Posted on April 13, 2011 by iMFdirect
By José Viñals
In various guises, the “Year of Living Dangerously” has been used to describe the global financial crisis, the policy response to the crisis, and its aftermath.
But, we’ve slipped well beyond a year and the financial system is still flirting with danger. Durable financial stability has, so far, proven elusive.
Financial stability risks may have eased, reflecting improvements in the economic outlook and continuing accommodative policies. But those supportive policies—while necessary to restart the economy—have also masked serious, underlying financial vulnerabilities that need to be addressed as quickly as possible. Continue reading
Filed under: Advanced Economies, Emerging Markets, Financial Crisis, Financial regulation, International Monetary Fund | Tagged: asset quality, balance sheets, bank credit, bank restructuring, banking system, capital buffers, capital controls, capital inflows, debt sustainability, financial imbalances, financial sector risk, financial stability, global financial crisis, Global Financial Stability Report, government debt, household indebtedness, macroprudential policies, medium-term fiscal consolidation, overheating, sovereign funding | 5 Comments »
Posted on April 11, 2011 by iMFdirect
By Olivier Blanchard
The world economic recovery is gaining strength, but it remains unbalanced.
Three numbers tell the story. We expect the world economy to grow at about 4.5 percent a year in both 2011 and 2012, but with advanced economies growing at only 2.5 percent, while emerging and developing economies grow at a much higher 6.5 percent.
On the good news side. Earlier fears of a double dip—which we did not share—have not materialized. Continue reading
Filed under: Advanced Economies, Economic Crisis, Economic outlook, Economic research, Emerging Markets, International Monetary Fund, Low-income countries | Tagged: bank recapitalization, capital controls, capital inflows, commodity prices, economic recovery, exchange rate, Financial regulation, financial stability, financial supervision, fiscal consolidation, Fiscal Stimulus, fiscal sustainability, inflation expectations, inventory cycle, macroprudential policies, policy coordination, potential output, private demand, unemployment, World Economic Outlook | 8 Comments »
Posted on December 21, 2010 by iMFdirect
By Nigel Chalk
(Version in 中文)
In the past couple of years, Hong Kong has witnessed a sharp increase in property prices. This has led some to claim that the time has come to change Hong Kong’s “Linked Exchange Rate System”.
This represents a misdiagnosis of the current situation and the wrong prescription for Hong Kong.
It is true that the average cost of an apartment in Hong Kong has risen by almost 20 percent in the past year alone. This stands in stark contrast to what our latest World Economic Outlook described as the dismal outlook for real estate markets in the industrial countries.
And, like many countries in the region, Hong Kong has been the destination for an extraordinary amount of global capital over the past two years.
But how much of these trends have been a product of the exchange rate regime? Continue reading
Filed under: Asia, Economic outlook, 中文 | Tagged: capital inflows, credit risks, exchange rate regime, fixed exchange, Hong Kong, inflation, lending standards, property price bubble, property taxes, safe haven, speculation, transactions costs | 1 Comment »
Posted on November 1, 2010 by iMFdirect
By Anoop Singh
(Version in 日本語)
Of all the things policymakers have had to worry about in the past couple of years, inflation wasn’t one of them. Some even heralded the end of inflation.
Today, inflation still isn’t a ‘problem’ in Asia. For the most part, it remains relatively modest, but it is on the rise in some countries in the region. And understanding what is driving that inflation matters. Policymakers need to consider the sources of inflation in making the right policy choices. What policy tools to choose. Continue reading
Filed under: Asia, Economic Crisis, Economic outlook | Tagged: actual output, capital inflows, commodity prices, core inflation, domestic demand, economic growth, exchange rates flexibility, inflation, interest rates, monetary policy, output gaps, policy stimulus, potential output, Regional Economic Outlook: Asia and Pacific, structural reforms | 2 Comments »
Posted on October 21, 2010 by iMFdirect
By Anoop Singh
I am in Asia this week to launch our October 2010 Regional Economic Outlook: Asia and Pacific (REO) in Jakarta and Singapore. As I have inevitably found during visits to Asia over so many years, the mood here is confident about future economic prospects. Yet it is also watchful for risks that may be lurking over the horizon. This mood matches closely the main messages of our current assessment of the outlook for the region. Continue reading
Filed under: Asia, Economic outlook, IMF, International Monetary Fund | Tagged: capital inflows, currency appreciation, economic recovery, external risks, financial markets, fiscal consolidation, inflationary pressures, macroprudential regulations, monetary tightening, policy stimulus, private domestic demand, Regional Economic Outlook: Asia and Pacific | Leave a comment »
Posted on October 20, 2010 by iMFdirect
By Ajai Chopra
Almost unnoticed, amid the difficulties in western Europe, the other half of the continent has begun to recover from the deepest slump in its post-transition period. The emerging economies in central and eastern Europe will grow by 3¾ percent this year and next—a relief after the 6 percent decline in 2009.
Why was the crisis so severe—and how do we avoid a repeat? We consider just that question in our fall 2010 Regional Economic Outlook: Europe. While the crisis was triggered by external shocks, it is clear that domestic imbalances and policies also played a key role. Continue reading
Filed under: Economic Crisis, Emerging Markets, Europe, Financial Crisis, International Monetary Fund | Tagged: asset price bubbles, balance sheets, bank credit, boom-bust cycle, capital inflows, cooperation, credit boom, economic imbalances, economic rebalancing, emerging Europe, fiscal policy, fixed exchange rates, prudential regulation, regional economic outlook, Regional Economic Outlook: Europe | 12 Comments »
Posted on October 6, 2010 by iMFdirect
By Olivier Blanchard
Achieving a “strong, balanced, and sustained world recovery”—to quote from the goal set in Pittsburgh by the G-20—was never going to be easy. It requires much more than just going back to business as usual. It requires two fundamental and complex economic rebalancing acts.
First, internal rebalancing. When private demand collapsed, fiscal stimulus helped reduce the fall in output. This helped avoid the worst. But private demand must now become strong enough to take the lead and sustain growth, while fiscal stimulus gives way to fiscal consolidation.
The second is external rebalancing. Many advanced countries, most notably the United States, relied excessively on domestic demand before the crisis, and they must now rely more on net exports. Many emerging market countries, most notably China, had relied excessively on net exports, but must now look to domestic demand. Continue reading
Filed under: Advanced Economies, Economic Crisis, Emerging Markets, G-20, growth, Low-income countries, Multilateral Cooperation | Tagged: balanced and sustainable growth, capital inflows, downside risks, economic imbalances, financial reform, fiscal consolidation, Fiscal Stimulus, global financial crisis, IMF World Economic Outlook, monetary accommodation, policy coordination, private domestic demand, private investment, rebalance global economy, sustainable recovery, unemployment | 10 Comments »