Debt in a Time of Protests

Posted on October 16, 2012 by iMFdirect

by Nemat Shafik

As the world economy continues to struggle, people are taking to the streets by the thousands to protest painful cuts in public spending designed to reduce government debt and deficits. This fiscal fury is understandable.

People want to regain the confidence they once had about the future when the economy was booming and more of us had jobs.

But after a protracted economic crisis, this will take planning, fair burden-sharing, and time itself.

If history is any guide, there is no silver bullet to debt reduction. Experience shows that it takes time to reduce government debt and deficits. Sustained efforts over many years will ultimately lead to success.

Most countries have made significant headway in rolling back fiscal deficits. By the end of next year in more than half of the world’s advanced economies, and about the same share of emerging markets, we expect deficits —adjusted for the economic cycle—to be at the same level or lower than before the global economic crisis hit in 2008.

But with a sluggish recovery, efforts at controlling debt stocks are taking longer to yield results, particularly in advanced economies. Gross public debt is nearing 80 percent of GDP on average for advanced economies—over 100 percent in several of them—and we do not expect it to stabilize before 2014-15.

So what can governments do to ease the pain and pave the way for successful debt reduction?

(more…)

Filed under: Advanced Economies, Annual Meetings, Asia, Economic Crisis, Emerging Markets, Employment, Europe, Finance, Fiscal policy, growth, IMF, Inequality, International Monetary Fund, Politics, Public debt, recession | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , | 9 Comments »

Tharman Sees “Greater Global Policy Resolve”

Posted on October 14, 2012 by iMFdirect

“Although the economic environment has weakened, the policy resolve has strengthened.” This is how Tharman Shanmugaratnam, Singapore’s Deputy Prime Minister and Minister for Finance , who is Chair of the IMF’s policy-setting committee, described the outcome of the IMF-World Bank annual meetings in Tokyo.

“Growth is slower than anyone expected,” he admitted in a video interview.  ”It is slower in Europe, it is not as fast as it should be in the United States, not as fast as it should be to bring unemployment down, and it is slowing in Asia to a greater extent than was expected. Tharman is chair of the 24-member IMFC.

“But we are now in a much better situation than six months ago when it comes to policy solutions.” He said there had been major steps forward in Europe “despite some disagreement on individual pieces.”  But underlying problems in the Eurozone, budget problems in the United States, and structural problems in global economy are longer term problems and “cannot be fixed quickly.”

For a quick brief on the outcomes from the meetings in Tokyo, take a look at:

(more…)

Filed under: Advanced Economies, Africa, Annual Meetings, Asia, Civil Society, concessional lending, Debt Relief, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, Europe, Finance, Financial Crisis, Financial sector supervision, Fiscal policy, Global Governance, Globalization, growth, IMF, Inequality, International Monetary Fund, Investment, Latin America, LICs, Low-income countries, Middle East, Multilateral Cooperation, Politics, Public debt | Tagged: , , , , , , , , , , , , , , , , | 9 Comments »

Sendai: A Tale of Natural Disaster, Resilience, and Recovery

Posted on October 10, 2012 by iMFdirect

in SendaiBy Christine Lagarde

Japan was struck, in the mid-afternoon of Friday, March 11, 2011,  by the country’s largest ever recorded earthquake. Within an hour, parts of Japan’s northeast coast were hit by a wall of water that swept away cars, boats, trains, buildings, roads—and thousands of lives.

It was with humility and respect, then, that I visited parts of the affected area more than 18 months on, in a special event this week in and around Sendai—the Japanese city most affected by the disaster, a couple of hours by train north of Tokyo. This “Sendai Dialogue,” cohosted by the Government of Japan and the World Bank, was part of the overall IMF/World Bank Annual Meetings being held in Tokyo this week.

