Uncertain Times, Difficult Choices

By Vitor Gaspar and Alejandro Werner              

(Versions in Español and Português)                                         

Latin America under stress

After a period of strong growth, economic activity in Latin America has slowed sharply. Growth among the six larger, financially-integrated economies—Brazil, Chile, Colombia, Mexico, Peru, and Uruguay—is expected to be negative this year. With heightened financial market pressures and limited policy space, the credibility of policy makers is being seriously tested. In this challenging environment, policy-makers in these six countries face some difficult questions: how to strike the right balance between smoothing the adjustment and strengthening credibility? What role should fiscal policy play in this new, uncertain and rapidly evolving environment?

These and other questions will be addressed at the Annual Meetings in Lima, Peru next week.  As we prepare for these meetings, we offer our thoughts on some of the pressing issues for Latin America.

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The Road to Lima: Paved with Blogs

By iMFdirect

This year’s IMF Annual Meetings are going on the road…to Lima, Peru.  All the big debates will focus on economics, finance, inequality, financial inclusion, emerging markets, commodities and many more.

Since you’ve been reading gossip magazines at the beach busy this summer, we thought you might like a handy refresher on some of our blogs in recent months about Latin America.

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A Watershed Moment for Latin America: Nine Takeaways from our High-Level Conference

Alejandro WernerBy Alejandro Werner

(Versions in Español and Português)

Latin America has reached a critical moment. So much better off than two decades ago, and still facing deep-seated problems that get in the way of sustained strong growth and economic development. To better understand these problems from countries’ perspectives, and explore ways the IMF and others can help address them, we brought together experts from the region and beyond—central bankers, finance ministers, and academics—for a high-level conference in Washington, D.C. earlier this week.

Under the theme of “Rising Challenges to Growth and Stability,” participants engaged in lively debates about the current difficulties facing Latin America and the policy priorities for now and the future.

Here are my main takeaways from the event:

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Tharman Sees “Greater Global Policy Resolve”

“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:

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Resolve and Determination—How We Get Out of This Together

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. Continue reading

Weak Global Economy Tops Agenda at IMF-World Bank Gathering

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. Continue reading

Weekend in Washington: Cooperating Our Way Out of Crisis

By Dominique Strauss-Kahn

(Version in عربي 中文 Español Français 日本語 Русский )

This past weekend in Washington DC, as the economic leaders of 187 countries gathered for the Annual Meetings of the IMF and World Bank, the mood was tense. The world’s finance ministers and central bank governors were concerned because the global recovery is fragile. And uneven. And it is fragile because it is so uneven.

In the emerging markets of Asia, Latin America, and the Middle East, things are going pretty well. Even in Africa, many countries have returned to growth much faster than in previous recessions. In Europe, however, the recovery is sluggish. And in the United States, it remains subdued. The IMF’s latest economic outlook, released during the meetings, does not anticipate a “double dip.” But there are risks. Continue reading


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