India: Linked or De-linked from the Global Economy?

Posted on October 25, 2011 by iMFdirect

With economic growth expected to continue at a reasonably good clip this year and next, it’s all too easy to think there’s not much to worry about. Even as Diwali celebrations begin across India, the outlook for the world economy is fairly uneven and uncertain. More worrisome than the subdued global growth outlook, risks are building up especially in Europe—and these include an extreme scenario with financial disruption.

Although India’s economy has generally been less prone to external forces than many others, we still need to contend with the larger than typical risks in the global economy. These risks harken the need for a new wave of reforms. What does the more somber darker global outlook mean for India? And exactly what policies are needed?

Filed under: Asia, Economic Crisis, Economic outlook, Emerging Markets, International Monetary Fund | Tagged: , , , , , , , , , , , , , , , , | 4 Comments »

Dealing with Uncertain Economic Times: The Outlook for Asia

Posted on October 13, 2011 by iMFdirect

Recent large equity sell-offs across Asia and safe haven flows into Japan illustrate perfectly the region’s vulnerabilities to further global shocks. While the region’s fundamentals—built up over the past decade—remain relatively strong, economic uncertainties in Europe and the United States pose large downside risks.

The world economy has entered a dangerous new phase and, as the IMF’s Managing Director stated recently, “what makes the situation all the more urgent is that it has implications for every country.”

Our Regional Economic Outlook for Asia and the Pacific emphasizes these risks, and stresses the need for policymakers to remain vigilant and nimble in this extraordinarily uncertain climate. The view from here in Tokyo—looking out at the region—may be more serene than the view from other advanced country capitals, but there are storm clouds on the horizon.

Filed under: Asia, Economic outlook, Emerging Markets, Europe, growth, IMF, Inequality, International Monetary Fund, Low-income countries | Tagged: , , , , , , , , , , , , , , , , , | 1 Comment »

Darn Them Piggies! Pork Prices & the Inflation Outlook for China

Posted on September 11, 2011 by iMFdirect

It was pretty clear to me on a recent visit that China has become one of the biggest global markets for Angry Birds. The game was everywhere and around 100 million Chinese downloads are expected this year. It made me wonder if this was somehow linked to rising concerns over inflation and a way of getting back at those (increasingly expensive) mischievous green pigs.

During the past year, views on China’s economy have yo-yoed from concerns about the recovery, to hand-wringing about inflation and overheating, and then back to talk of hard landing. Inflation peaked in July and was all set to quickly retreat in the latter part of this year.

Unfortunately, just as China appeared to be heading out of the (inflationary) woods, pork happened. An ongoing (and literal) hog cycle caused pork prices to skyrocket. While the hog-cycle will soon turn and the effects should wash out reasonably quickly, the bad news is that the return to more normal times and lower inflation will be postponed once again.

Filed under: Asia, Economic outlook, Emerging Markets, IMF, International Monetary Fund, 中文 | Tagged: , , , , , , , , , , , , , , , , | 2 Comments »

Union Jack: Be Nimble, Be Quick

Posted on August 1, 2011 by iMFdirect

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.

Filed under: Advanced Economies, Europe, Fiscal policy, Fiscal Stimulus | Tagged: , , , , , , , , | 7 Comments »

Blow, Bling and Bucks: IMF Work Against Money Laundering and Terrorist Financing

Posted on June 27, 2011 by iMFdirect

Drug traffickers, diamond smugglers, and terrorists’ financiers around the world have one thing in common: they abuse the financial system to “clean” the proceeds they have obtained from their illegal work, or to transfer funds to achieve their destructive aims. The former is known as money laundering and the latter as terrorist financing.

The IMF has worked with countries to combat money laundering and terrorist financing for over 10 years. With the benefit of all this experience, we decided it was time to consider a new, risk-focused approach to add depth to the way we assess money laundering and terrorist financing.

Filed under: Advanced Economies, Economic Crisis, Emerging Markets, Europe, Financial Crisis, International Monetary Fund | Tagged: , , , , , , , , , , , , , , , | 4 Comments »

Tough Political Decisions Needed to Fix the Financial System

Posted on June 20, 2011 by iMFdirect

It was fitting that I should present our latest assessment of global financial stability in Sao Paulo, the financial center of one of the leading emerging economies. In common with many of its peers in Latin America, Brazil is recovering strongly from the crisis. But new financial stability challenges are emerging in this, and other fast-growing regions.

I have three key messages:

Financial risks have increased since April

Policymakers in both advanced and emerging economies need to step up their efforts to preserve financial stability and safeguard the recovery.

We have entered into a new phase of the crisis – a political phase- when tough political decisions will need to be made. Time is of the essence.

Filed under: Advanced Economies, Emerging Markets, Europe, Financial Crisis, Financial regulation, IMF | Tagged: , , , , , , , , , , , , , , , , | 5 Comments »

Global Growth Hits a Soft Patch

Posted on June 17, 2011 by iMFdirect

Despite a mild slowdown, the global economic recovery continues but the road to health will be a long one. Downside risks, both old and new, are increasing.

Our world forecast is 4.3% growth for 2011, and 4.5% for 2012, so down by 0.1% for 2011, and unchanged for 2012, relative to April. This figure hides very different performances for advanced economies on the one hand, and for emerging and developing economies on the other.

Filed under: Advanced Economies, Economic Crisis, Economic research, Emerging Markets, Employment, Europe, growth, IMF | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 4 Comments »

Inflation in the Middle East—Looking at the Right Numbers

Posted on June 6, 2011 by iMFdirect

Across the world, surging international food prices have become a major cause for concern and topic of debate. This is especially so in the Arab world, which is home to some of the largest food importers and where rising food prices have been one of the factors in recent political unrest.

In the context of ongoing political developments, governments across the region are responding to the rise in commodity prices with hikes in fuel and food subsidies, civil service wage and pension increases, additional cash transfers, tax reductions, and other spending increases. These measures will help poor households maintain their purchasing power and limit further increases in domestic food prices.

Filed under: Economic Crisis, IMF, Inequality, Middle East | Tagged: , , , , , , , , , , | 6 Comments »

A Balanced Debate About Reforming Macroeconomics

Posted on March 22, 2011 by iMFdirect

The most remarkable aspect of the recent conference at the IMF was the broad consensus that the macroeconomic models that had been relied upon in the past and had informed major aspects of monetary and macro-policy had failed. They failed to predict the crisis and they provided limited guidance on how the economy should respond.

There was also remarkable consensus about many elements of policy in responding to the crisis, and there were even large areas of policy consensus for the longer run.

In short, the conference made an important contribution in invigorating a balanced debate about reforming macroeconomics.

Filed under: Economic Crisis, Economic research, Financial Crisis, International Monetary Fund | Tagged: , , , , , , , , , , , , , , , | 15 Comments »

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