Posted on January 22, 2014 by iMFdirect
By Min Zhu
(Version in Français, Русский, 日本語, Português, عربي and 中文)
We had a big debate on emerging markets’ growth prospects at our Annual Meetings in October 2013. We lowered our 2013 growth forecast for emerging markets and developing economies by a whopping 0.5 percentage points compared to our earlier forecast. Some argued that we were too pessimistic. Others said that we should have stuck with the lower-growth scenario we had devised at the onset of the global financial crisis.
Fast forward to today. Indeed, most recent figures indicate that the engines of global growth—emerging markets and developing economies—have slowed significantly. Their growth rate dropped about 3 percentage points in 2013 from 2010 levels, with more than two thirds of countries seeing a decline— Brazil, China, and India lead the pack. This is important for the global economy, since these economies generate half of today’s global economic activity.
In my more recent travels around the world—five regions on three continents—I received the same questions everywhere: what is happening with the emerging markets? Is the slowdown permanent? Can emerging markets boost their growth? What are the downside risks?
Filed under: Annual Meetings, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Financial Crisis, Fiscal policy, Fiscal Stimulus, growth, IMF, International Monetary Fund, Latin America | Tagged: Brazil, central banks, China, commodiity prices, India, Indonesia, interest rates, international trade, Turkey | 1 Comment »
Posted on January 13, 2014 by iMFdirect
By Alexander Culiuc and Kalpana Kochhar
(Versions in Español, Русский, Português, and 中文)
A number of emerging market economies have been on a rollercoaster since the U.S. Federal Reserve announced last May the eventual tapering of its asset purchase program. This is another reminder of how susceptible these economies remain to economic conditions outside their borders.
Much of the market movements to date have been short term in nature. But emerging markets know the end-game – interest rates in advanced economies will eventually go up, reducing the cheap external financing they have benefited from until now. And this is not the only external factor weighing on the growth prospects of emerging markets.
Filed under: Advanced Economies, Economic Crisis, Economic research, Emerging Markets, Financial Crisis, Fiscal policy, growth, IMF, International Monetary Fund, Public debt | Tagged: advanced economies, capital flows, commodiity prices, emerging market economies, exchange rate, inflation, interest rates, World Economic Outlook | 3 Comments »
Posted on August 1, 2011 by iMFdirect
By Ajai Chopra
The U.K. government should be nimble in its policy response if it looks as though the economy is headed for a prolonged period of weak growth, high unemployment, and subdued inflation. Currently, we don’t expect this scenario to happen. But if such a scenario appears to be in prospect, we recommend responding quickly with some combination of further quantitative easing by the Bank of England and temporary tax cuts.
The most likely scenario for the U.K. economy is that it will gradually recover, although it will face continued headwinds from a soft housing market, household and financial sector deleveraging, and ongoing consolidation of the budget. Against this, the economy should get a push from private investment and an increase in exports driven by the global recovery. Labor productivity may also rebound and improve competitiveness.
Led by these forces, the IMF is expecting a bumpy and uneven recovery in the U.K. and our updated growth forecast for the near term, taking into account the recent GDP release for the second quarter, will be published with the September World Economic Outlook. Over the medium term, we expect growth to accelerate gradually to about 2½ percent. Continue reading
Filed under: Advanced Economies, Europe, Fiscal policy, Fiscal Stimulus | Tagged: commodiity prices, competitiveness, exports, fiscal adjustment, housing market, inflation, quantitative easing, tax cuts, unemployment | 8 Comments »