Posted on May 6, 2013 by iMFdirect
By Alejandro Werner
(Versions in Español and Português)
Latin America continues to be one of the fastest growing regions in the world, even though growth slowed down a bit in 2012. Many economies in the region are operating at or near potential, inflation remains generally low, and unemployment is at historically low levels.
In the near term, the region will continue to benefit from easy external financing and relatively high commodity prices. In our May 2013 Regional Economic Outlook, we project that the region will expand by about 3½ percent in 2013. In Brazil—the region’s largest economy—economic activity is strengthening, driven by improving external demand, measures to boost investment, and the impact of earlier policy easing. In the rest of Latin America, output growth is expected to remain near potential.
Filed under: Economic Crisis, Economic outlook, Economic research, Finance, growth, International Monetary Fund, Latin America | Tagged: Brazil, capital flows, fiscal consolidation, GDP, inflation, investment, Labor, unemployment | 2 Comments »
Posted on April 2, 2013 by iMFdirect
By Robert Tchaidze and Heiko Hesse
In mid 2010 the Turkish central bank decided to introduce a policy that increased uncertainty in interest rates hoping that would stop foreign investors who were pouring money into the country in search of a quick buck. That’s right. ‘Keep calm and carry on’ was replaced by ‘Keep them guessing.’
The Turkish economy was overheating. Money poured into the country from foreign investors attracted by a strong economy and high yields. A lending boom resulted in excessive growth along with an appreciating exchange rate and widening current account deficit. While evidence of success, these kinds of capital inflows are a headache policymakers would rather avoid, as they expose a country to risks that affect the economy and financial system as a whole, while undermining the objective of controlling inflation.
Filed under: Advanced Economies, Economic research, Employment, Europe, Finance, Fiscal policy, growth, International Monetary Fund | Tagged: central banks, exchange rate, GDP, IMF, iMFdirect, inflation, interest rates, International Monetary Fund, liquidity, macroprudential, monetary policy, Turkey | 1 Comment »
Posted on March 18, 2013 by iMFdirect
By Christine Lagarde
(Version in عربي)
I was in Algiers last week, my first time as the Managing Director of the IMF. It was a good visit: we reaffirmed the special partnership between Algeria and the IMF, and I was able to gain a deeper insight into Algeria’s aspirations—and also its challenges in reaching a hopeful future.
Filed under: Africa, International Monetary Fund | Tagged: Algeria, budget, business leaders, Christine Lagarde, civil society organizations, debt levels, economy, employment, energy, external deficits, gas, grwoth, IMF, iMFdirect, inclusive growth, inflation, International Monetary Fund, jobs, labor market policies, oil, private sector, productivity, subsidies, women, youth unemployment | Leave a Comment »
Posted on February 21, 2013 by iMFdirect
by Laura Papi and Rahul Anand*
So far 2013 has been a breath of fresh air in terms of economic news: financial markets have rallied and economic indicators have started to surprise on the upside. In India, the rupee has strengthened and the Bombay Stock Exchange index (Sensex) crossed the 20,000 mark for the first time in two years. Industrial production has started picking up.
So is India’s growth about to go back to 8-9 percent? The short answer is no. But we need to look back to understand why India’s growth has decelerated to a decade low and why the slump, which has hit investment particularly hard, has persisted for over a year. As structural problems are at the root of the slowdown, so structural reforms must be at the core of the solution.
Filed under: Economic Crisis, Emerging Markets, growth, IMF, International Monetary Fund | Tagged: cash transfers, economic growth, emerging markets, fiscal deficit, fuel subsidy spending, government deficits, IMF, iMFdirect, India, inflation, International Monetary Fund, investment, structural reforms | 1 Comment »
Posted on January 23, 2013 by iMFdirect
by Olivier Blanchard
Version in Español and عربي
Optimism is in the air, particularly in financial markets. And some cautious optimism may indeed be justified.
Compared to where we were at the same time last year, acute risks have decreased. The United States has avoided the fiscal cliff, and the euro explosion in Europe did not occur. And uncertainty is lower.
But we should be under no illusion. There remain considerable challenges ahead. And the recovery continues to be slow, indeed much too slow.