Disaster turned to success

I went to two areas around Sendai—the first was the Arahama Elementary School, site of a successful evacuation during the disaster. The school is still in its wrecked state—just as it was straight after the tsunami struck. Debris is strewn all over the grounds–a mangled mass of vehicles resembling more a scrap yard than a school. The corridors and classrooms inside are also in ruins.

(more…)

Filed under: Annual Meetings, IMF, International Monetary Fund, Multilateral Cooperation, Politics | Tagged: , , , , , , , , , , , , , , , , | Leave a Comment »

Time Not On Our Side: Tough Decisions Needed to Strengthen Financial Stability

Posted on October 10, 2012 by iMFdirect

By José Viñals

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

Recent policy actions in Europe, the United States, in emerging markets, and here in Japan, where I’m attending the IMF-World Bank annual meetings, have improved investor sentiment and helped markets rebound in recent months.

Yet our latest assessment is that confidence is still very fragile and risks have increased, when compared to the IMF’s last report in April. Policymakers need to do more to gain lasting stability.

The principal risk remains the euro area. The forces of financial and economic fragmentation have widened the divide between countries at the core and the “periphery” of the euro zone. Faltering confidence and policy uncertainty have led to a pullback of cross-border private capital flows from the periphery—quite an extraordinary phenomenon within a currency union.

This has driven up funding costs to governments and banks, as well as for companies and households, and, in turn, threatening a vicious downward economic spiral.

(more…)

Filed under: Advanced Economies, Annual Meetings, Asia, Economic Crisis, Economic research, Emerging Markets, Europe, Finance, Financial Crisis, Financial regulation, Globalization, IMF, International Monetary Fund, Politics, Public debt | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 3 Comments »

Taking Stock: Public Finances Now Stronger in Many Countries

Posted on October 9, 2012 by iMFdirect

By Carlo Cottarelli

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

The slow global recovery is making fiscal adjustment more difficult around the world, but this doesn’t mean that little has been accomplished.

In fact, significant progress in many countries has been made during the past two years in strengthening their fiscal accounts after the 2008–09 deterioration.  The IMF’s latest Fiscal Monitor takes stock of this progress.

Deficits are lower, and in many cases debt is too

Let me first say something about advanced economies, which is where the most urgent fiscal problems exist.

Most advanced economies have made good progress lowering their fiscal deficits (the imbalance between spending and revenues). Deficits, adjusted for the economic cycle, fell by about ¾ of a percentage point of GDP in 2011 and 2012, and are projected to do so by about 1 percentage point of GDP in 2013.

(more…)

Filed under: Advanced Economies, Africa, Annual Meetings, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, Europe, Finance, Fiscal policy, Global Governance, Globalization, growth, IMF, Inequality, International Monetary Fund, Investment, Latin America, Low-income countries, Middle East, Multilateral Cooperation, Politics, Public debt | Tagged: , , , , , , , , , , , | 3 Comments »

Global Economy: Some Bad News and Some Hope

Posted on October 8, 2012 by iMFdirect

By Olivier Blanchard

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

The world economic recovery continues, but it has weakened further.  In advanced countries, growth is now too low to make a substantial dent in unemployment.  And in major emerging countries, growth that had been strong earlier has also decreased.

Let me give you a few numbers from our latest projections in the October World Economic Outlook released in Tokyo.

Relative to the IMF’s forecasts last April, our growth forecasts for 2013 have been revised down from 1.8%  to 1.5% for advanced countries, and from 5.8% down to 5.6% for emerging and developing countries.

The downward revisions are widespread.  They are however stronger for two sets of countries–for the members of the euro area, where we now expect growth close to zero in 2013, and for three of the large emerging market economies, China,  India, and Brazil.

