Posted on December 16, 2014 by iMFdirect
By Min Zhu
(version in Español)
The growth story for frontier economies isn’t the same as China’s in the last two decades, or the United States a hundred years ago. These fast growing, low-income countries have their own story, and it’s not what you might think.
In May of this year, I wrote about who they are and how they are different, and now I want to go into a bit more detail about how their economies have been on the rise and how they have moved themselves to the frontier.
Filed under: Advanced Economies, Africa, Asia, Economic outlook, Economic research, Fiscal policy, growth, IMF, International Monetary Fund, LICs, Low-income countries, Reform | Tagged: agriculture, Bangladesh, capital markets, China, commodiity prices, diversify growth, fiscal policy, frontier economies, low-income countries, manufacturing, Min Zhu, monetary policy, Mozambique, natural resources, oil prices, Tanzania, United States | Leave a comment »
Posted on December 15, 2014 by iMFdirect
By Gregorio Impavido and Uffe Mikkelsen
(Version in Türk)
Turkey is going through a time of economic transition, with slowing growth that risks the country being caught in a “middle-income trap,” unable to join the ranks of high income economies.
The country grew at 6 percent per year on average in the period 2010-13, with policies supportive of domestic consumption. This has generated a large current account deficit, mostly financed by short-term capital flows. The reliance on consumption at the expense of investment, slow export growth, and sizable investment needs have hurt potential growth, with the economy already growing more modestly. Moreover, Turkey’s low domestic savings and competitiveness challenges have limited investment as well as exports, which have also suffered from the slow growth in Europe.
With current policies, Turkey’s economy is expected to grow only 3.5 percent annually over the next five years. Going forward, the economy must be rebalanced to make it more competitive and to restore output and employment growth.
Filed under: Economic outlook, Economic research, Employment, Europe, Finance, Financial Crisis, Fiscal policy, growth, IMF, International Monetary Fund, Investment, Public debt, Reform | Tagged: Article IV, banking sector, economic rebalancing, Europe, fiscal policy, inflation, Macroeconomic policies, middle income countries, savings, Turkey | Leave a comment »
Posted on December 10, 2014 by iMFdirect
By Min Zhu
(Versions in 中文)
For the past decade, house prices have steadily increased in the vast majority of the 30 countries that make up the IMF’s House Price Index for Emerging Markets released today at a conference organized by the IMF and the Indian Institute of Management in Bangalore, India (Figure 1).
The index shows a lull in the aftermath of the global financial crisis, followed by an increase for nine consecutive quarters since 2012. This run-up—four times as fast as that in advanced economies—would be even more pronounced if the larger countries in the group such as China and India receive greater weight in the index.
Filed under: Advanced Economies, Asia, Economic outlook, Economic research, Emerging Markets, Financial Crisis, growth, IMF, International Monetary Fund, Investment | Tagged: China, credit, emerging market, Global House Price Index, house prices, housing market, India, macroprudential policies, Microprudential regulations, Min Zhu, monetary policy, public-private partnerships | Leave a comment »
Posted on December 2, 2014 by iMFdirect
By Christine Lagarde
(version in Español and Português)
I am looking forward to being in Peru this week to discuss economic and social developments with the government and a wide range of stakeholders—and also to follow up on the preparations for the next IMF–World Bank Annual Meetings, which will be held in Lima in October 2015. Later this week, I will participate in the Santiago Conference in Chile, where I will meet policymakers and influential representatives from Latin America and the Caribbean to discuss economic approaches to strengthen the entire region.
As I travel to the land of the Andes, I am reminded of the natural beauty of the region, the richness of its culture, and its incredible diversity. Despite its current challenges—growth continues to slow, as global economic and financial conditions are shifting and economies run up against capacity limits—I remain decidedly optimistic about the region’s potential to raise living standards while protecting its unique heritage and precious environment.