Filed under: Advanced Economies, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Europe, Fiscal policy, growth, IMF, International Monetary Fund | Tagged: banking union, Brazil, capital flows, China, debt, developing economies, emerging economies, euro area, Europe, European Central Bank, financial markets, fiscal cliff, fiscal consolidation, fiscal crisis, fiscal policy, France, Germany, government bonds, government debt and deficits, growth, IMF, iMFdirect, India, inflation, International Monetary Fund, Italy, Japan, Outright Monetary Transactions, Spain, United States, WEO, World Economic Outlook | 5 Comments »
Posted on October 25, 2012 by iMFdirect
By Luis Cubeddu and Sebastián Sosa
(Version in Español)
World food prices are on the rise again owing mainly to global weather-related shocks. This has led to concern that the rise could result in higher inflation and hurt the most vulnerable.
Two points to note are that the recent increase in food prices has been less acute than the two previous episodes (in mid-2008 and early 2011), and features important differences across commodities. For example, while the price of soybeans, corn and wheat are up sharply, coffee and sugar prices are down. Market projections suggest that corn, soy, and wheat prices will stay high through end-2012, but then decline gradually as supply conditions normalize.
Filed under: Africa, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, Fiscal policy, Globalization, growth, IMF, Inequality, Investment, Latin America, Politics | Tagged: Brazil, Caribbean, Central America, coffee, commodities, corn, fertilizer, food prices, iMFdirect, inflation, seeds, South America, Southern Cone, soybeans, sugar, wages, wheat | 2 Comments »
Posted on October 25, 2011 by iMFdirect
By Anoop Singh
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? (more…)
Filed under: Asia, Economic Crisis, Economic outlook, Emerging Markets, International Monetary Fund | Tagged: domestic demand, economic growth, expenditure reform, export diversification, external risks, financial integration, financial shocks, fiscal consolidation, IMF, iMFdirect, inflation, International Monetary Fund, Regional Economic Outlook: Asia, Regional Economic Outlook: Asia and Pacific, spillovers, stock market, transmission channel | 4 Comments »
Posted on October 13, 2011 by iMFdirect
By Anoop Singh
(Versions in 中文, 日本語)
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. (more…)
Filed under: Asia, Economic outlook, Emerging Markets, Europe, growth, IMF, Inequality, International Monetary Fund, Low-income countries | Tagged: credit growth, derivative markets, domestic demand, downside risks, economic rebalancing, external shocks, foreign investors, global demand, iMFdirect, inclusive growth, inflation, infrastructure investment, International Monetary Fund, monetary policy, overheating, Regional Economic Outlook: Asia and Pacific, stressed banks, unemployment | 1 Comment »
Posted on October 5, 2011 by iMFdirect
By Nicolás Eyzaguirre
(Version in Español)
As the European crisis lingers and advanced economies stall, the next six to eighteen months will be challenging for Latin America. Increased global uncertainties may create headwinds for the region—greater stress in the global economy and markets—tailwinds, if the advanced countries’ problems are tackled and economies spring back to life, or volatile gusts—weak growth and continued uncertainty—like we are seeing now.
But it’s not easy to forecast the future of Latin America in these uncertain times, as we discuss in our just-published Regional Economic Outlook for Western Hemisphere. (Here I focus on Latin America, but our report covers the whole region, including North America, Central America, and the Caribbean.)
Today’s global uncertainties are virtually unprecedented. But then again, much of Latin America is stronger today than in past decades. (more…)
Filed under: Economic outlook, Economic research, International Monetary Fund, Latin America | Tagged: commodity prices, current account deficits, financial market turbulence, financial risks, financial system, fiscal consolidation, global financial markets, government budgets, iMFdirect, inflation, International Monetary Fund, liquidity, monetary policy, Regional Economic Outlook: Western Hemisphere | 5 Comments »
Posted on September 11, 2011 by iMFdirect
By Nigel Chalk
(Version in 中文)
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.
Certainly inflation has been a key feature of the environment this year in China and one should pay close attention to it. Rising inflation is a crucial social concern and takes a heavy toll on household incomes that are already struggling to keep up with economic growth. (more…)
Filed under: Asia, Economic outlook, Emerging Markets, IMF, International Monetary Fund, 中文 | Tagged: asset price inflation, bottlenecks, China, excess labor, food inflation, food price shocks, food prices, IMF, iMFdirect, inflation, International Monetary Fund, Macroeconomic policies, overheating, pork prices, property prices, skills gaps, surplus labor | 2 Comments »