Get the Basics in Economics from the IMF’s One-Stop Shop

Posted on February 15, 2012 by iMFdirect

The IMF’s Finance & Development magazine has just come out with a useful web compilation of stories in its “Back to Basics” series on economics.

The page is aimed at students, academics, and those seeking a broader understanding of economic ideas. It pulls together articles from the Back to Basics column in the quarterly magazine that have been published since 2003.

Editors at the magazine, which is published in Arabic, Chinese, French, Spanish, and Russian, as well as English  have revisited the series, updating and revising where needed, and helpfully compiling the most relevant B2B stories in one place. The series is ongoing and they say they will add new articles as they appear in the magazine.

F&D publishes analysis of topics related to the global crisis, international financial system, monetary policy, economic development, poverty reduction, and other world economic issues.

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Filed under: Economic research, Financial regulation, Fiscal policy, growth, IMF, International Monetary Fund, Public debt | Tagged: , , , , , , , , | Leave a Comment »

The Impact of the Gloomier Global Outlook on Latin America

Posted on February 10, 2012 by iMFdirect

By Nicolás Eyzaguirre

(Version in Español)

The IMF has sharply marked down its forecast for world growth and it now expects a mild recession in the euro area. Naturally, weaker world growth will affect economic activity in Latin America and the Caribbean.

Concretely, the Fund expects the world economy to grow by just 3¼ percent in 2012, ¾ percentage points lower than our September forecasts.

In contrast, our forecast for the U.S. economy for 2012 is unchanged, as incoming data signal a stronger—but still sluggish—domestic recovery that will offset a weaker global environment. Commodity prices will be affected by ebbing global demand, with oil projected to fall about 5 percent and non-oil commodities about 14 percent.

Read more »

Filed under: Economic outlook, Economic research, Español, Financial Crisis, International Monetary Fund, Latin America | Tagged: , , , , , , , , , , , , , , , , | 1 Comment »

Saudi Arabia: a Key Regional and Global Player

Posted on February 8, 2012 by iMFdirect

By Christine Lagarde

(Version in عربي)

I have just returned from Saudi Arabia, where I was welcomed with exceptional warmth and hospitality. It was my first visit as the Managing Director of the IMF.

It was a pleasure to be in Saudi Arabia, a country with rich heritage and culture. And a country that is seeking to chart a path that balances the drive for greater economic development and closer integration into the global economy with the strong desire to preserve the traditions and values of its people.

I had the privilege of meeting H.M. King Abdullah, senior government officials, and representatives of the private sector. Our discussions were productive and constructive, and we traded views on current global, regional, and domestic developments. Read more »

Filed under: Economic Crisis, Economic outlook, Employment, Europe, Global Governance, growth, IMF, Inequality, International Monetary Fund, Middle East, Multilateral Cooperation, recession | Tagged: , , , , , , , , , , , | 2 Comments »

Hope and Perseverance on Tunisia’s Demanding Road Ahead

Posted on February 2, 2012 by iMFdirect

By Christine Lagarde

(Version in عربي)

Tunisia, the spark that ignited the Arab Spring, was where I spent the past two days. I held official meetings with the new leaders of the country. They spoke about the Freedom and Dignity Revolution, as the Tunisians call it, and of their concerns to ensure a smooth transition to democracy and prosperity.

One year on, it is still extraordinary to think how this dramatic transformation by a grassroots movement has migrated to other countries across the Middle East and North Africa.

Alongside my official visits, I particularly enjoyed a lunch I had with a small group of women, entrepreneurs, professors, and youth activists who spoke passionately about their lives, their commitment, and their hopes for their country. Read more »

Filed under: Economic Crisis, Economic outlook, Employment, Europe, Financial Crisis, growth, IMF, Inequality, International Monetary Fund, Middle East, Public debt, recession | Tagged: , , , , , , , , | 3 Comments »

It’s the Years, Not The Mileage: IMF Analysis of Pension Reforms in Advanced Economies

Posted on February 1, 2012 by iMFdirect

By Benedict Clements

Indiana Jones, the fictional character of the namesake movies, once said “It’s not the years, it’s the mileage.” This quote comes to mind as many advanced economies wrestle with pension reform and the best way to ensure both retirees and governments don’t go broke.

Our view, explained in a new study, is that the years do matter.

Our analysis shows that gradually raising retirement ages could help countries contain increases in pension spending and boost economic growth. Further cuts in pension benefits, or raising payroll contributions, are also options countries could consider, although many countries will find many advantages in raising retirement ages.

The challenge is to reform pension systems without hurting their ability to provide income security for the elderly and prevent old-age poverty. Read more »

Filed under: Advanced Economies, Economic Crisis, Employment, Fiscal policy, IMF, International Monetary Fund, Public debt | Tagged: , , , , , , , , , , , , , , , , | 1 Comment »

Fiscal Adjustment: Too Much of a Good Thing?

Posted on January 29, 2012 by iMFdirect

By Carlo Cottarelli

(Versions in  عربي, 中文, Español, Français, Русский, 日本語)

The IMF has argued for some time that the very high public debt ratios in many advanced economies should be brought down to safer levels through a gradual and steady process. Doing either too little or too much both involve risks: not enough fiscal adjustment could lead to a loss of market confidence and a fiscal crisis, potentially killing growth; but too much adjustment will hurt growth directly.

At times over the last couple of years we called on countries to step up the pace of adjustment when we thought they were moving too slowly.

Instead, in the current environment, I worry that some might be going too fast.