Filed under: Economic outlook, Emerging Markets, Español, Finance, Fiscal policy, Globalization, Government, growth, IMF, International Monetary Fund, Latin America, Reform | Tagged: Caribbean, Chile, Christine Lagarde, commodiity prices, conference, education, health care, inequality, infrastructure, Latin America, Peru, poverty, youth | Leave a comment »
Posted on November 26, 2014 by iMFdirect
By Olivier Blanchard, Luc Laeven, and Esteban Vesperoni
The last five years have been a reminder of the importance of interconnections and risks in the global economy. They have triggered intense discussions on the optimal way to combine fiscal, monetary, and financial policies to deal with spillovers, and on the need and the scope for coordination of such policies.
The IMF’s 15th Jacques Polak Annual Research Conference, which took place in Washington DC on November 13 and 14, 2014, focused on Cross-Border Spillovers, and took stock of what we know and do not know. The summary below picks and chooses some papers, and does not do justice to the full set of papers presented and discussed at the conference. They can all be downloaded, and videos of each session are available, at www.imf.org/external/np/res/seminars/2014/arc.
Filed under: Advanced Economies, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Europe, Finance, Financial Crisis, Fiscal, Fiscal policy, G-20, Globalization, growth, IMF, International Monetary Fund, Politics | Tagged: banks, capital flows, European Central Bank, exchange rate, Federal Reserve, fiscal policy, G-20, global economy, global trade, IMF Annual Research Conference, Italy, monetary policy, Olivier Blanchard, public spending, Spain, spillovers, unconventional monetary policy, United States | Leave a comment »
Posted on November 11, 2014 by iMFdirect
By Bertrand Gruss and Fabiano Rodrigues Bastos
(version in Español and Português)
China is still a distant and exotic country in the mind of many people in Latin America. Yet, with the Asian giant rapidly expanding its ties with the region (the share of exports going to China is now ten times larger than in 2000), their economic fates seem to be increasingly connected. And in fact, a sharper slowdown in China now represents one of the key risks Latin Americans should be worried about—and prepare for. So, what is at stake? How much do shocks to China matter for economies in Latin America?
In an earlier study presented in our April 2014 Regional Economic Outlook, we analyzed growth spillovers in a large model of the global economy, focusing on the link through commodity prices. Here, we complement that analysis by using a simple yet novel approach that exploits the reaction of financial markets to the release of economic data. We find that growth surprises in China have a significant effect on market views about Latin American economies.
Filed under: Advanced Economies, Asia, Economic outlook, Economic research, Emerging Markets, Español, Globalization, growth, IMF, International Monetary Fund, Investment, Latin America, Politics | Tagged: Brazil, Chile, China, Colombia, commodiity prices, exchange rate, Finance & Development magazine, financial market, fiscal policy, Latin America, Mexico, Peru, Poland, Regional Economic Outlook: Western Hemisphere, spillovers, Turkey | Leave a comment »
Posted on November 7, 2014 by iMFdirect
By Evan Papageorgiou
When the U.S. Federal Reserve first mentioned in 2013 the prospect of a cutback in its bond buying program, markets had a “taper tantrum.” Many emerging markets saw large increases in volatility, even though outflows from their domestic markets were small and short-lived. Now the Fed has ended its bond buying and is looking ahead to rate hikes, and portfolio flows continue to arrive at the shores of emerging market economies. So everything’s fine, right? Not quite.
In our latest Global Financial Stability Report, we show that the large concentration of advanced economy capital invested in emerging markets acts as a conduit of shocks from the former to the latter.
Filed under: Advanced Economies, Economic outlook, Economic research, Emerging Markets, Fiscal policy, International Monetary Fund, Investment | Tagged: bonds, Brazil, Chile, Colombia, emerging market, euro area, Germany, Global Financial Stability Report, government bond, Hong Kong, Hungary, Indonesia, interest rates, investment, Ireland, Israel, Japan, Malaysia, Mexico, Netherlands, Philippines, Poland, Russia, South Africa, Thailand, Turkey, U.S. Federal Reserve, United Kingdom, United States | Leave a comment »