(more…)

Filed under: Advanced Economies, Africa, Annual Meetings, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, Europe, Finance, Financial Crisis, Fiscal policy, Fiscal Stimulus, Global Governance, growth, Inequality, International Monetary Fund, Investment, Latin America, LICs, Low-income countries, Middle East, Multilateral Cooperation, Politics, Public debt | Tagged: , , , , , , , , , , , , , , , , , | 7 Comments »

Tokyo links — IMF-World Bank Annual Meetings

Posted on October 7, 2012 by iMFdirect

The 2012 annual meetings of the IMF and the World Bank are being held this year in Tokyo at a crucial time for the world economy. Track everything through the live events schedule  (all Tokyo times).

Key reports out this week are

banner in Tokyo

Stay up-to-date through timely reports from IMF Survey online, through iMFdirect blog, World Bank Voices, and through regular video briefings and YouTube.  Also track news and commentary through Google +.

Extensive Japanese  (日本語) language content and updates are also available.

The Meetings bring together more than 10,000 central bankers, ministers of finance and development, private sector executives, academics, and journalists to discuss global economic issues and the interconnected world.

Filed under: Advanced Economies, Africa, Annual Meetings, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Europe, Finance, Financial Crisis, Fiscal policy, G-20, Global Governance, Globalization, IMF, International Monetary Fund, Latin America, LICs, Low-income countries, Middle East, Multilateral Cooperation, Politics, Public debt | Tagged: , , , , , , , , , , , , , , , , , , , | 4 Comments »

Resolve and Determination—How We Get Out of This Together

Posted on September 27, 2011 by iMFdirect

By Christine Lagarde

(Versions in  عربي,  中文,  日本語 and Español)

This past weekend, 187 countries came together in Washington D.C. to focus on the economic crisis facing the world.

They were here for the 2011 Annual Meeting of the IMF and World Bank, at which finance ministers and central bank governors mix with businesspeople, civil society, labor leaders, and parliamentarians to discuss the critical issues we face.

Coming in to this Meeting, I had warned of a dangerous new phase now facing the global economy and had called for bold and collective action. Coming out of the Meeting, I feel strongly that the global community is beginning to respond.

Why? Three reasons: a shared sense of urgency, a shared diagnosis of the problems, and a shared sense that the steps needed in the period ahead are now coming into focus. (more…)

Filed under: Advanced Economies, Annual Meetings, Economic outlook, Emerging Markets, growth, IMF, International Monetary Fund, Low-income countries, Multilateral Cooperation | Tagged: , , , , , , , , , , , , , , , , , , , , , , | 71 Comments »

Strong Leadership, Collective Action Key to Economic Recovery

Posted on September 23, 2011 by iMFdirect

By iMFdirect

The 2011 IMF-World Bank Annual Meetings are taking place in Washington DC as the global economy enters a dangerous new phase — financial markets jitters and risks to the recovery are giving everyone plenty to talk about.  Here are our ‘must reads’ for the meetings. (more…)

Filed under: Annual Meetings, Economic outlook, IMF, International Monetary Fund | Tagged: , , , , , , , , , | 4 Comments »

Weak Global Economy Tops Agenda at IMF-World Bank Gathering

Posted on September 19, 2011 by iMFdirect

By iMFdirect

Recent turbulence in financial markets and increased risks in the global economy mean that the 2011 Annual Meetings of the IMF and World Bank are taking place at a critical time for the global economy.

Economic leaders will come together to assess the state of the world economy and discuss the policy actions needed to deal with today’s global economic challenges. The IMF’s updated forecast for the world economy will be published September 20.

About 10,000 policymakers, private sector and civil society representatives, journalists, and academics are expected to attend the Annual Meetings, which are set to take place on September 23–24.

In an interview, Reza Moghadam, Director of the IMF’s Strategy, Policy, and Review Department, discusses the issues that are likely to receive most attention at the meetings. (more…)

Filed under: Advanced Economies, Annual Meetings, Civil Society, Economic Crisis, Emerging Markets, Financial Crisis, IMF, International Monetary Fund, Low-income countries | Tagged: , , , , , , , , , , , , , , , , , , | 4 Comments »

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