Posted on November 4, 2015 by iMFdirect
By Natalija Novta and Fabiano Rodrigues Bastos
(Versions in Español and Português)
Growth in Latin America and the Caribbean is suffering a double whammy—economic activity has slowed down sharply and the medium-term outlook continues to deteriorate. It is therefore not surprising that policymakers across the region are eagerly searching for ways to revitalize growth.
One answer may be more trade—both within the region and with the rest of the world. Our new study analyzes the export performance in developing and emerging market regions over the past two decades to assess the potential for future export growth in Latin America. We find evidence that most countries in the region “undertrade” compared to what standard models would predict. This has been an entrenched problem for almost a quarter of a century, partly as a result of the region’s geography and a legacy of protectionist policies.
Filed under: Advanced Economies, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Español, Fiscal policy, growth, IMF, International Monetary Fund, Investment, Latin America | Tagged: Argentina, Asia, Brazil, Caribbean, Chile, China, Colombia, Japan, Korea, Latin America, Mexico, oil exporters, Regional Economic Outlook: Western Hemisphere, South America, trade, United States, Venezuela | Leave a comment »
Posted on July 22, 2015 by iMFdirect
By Andre Meier and Fabiano Rodrigues Bastos
(Versions in Español and Português)
Latin America’s recent economic fortunes highlight the region’s closer economic ties with Asia. China, in particular, has grown into a crucial source of demand for Latin American commodities over the past two decades, providing significant gains to the region. The flip side is that the ongoing structural slowdown of Chinese investment is weighing considerably on the prices of those commodities, and the countries that export them.
But Asia can be much more than just a source of episodic windfall gains (and losses) for Latin America. Like a windmill, Asia could help to power a stronger Latin American economy—by providing an example of successful regional trade integration and through greater direct links across the Pacific that benefit both sides. However, securing these benefits will require clear and realistic objectives, a long-term strategy, and attention to the political and social implications of greater economic integration.
Filed under: Advanced Economies, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Finance, Financial Crisis, Fiscal policy, Globalization, growth, IMF, International Monetary Fund, Investment, Latin America | Tagged: Asia, Brazil, Caribbean, Chile, China, foreign direct investment, India, international trade, investment, Japan, Korea, Latin America, Mexico, Peru, trade | Leave a comment »
Posted on April 27, 2015 by iMFdirect
By James Daniel and Rachel van Elkan
Since mid-2014, diversity and divergence—applying to countries’ economic situations, policies and performance—have dominated global economic discussions. Differing economic performance in major advanced countries has led to divergent monetary policies.
Both the Bank of Japan and the European Central Bank have started significant expansions of their balance sheets, while the U.S. Federal Reserve has ended its bond-buying program and is expected to start raising rates. This has had many effects, in particular, contributing to a sharp depreciation of the Yen and the Euro against the U.S. dollar (see chart 1).
Filed under: Asia, Economic Crisis, Economic outlook, Economic research, Europe, Finance, Financial Crisis, Fiscal policy, growth, IMF, International Monetary Fund, Reform | Tagged: Australia, Bank of Japan, capital flows, China, European Central Bank, exchange rate, exports, Hong Kong SAR, India, Indonesia, Japan, Korea, macroprudential policy, Malaysia, monetary policy, New Zealand, Philippines, Singapore, Thailand, trade, U.S. Federal Reserve | Leave a comment »
Posted on July 21, 2014 by iMFdirect
By Min Zhu
(Versions in 中文, Español)
Asia is set to be the powerhouse for growth in the next decade, just as it was in the last one. The size of its economy is expected to expand more rapidly than the other regions of the world, and its share in the world output is expected to rise from 30 percent to more than 40 percent in the coming decade. The structure of the economy is expected to continue to transform from a narrower manufacturing hub to a group of vibrant, diverse and large markets with a rising middle-class population.
