How Can Egypt Achieve Economic Stability and Better Living Standards Together?


Chris JarvisBy Christopher Jarvis

(Version in عربي)

Egypt currently faces what may seem to be conflicting objectives. On the one hand, there’s an urgent need to restore economic stability—by achieving lower budget deficits, public debt and inflation, and adequate foreign exchange reserves. At the same time, there’s a long-standing need to achieve better standards of living—with more jobs, less poverty, and better health and education systems—one of the key reasons why people took to the streets in 2011.

Some might think that those two goals don’t go together—that the actions needed to reduce the budget and external deficits will necessarily take away from jobs and growth. But that’s not true. Some of the same policies that will improve Egypt’s financial situation can also help improve living standards.

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Disinflation in EU Countries outside the Eurozone


By Plamen Iossifov and Jiri Podpiera

Inflation has been falling sharply across Europe since 2012 (see Charts 1 and 2). Across Central and Eastern Europe (CEE), inflation expectations have also drifted down especially among countries who peg their currencies to the euro (Bulgaria, Croatia, as well as Lithuania, which adopted the euro on January 1, 2015), but also in those that target their inflation rate (the Czech Republic, Hungary, Poland, and Romania).

The recent drop in world oil prices has re-ignited the debate about good vs. bad disinflation. For the euro area, risks from low inflation have been discussed in the March 2014 iMFdirect post. Our blog examines the causes and potential consequences of falling inflation from the perspective of EU countries outside the euro zone.

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A Big Step Forward for Bolstering Financial Inclusion


By David Marston, Era Dabla-Norris, and D. Filiz Unsal

(version in Español)

Economists are paying increasing attention to the link between financial inclusion—greater availability of and access to financial services—and economic development. In a new paper, we take a closer look at exactly how financial inclusion impacts a country’s economy and what policies are most effective in promoting it.

The new framework developed in this paper allows us to identify barriers to financial inclusion and see how lifting these barriers might affect a country’s output and level of inequality.  Because the more you know about what stands in the way of financial inclusion, the better you can be at designing policies that help foster it.

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What’s not to love about free data


By iMFdirect

The IMF has released a new, free online data tool.

You can find all sorts of good stuff: from budget numbers to balance of payments data, debt statistics to critical global indicators.  Good data supports good policy choices. With reliable and timely economic data, people can identify turning points in the economy or see looming risks.

*Wonky Warning* The data platform provides greater dynamic data visualizations, which show development over time and interact with each other. It includes a richer library of statistical tools, such as forecasting, smoothing, and aggregation. The platform strengthens the narrative and analysis of any data and allows users to customize their data experience.

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Learning to Live with Cheaper Oil in the Middle East


masood-ahmedBy Masood Ahmed

(Version in عربي)

The steep decline in global oil prices, by 55 percent since last September, has changed the economic dynamics of oil exporters in the Middle East and North Africa. Our update of the Regional Economic Outlook, released yesterday, shows that these countries are now faced with large export and government revenue losses, which are expected to reach about $300 billion (21 percent of GDP) in the Gulf Cooperation Council and about $90 billion (10 percent of GDP) in other oil-exporting countries.

Where prices will eventually settle is, of course, uncertain, making it hard for policymakers to gauge how much of the bane is temporary in nature and what share of it they should expect to last.

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(Yet) Another Year of Subpar Growth: Latin America and the Caribbean in 2015


Alejandro WernerBy Alejandro Werner

(version in Español and Português)

The turn of the year usually brings a fresh dose of optimism. Yet, worries dominate across much of Latin America and the Caribbean today, as 2015 marks yet another year of reduced growth expectations. Regional growth is projected at just 1¼ percent, about the same low rate as in 2014 and almost 1 percentage point below our previous forecast. Challenging external conditions are an important drag for many countries. Still, it’s not too late for some good New Year’s resolutions to address domestic weaknesses and improve growth prospects.

Werner blog.chart 1 Continue reading

Global Economy Faces Strong and Complex Cross Currents


WEOBy Olivier Blanchard

(version in Español)

The world economy is facing strong and complex cross currents.  On the one hand, major economies are benefiting from the decline in the price of oil.  On the other, in many parts of the world, lower long run prospects adversely affect demand, resulting in a strong undertow.

We released the World Economic Outlook Update today in Beijing, China. The upshot for the global economy is that while we expect stronger growth in 2015 than in 2014, our forecast is slightly down from last October.  More specifically, our forecast for global growth in 2015 is 3.5%, 0.3% higher than global growth in 2014, but 0.3% less than our forecast in October. For 2016, we forecast 3.7% growth, again a downward revision from the last World Economic Outlook.

At the country level, the cross currents make for a complicated picture. Good news for oil importers, bad news for exporters. Good news for commodity importers, bad news for exporters. Continuing struggles for the countries which still show scars of the crisis, not so for others. Good news for countries more linked to the euro and the yen, bad news for those more linked to the dollar. In short, many different combinations, many different boxes, and countries in each box.

Let me expand a bit on some of these themes.

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