Posted on April 24, 2014 by iMFdirect
By Antoinette M. Sayeh
(Version in Français)
Once again, the latest review of growth prospects for sub-Saharan Africa shows that the region’s economy is in strong health. Growth in the region is set to pick up to 5½ percent in 2014 compared to 4.9 percent last year (see Chart 1). My view is that this growth momentum will continue over the medium term if countries rise to new challenges and manage their economies as dexterously as they have over the past decade or so.
So what explains this continued strong growth performance? Apart from good macroeconomic policies in the region, the growth has been underpinned by investment in infrastructure, mining, and strong agricultural output. And favorable global tailwinds—high demand for commodities and low interest rates—have played a major supporting role.
Filed under: Africa, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, Financial Crisis, Français, growth, IMF, International Monetary Fund, Low-income countries, Português | Tagged: China, Democratic Republic of Congo, exports, fiscal policy, infrastructure, investment, Liberia, public finances, Regional Economic Outlook: Sub-Saharan Africa, South Sudan, spillover effects, Sub-Saharan Africa, Zambia | Leave a comment »
Posted on March 20, 2014 by iMFdirect
By Dennis Botman and Zoltan Jakab
(Version in 日本語)
Japan’s economic progress over the past year has been impressive, with strong growth, and inflation, investment, and credit growth all heading in the right direction. But that progress is largely the result of last year’s sizable fiscal and monetary stimulus—the first two arrows of “Abenomics”. Now, the economy needs to transition to more sustainable, private-sector led growth. A hike in wages could be just the push needed to propel that shift.
As the ongoing annual wage-bargaining round draws to a close, total earnings are set to increase this year for employees at some well-known car manufacturers. But, in the past, these increases have not trickled down to higher basic wages at small and medium-sized enterprises and to non-regular workers. This is problematic as higher inflation without higher incomes can hardly be characterized as a successful reform.
Filed under: Advanced Economies, Asia, Economic research, Employment, Finance, growth, International Monetary Fund | Tagged: Abenomics, consumpt, deflation, investment, Japan, wages | Leave a comment »
Posted on March 20, 2014 by iMFdirect
By Paulo Drummond and Estelle Xue Liu
(Version in 中文)
Growing links with China have supported economic growth in sub-Saharan Africa. But the burgeoning commercial and financial ties between the developing subcontinent and the world’s second-biggest economy carry risks as well. These links also expose sub-Saharan African countries to potentially negative spillovers from China if the Asian giant’s growth slows or the composition of its demand changes.
The old aphorism “If America sneezes, the world catches a cold” referred to the U.S. economy’s role as a locomotive for the global economy, but it can now apply to any symbiotic relationship between a dominant economy and its clients. China has become a major development partner of sub-Saharan Africa. It is now the subcontinent’s largest single trading partner and a key investor and provider of aid.
Filed under: Africa, Asia, Economic research, Emerging Markets, Fiscal policy, Globalization, growth, IMF, International Monetary Fund, Low-income countries | Tagged: Angola, China, commodity prices, Congo, Democratic Republic of Congo, Equatorial Guinea, exports, investment, oil exporters, South Africa, Sub-Saharan Africa | Leave a comment »
Posted on February 26, 2014 by iMFdirect
By Jonathan D. Ostry and Andrew Berg
(Version in Español, Français, Português, Русский, 中文)
Rising income inequality looms high on the global policy agenda, reflecting not only fears of its pernicious social and political effects, (including questions about the consistency of extreme inequality with democratic governance), but also the economic implications. While positive incentives are surely needed to reward work and innovation, excessive inequality is likely to undercut growth, for example by undermining access to health and education, causing investment-reducing political and economic instability, and thwarting the social consensus required to adjust in the face of major shocks.
Understandably, economists have been trying to understand better the links between rising inequality and the fragility of economic growth. Recent narratives include how inequality intensified the leverage and financial cycle, sowing the seeds of crisis; or how political-economy factors, especially the influence of the rich, allowed financial excess to balloon ahead of the crisis.
Filed under: Economic research, Employment, Financial Crisis, Financial regulation, Fiscal policy, growth, IMF, Inequality, International Monetary Fund | Tagged: education, income inequality, inequality, investment, research | 5 Comments »
Posted on October 29, 2013 by iMFdirect
By Steven Barnett
(Version in 中文)
Less growth in China today will mean higher income in the future. So rather than worry, we should welcome the slowdown in China’s economy. Why? Because by favoring structural reforms over short-term stimulus, China’s leadership is illustrating their commitment to move to a more balanced and sustainable growth model.
Filed under: Asia, Economic outlook, Economic research, Emerging Markets, Finance, growth, IMF, International Monetary Fund, Public debt | Tagged: China, consumption, government finances, IMF, iMFdirect, investment, reform, sustainable growth, United States | 3 Comments »
Posted on August 8, 2013 by iMFdirect
By Murtaza Syed
(Version in 中文)
Anticipation of the U.S. Federal Reserve’s exit from quantitative easing has dominated headlines in recent weeks. Half a world away, less conspicuously, but no less importantly, China, the globe’s second largest economy, is designing its own policy adjustments: firstly, unwinding the fiscal and monetary stimulus that helped shield it from the Great Recession and lifted global growth (but which also created some vulnerabilities), and secondly transitioning out of a growth model that has generated spectacular growth over the last three decades, but which is now running out of fuel.
Managed well, these twin adjustments would allow China to prolong its economic miracle in a sustainable way, with a significant positive impact for the rest of the world.
Filed under: Asia, Economic Crisis, Emerging Markets, Employment, Finance, Financial Crisis, Fiscal policy, growth, IMF, International Monetary Fund, Public debt | Tagged: China, credit, interest rate-growth differential, investment, Labor, Murtaza Syed, reform | 5 Comments »
Posted on August 5, 2013 by iMFdirect
By Jerry Schiff
(Versions in 日本語l and 中文)
Discussions in Japan of the “three arrows” of Abenomics—the three major components of Prime Minister Shinzo Abe’s economic plan to reflate the economy—are rampant among its citizens as well as economists, journalists and policy-makers worldwide. Even J-Pop groups are recording paeans to the economic policy named after the newly-elected premier. It is clear that “Abenomics” has been a remarkable branding success. But will it equally be an economic triumph?
We think it can be, and initial signs are positive. But such success is not assured. It will require difficult decisions as the country moves into largely uncharted territory. And much will depend on changing expectations within the country.
Filed under: Advanced Economies, Asia, Economic Crisis, Finance, growth, IMF, International Monetary Fund, Public debt | Tagged: Abenomics, Article IV, Bank of Japan, deflation, fiscal policy, growth, IMF, iMFdirect, International Monetary Fund, investment, Japan, monetary policy, public debt, quantitative easing, stimulus | 1 Comment »