The role of the financial sector is critical in the success of this seismic transformation. Let me explain by focusing on three areas:
Filed under: Asia, Emerging Markets, Employment, Finance, Financial Crisis, Financial regulation, Globalization, growth, IMF, Inequality, International Monetary Fund, Investment | Tagged: Asian financial crisis, bond markets, China, financial services, income inequality, India, Indonesia, Japan, Korea, Min Zhu, population aging | Leave a comment »
Posted on June 11, 2014 by iMFdirect
By Min Zhu
(Versions in عربي, Español, 日本語, 中文, Français, and Русский)
House prices are inching up. But is this a cause for much cheer? Or are we watching the same movie again? Recall how after a decade-long boom, house prices started to fall in 2006, first in the United States and then elsewhere, contributing to the 2008-9 global financial crisis. In fact, our research indicates that boom-bust patterns in house prices preceded more than two-thirds of the recent 50 systemic banking crises.
While a recovery in the housing market (Figure 1) is surely a welcome development, we need to guard against another unsustainable boom. Housing is an essential sector of every country’s economy and has systemic implications, which is why we at the IMF are focusing on it not only in individual countries but on a cross-country basis.
Filed under: Advanced Economies, Economic Crisis, Emerging Markets, Financial Crisis, growth, IMF, International Monetary Fund, Investment | Tagged: Article IV, Australia, Belgium, Canada, Estonia, Global House Price Index, Hong Kong, house prices, housing market, income, Ireland, Korea, macroprudential policies, Min Zhu, Norway, Peru, Spain, Sweden, Thailand | Leave a comment »
Posted on May 5, 2014 by iMFdirect
By Romain Duval
(Version in 中文, and 日本語)
In recent decades, trade integration within Asia has increased more than in other regions. In valued-added terms, intraregional trade grew on average by over 10 percent a year from 1990 to 2012, twice the pace seen outside of Asia. Likewise, financial integration within the region has started to catch up, although it still lags behind trade integration. Concomitantly, business cycles in Asia have become steadily more synchronized over the past two decades, with the correlation between ASEAN economies’ growth rates almost reaching the very high levels seen within the Euro Area.
As outlined in the IMF Asia and Pacific Department’s latest Regional Economic Outlook, these facts are related. Namely, increases in trade and financial integration have strengthened the propagation of growth shocks between regional partners, leading Asian economies to move more in lockstep. One driver of this synchronization of business cycles has been the increase in size and connectedness of China’s economy. Looking ahead, we expect regional integration agenda and a bigger China to further increase spillovers and growth co-movement across the region. Greater international cooperation, particularly regional and global financial safety nets, can help countries respond to the associated risk of more synchronized, sharper downturns, and thereby help Asia make the most of greater regional integration.
Filed under: Advanced Economies, Asia, Economic Crisis, Economic research, Emerging Markets, Fiscal policy, growth, IMF, International Monetary Fund, Low-income countries | Tagged: ASEAN, China, euro area, global trade, Korea, Malaysia, Regional Economic Outlook: Asia, spillovers, Taiwan, Thailand | Leave a comment »
Posted on December 6, 2013 by iMFdirect
By Christine Lagarde
(Versions in 한국의 and 中文)
My arrival in Seoul was somewhat delayed when dense fog caused my plane from Phnom Penh to be temporarily diverted from Seoul to Daegu. Still, better late than never! I was delighted to be back in Seoul, capital of one of the world’s most dynamic and innovative economies. Just remember: in a remarkably short period of time, Korea has risen from close to the bottom to close to the top—becoming the thirteenth most prosperous economy with an income per capita that is higher than the European Union average.
With such a track record, Korea plays an increasingly important role on the global stage. It held the annual presidency of the Group of Twenty advanced and emerging economies at the height of the global financial crisis in 2010. It is host to the Green Climate Fund, whose aim is to help developing countries respond to climate change—surely one of the greatest challenges of the 21st century. And it is playing ever increasing leadership roles in other international institutions, including the IMF.
Filed under: Asia, Emerging Markets, Employment, IMF, International Monetary Fund, Low-income countries | Tagged: capacity building, Christine Lagarde, Climate change, Korea, OECD, women | Leave a comment »