Risk to recovery

The latest update of the Fiscal Monitor shows that fiscal adjustment is proceeding pretty quickly in the advanced economies—on average the deficit is projected to fall by a total of 2 percentage points of GDP in 2011-12. The decline is even larger in the euro area—about 3 percentage points of GDP. In a reasonably good growth environment this pace of adjustment would be fine. But in the current weaker macroeconomic environment bringing deficits down this quickly could pose a risk for the economic recovery. Read more »

Filed under: Advanced Economies, Economic Crisis, Economic outlook, Economic research, Fiscal policy, Public debt | Tagged: , , , , , , , , , , , , | 11 Comments »

Lagarde in Davos: How to Avoid an Economic Deep Freeze

Posted on January 27, 2012 by iMFdirect

By iMFdirect

Amid the heaviest snowfall in Davos for decades, IMF chief Christine Lagarde has been making her case for urgent action to resolve the eurozone crisis, which is at the center of current global economic concerns. The Fund recently sharply revised downward its forecast for global economic growth and in a speech in Berlin Lagarde mapped a way forward.

Policy priorities

Lagarde has taken her messages to the Alpine resort in Switzerland, where global leaders are gathered for the 42nd Annual Meeting of the World Economic Forum. At the top of the agenda is the need to find and implement the policy solutions to avoid a downward economic spiral—or what Lagarde as has called a “1930s moment.” She set out some of the policy priorities in a video interview and stressed the need for policy action to be “coordinated, cooperative and comprehensive”. The main goal is to get growth going again “because that’s most needed. There is too much unemployment around the world,” Lagarde said. Read more »

Filed under: Advanced Economies, Economic Crisis, Economic outlook, Emerging Markets, Employment, Europe, Financial Crisis, Fiscal policy, IMF, International Monetary Fund | Tagged: , , , , , , , , , , | 15 Comments »

How to Exit the Danger Zone: IMF Update on Global Financial Stability

Posted on January 24, 2012 by iMFdirect

By José Viñals

(Versions in  عربي, 中文, Español, Français, Русский, 日本語)

Since September of last year, risks to global financial stability have deepened, notably in the euro area.

However, over the past few weeks, markets have been encouraged by measures to provide liquidity to banks and sovereigns in the euro area. This recent improvement should not be taken for granted, as some sovereign debt markets remain under stress, and as bank funding markets are on life support from the European Central Bank (ECB).

Main sources of risk

Many of the root causes of the euro area crisis still need to be addressed before the system is stabilized and returns to health. Until this is done, global financial stability is likely to remain well within the “danger zone,” where a misstep or failure to address underlying tensions could precipitate a global crisis with grave economic and financial consequences.

Despite the recent improvements, sovereign financing stress has increased for many countries—with almost two-thirds of outstanding euro area bonds at spreads in excess of 150 basis points—and financing prospects are challenging. Markets remain very volatile and long-term foreign investors have sharply reduced their exposure to a number of euro area debt markets, including some in the core. Keeping these investors involved is essential to stabilizing markets.

Read more »

Filed under: Advanced Economies, Economic Crisis, Emerging Markets, Europe, Financial Crisis, IMF, International Monetary Fund | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 1 Comment »

Driving the Global Economy with the Brakes On

Posted on January 24, 2012 by iMFdirect

By Olivier Blanchard

(Versions in  عربي, 中文, Español, Français, Русский, 日本語)

After the speech by the IMF’s Managing Director in Berlin yesterday, my main messages on the global outlook will not surprise you.

Starting with the bad news–the world recovery, which was weak in the first place, is in danger of stalling. The epicenter of the danger is Europe, but the rest of the world is increasingly affected.

There is an even greater danger, namely that the European crisis intensifies. In this case, the world could be plunged into another recession.

Turning to the good news–with the right set of measures, the worst can definitely be avoided, and the recovery can be put back on track. These measures can be taken, need to be taken, and need to be taken urgently.

And now the numbers, starting at the epicenter:

The IMF’s forecast for growth in Euro Area for 2012 is ‑0.5 percent—this marks a decrease of 1.6 percentage points relative to our September 2011 projection. In particular, we predict negative growth in Italy (‑2.2 percent) and Spain (‑1.7 percent).

We have also revised downwards our forecasts for other advanced countries, although by less. Only for the United States, is our forecast unchanged at 1.8 percent.

Read more »

Filed under: Advanced Economies, Africa, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, Europe, Financial Crisis, Financial regulation, Financial sector supervision, Fiscal policy, Fiscal Stimulus, G-20, Global Governance, growth, IMF, Inequality, International Monetary Fund, Latin America, Low-income countries, Middle East, Public debt, recession | Tagged: , , , , , , , , , , , , , , | 8 Comments »

Meeting the Employment Challenge in the GCC

Posted on January 19, 2012 by iMFdirect

By Masood Ahmed

(Version in عربي)

The issue of how to create more jobs is high on the minds of policymakers everywhere. The economies of the six Gulf Cooperation Council (GCC) countries—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates—are no exception.

By many measures, these economies are doing very well. Abundant oil and gas reserves are producing large budget and external surpluses, growth is up, and considerable strides have been made on social indicators.

Yet, economic activity is dominated by the oil/gas sector and—given that many GCC countries have proven reserves of at least another 50–100 years at current rates of production—will remain so. However, that sector creates relatively few jobs directly—it employs less than 3 percent of the region’s labor force.

Read more »

Filed under: Employment, growth, International Monetary Fund, Middle East, عربي | Tagged: , , , , , , , , , , , , , , | 3 Comments »

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