Posted on April 29, 2015 by iMFdirect
By Jonathan D. Ostry, Atish R. Ghosh, and Mahvash S. Qureshi
There has been a remarkable increase in financial flows to frontier economies from private sources which, in relation to their economic size, are now on par with those to emerging economies (see chart).
Filed under: Africa, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, growth, IMF, International Monetary Fund, Low-income countries | Tagged: Bangladesh, Brazil, BRICs, capital flows, central bank, China, emerging market, frontier economies, Ghana, India, inflation, interest rates, monetary policy, Russia, U.S. interest rates, Uganda, Zambia | Leave a comment »
Posted on April 17, 2015 by iMFdirect
By Alejandro Werner
(Version in Español and Português)
Economic activity in Latin America and the Caribbean has been cooling down for several years, and the temperature in many places is still falling. Regional growth is now expected to dip below 1 percent in 2015—down from 1.3 percent in 2014. Apart from a short-lived recession during the global financial crisis, this would be the slowest rate of growth since 2002.
However, growth dynamics vary across the region, broadly along North-South lines. While spring may be in the air for Mexico, Central America, and parts of the Caribbean, the economic climate remains decidedly chilly in much of South America. What is behind these divergent prospects, and how can a sunnier outlook be restored to the entire region?
Filed under: Economic outlook, Economic research, Emerging Markets, Financial Crisis, Fiscal policy, growth, IMF, International Monetary Fund, Investment, Latin America, Reform | Tagged: Bolivia, Brazil, Caribbean, Central America, Chile, Colombia, commodiity prices, Ecuador, exchange rate, Latin America, Mexico, oil prices, Peru, Regional Economic Outlook: Western Hemisphere, South America, spillovers, U.S., Venezuela | Leave a comment »
Posted on April 14, 2015 by iMFdirect
By Olivier Blanchard
(Versions in عربي and Español)
In our April 2015 World Economic Outlook, we forecast global growth to be roughly the same this year than last year, 3.5% versus 3.4%. This global number reflects an increase in growth in advanced economies, 2.4% versus 1.8%, offset by a decrease in growth in emerging market and developing economies, 4.3% versus 4.6% last year. In short, to repeat the words used by the IMF Managing Director last week, we see growth as “moderate and uneven”.
Behind these numbers lies an unusually complex set of forces shaping the world economy. Some, such as the decline in the price of oil and the evolution of exchange rates, are highly visible. Some, from crisis legacies to lower potential growth, play more of a role behind the scene but are important nevertheless. Let me briefly review them.
Filed under: Advanced Economies, Annual Meetings, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Globalization, Government, growth, IMF, International Monetary Fund, Investment, Middle East, Reform | Tagged: Brazil, China, euro area crisis, exchange rate, forecast, Greece, India, infrastructure, investment, Japan, Middle East, oil exporters, oil importers, oil prices, Olivier Blanchard, Russia, Ukraine, United States, WEO, World Economic Outlook | Leave a comment »
Posted on February 25, 2015 by iMFdirect
By Martine Guerguil
Does the European Union need closer fiscal integration, and in particular a stronger fiscal center, to become more resilient to economic shocks? A new IMF book, Designing a European Fiscal Union: Lessons from the Experience of Fiscal Federations, published by Routledge, examines the experience of 13 federal states to help inform the debate on this issue. It analyzes in detail their practices in devolving responsibilities from the subnational to the central level, compares them to those of the European Union, and draws lessons for a possible future fiscal union in Europe.
The book sets out to answer three sets of questions: (1) What is the role of centralized fiscal policies in federations, and hence the size, features, and functions of the central budget? (2) What institutional arrangements are used to coordinate fiscal policy between the federal and subnational levels? (3) What are the links between federal and subnational debt, and how have subnational financing crises been handled, when they occurred?
Filed under: Advanced Economies, Economic research, Europe, Financial Crisis, Fiscal, Fiscal policy, growth, IMF, International Monetary Fund, Politics, Public debt | Tagged: Austria, Belgium, book launch, Brazil, Canada, debt, euro area, Europe, European Union, fiscal federation, Germany, Mexico, Spain, Switzerland, United States | Leave a comment »
Posted on January 21, 2015 by iMFdirect
By 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.
Filed under: Advanced Economies, Economic outlook, Economic research, Emerging Markets, Financial Crisis, Fiscal policy, growth, International Monetary Fund, Latin America, Reform | Tagged: Argentina, Bolivia, Brazil, Caribbean, Central America, Chile, China, Colombia, commodi, Ecuador, energy subsidies, euro area, forecast, Japan, Latin America, Mexico, oil, Peru, poverty reduction, Regional Economic Outlook: Western Hemisphere, South America, U.S., Venezuela | 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 »