Posted on October 9, 2013 by iMFdirect
By Martine Guerguil
(Versions in 中文, Français, 日本語, Русский, and Español)
Five years into the crisis, the fiscal landscape remains challenging. On the positive side, deficit-cutting efforts and the first signs of recovery reduced the fiscal stress felt in many advanced economies; but debt ratios often remain at historical peaks. At the same time, slowing growth and rising borrowing costs, combined with unabated demands for improved public services, puts pressure on government budgets in emerging market economies.
So we created an index of ‘fiscal difficulty’ that shows the biggest challenge ahead for advanced economies is to maintain budget surpluses until debt ratios return to lower levels. We expect this will take several years.
Filed under: Advanced Economies, Economic outlook, Economic research, Emerging Markets, Employment, Finance, growth, International Monetary Fund, Low-income countries, Public debt | Tagged: Asia, budget, debt, deficit, emerging market, Fiscal Monitor, Middle East and North Africa, tax | 1 Comment »
Posted on December 6, 2012 by iMFdirect
By Christine Lagarde
(Version in Español)
Next week, I will travel to Latin America—my second visit to the region since November 2011. I return with increased optimism, as much of Latin America continues its impressive transformation that started a decade ago.
The region remains resilient to the recent bouts in global volatility, and many countries continue to expand at a healthy pace. An increasing number of people are escaping the perils of poverty to join a growing and increasingly vibrant middle class.
Filed under: Economic Crisis, Emerging Markets, Español, Fiscal policy, growth, IMF, Inequality, International Monetary Fund, Latin America, Public debt | Tagged: advanced economies, Asia, business leaders, capital flow management measures, capital flows, Central America, Chile, Civil Society, Colombia, commodity exporters, competitiveness, debt levels, demand, domestic demand, Economics, education, emerging economies, Europe, exports, external financing conditions, financial sector, financial supervision and regulation, fiscal balances, fiscal cliff United States, fiscal consolidation, fiscal policy, global crisis, global risks, growth, high commodity prices, iMFdirect, inequality, infrastructure, International Monetary Fund, Mexico, middle class, monetary policy, policymakers, poverty, productivity, reforms, students, tailwinds, taxes | 5 Comments »
Posted on June 27, 2012 by iMFdirect
Our top links for June, 2012 from iMFdirect blog and others:
Filed under: Advanced Economies, Africa, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, Europe, Finance, Financial Crisis, Fiscal policy, Globalization, growth, Inequality, International Monetary Fund, Investment, Latin America, LICs, Middle East, Multilateral Cooperation, Politics, Public debt | Tagged: Africa, Arab, Asia, Brazil, China, Cote d’Ivoire, debt relief, energy, environment, euro, Facebook, Finance & Development magazine, Google+, green, imbalances, iMFdirect blog, India, inequality, Japan, LICs, Middle East, oil, poor, Top links | 2 Comments »
Posted on May 30, 2012 by iMFdirect
By Anoop Singh
The sharp reduction in China’s current account surplus over recent years has ignited a flurry of speculation about whether the world’s second largest economy has achieved the fundamental, economic rebalancing which many have been pressing for. That is, rebalancing in terms of reduced dependence on exports, and increasing reliance on the domestic market by boosting consumer demand.
My own opinion is that it is too early to say. True, China’s current account surplus fell to around 2.8 percent of gross domestic product in 2011, from a pre-crisis peak of more than 10 percent in 2007. And while the reduction in China’s current account surplus is welcome news, we remain concerned that these changes may not represent a sustained, downward trend.
One possible sign of a durable turnaround in China’s current account surplus would be a pickup in consumption growth but there is little evidence that consumption is rising as a share of GDP.
Filed under: Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, Financial Crisis, Fiscal policy, growth, Inequality, Investment, Politics, Public debt | Tagged: 12th Five Year Plan, Anoop Singh, Asia, China, consumption, current account, d, domestic demand, energy, exports, GDP. World Economic Outlook, iMFdirect, imports, infrastructure, Japan, Korea, machinery, minerals, surplus | 2 Comments »
Posted on April 27, 2012 by iMFdirect
By Anoop Singh
If you needed further evidence about the fallacy of Asia’s economy “decoupling” from that of the developed world, then this month’s Asia and Pacific Regional Economic Outlook would be a good place to look.
The findings in this new report, just released in the Malaysian capital, Kuala Lumpur, illustrate how Asia’s economic fate remains heavily dependent on events far beyond its immediate borders.
Consider two possible future scenarios to illustrate this ongoing interconnectedness: if global prospects continue to brighten following recent, concerted policy actions in the euro area and, if there are further indications of recovery in the United States, this will all augur well for trade-dependent Asia. Against this backdrop, the region could enjoy a boost in demand, fresh capital inflows and even a revival of overheating pressures.
But, were the financial turmoil in the euro area to escalate and spread globally, this would likely result in a sharp fall in demand for Asia’s exports by advanced economies and a possible retrenchment of credit by stressed foreign banks, all of which would be a severe blow to Asia.
Filed under: Advanced Economies, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, Europe, Financial Crisis, Fiscal policy, Globalization, growth, Inequality, International Monetary Fund, Multilateral Cooperation, recession | Tagged: Anoop Singh, ASEAN, Asia, dollar, iMFdirect, India, Kuala Lumpur, Malaysia, People's Bank of China, Spring Meetings, United States, Yi Gang | 2 Comments »
Posted on April 6, 2012 by iMFdirect
By Mauricio Soto
We’re all getting older, and there’s no doubt that pension reform is a hot topic in the advanced economies. But it’s also critical in emerging economies.
Our analysis here at the IMF shows that across emerging economies pension spending is projected to rise as the population ages. On average, these spending increases are not that large. But reforms are needed to increase coverage of the system without making pension systems financially unsustainable over the long term.
In emerging Europe, we’ve seen how pension spending has increased from 7½ to 9 percent of GDP over the past two decades. Spending also increased rapidly in other emerging economies—albeit from much lower levels—going from 2 to 3 percent of GDP over the same period. It seems the relatively low spending in emerging economies outside Europe reflects relatively low coverage (generally only those in the formal sector are eligible) and younger populations.
Populations are aging rapidly in the emerging economies. As illustrated in Chart 1, a rather grim picture is developing where we see that the ratio of elderly to working population will more than double in the next four decades. In the future, there will be many more retirees consuming what fewer workers will produce.
Filed under: Africa, Emerging Markets, Europe, Finance, growth, Inequality, Latin America, Middle East, Public debt | Tagged: Asia, Bulgaria, Chile, Estonia, Hungary, pensions, Poland, retirement, spending | 11 Comments »