for poverty reduction through private sector–led growth. To this end, and consistent with the SCD, the CPF engagement targeted interventions that: (i) catalyzed private sector investment and leveraged resources; (ii) addressed key institutional challenges to shared prosperity and inequality; and (iii) delivered global public goods. A key priority for the government was to balance macroeconomic stabilization with continued efforts to implement structural reforms. New IBRD lending would focus primarily on interventions to strengthen policies and institutions required for sustainable IBRD graduation.

This paper studies the interaction of the contribution-benefit link with tax evasion in the context of parental benefits in Hungary and Latvia. Across the two countries, institutional settings, and time periods, earnings and employment patterns suggest substantial pre-pregnancy underreporting, followed by partial formalization during pregnancy to increase benefits. Using policy reforms, the paper shows that the reporting response tracks changing incentives. The results indicate that even with third-party reporting, income underreporting can be common. Linking benefits to contributions when earnings are underreported may reduce evasion temporarily but can impose net fiscal costs depending on program design.

Since 2021, in response to requests from the Papua New Guinea (PNG) government, the World Bank has been providing ongoing technical assistance (TA) to the Internal Revenue Commission (IRC) and sub-national governments of Central Province and East Sepik. The objective of this assistance is to strengthen compliance with national and subnational tax laws and regulations, modernize tax administration policies and procedures, and introduce changes to sustain and enhance domestic revenue performance. This support has been delivered through remote discussions and a series of in-person missions focusing on key areas of national and subnational tax administration reforms, with an emphasis on capacity building at both levels. This note will document the lessons learned during the delivery of the technical assistance for future implementation of tax reform activities in PNG and other developing countries at a similar level of development.