Metals and Oil: A Tale of Two Commodities

By Rabah Arezki and Akito Matsumoto

(Version in Español)

“It was the best of times, it was the worst of times.” With these words Charles Dickens opens his novel “A Tale of Two Cities”. Winners and losers in a “tale of two commodities” may one day look back with similar reflections, as prices of metals and oil have seen some seismic shifts in recent weeks, months and years.

This blog seeks to explain how demand — but also supply and financial market conditions — are affecting metals prices. We will show some contrast with oil, where supply is the major factor. Stay tuned for a deeper analysis of the trends in a special commodities feature, which will be included in next month’s World Economic Outlook.

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Olivier Blanchard’s Greatest Hits

By iMFdirect

For a man who declared on his arrival at the IMF “I do not blog,” Olivier Blanchard, our soon-to-be former Chief Economist, is one hell of a blogger.

Prolific and popular. A demi-god: half economist, half artist.  Blanchard writes the way he thinks: sharp, frank, and intellectual, while pushing against the edges of his métier with the creativity and honesty of a singular economist.

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Russia Feeling The Pinch of Cheaper Oil, Sanctions

By iMFdirect

Ever wonder to what extent Russia depends on oil revenues—and what happens to such an economy when crude prices fall by half? Or what the tangible effects are of sanctions when a country falls out of favor with its trading partners?
Well the IMF’s latest annual assessment of Russia’s economy shows cheap oil and sanctions together have helped drag the country into a recession.

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Flash Crashes and Swiss Francs: Market Liquidity Takes a Holiday


By José Viñals

Financial market liquidity can be fleeting. The ability to trade in assets of any size, at any time and to find a ready buyer is not a given.  As discussed in some detail last fall in this blog, a number of factors, including the evolving structure of financial markets and some regulations appear to have pushed liquidity into a new realm: markets look susceptible to episodes of high price volatility where liquidity suddenly vanishes.

In our April 2015 Global Financial Stability Report we identify a new aspect to the problem:  asset price correlations have risen sharply in the last five years across all major asset classes (see figure). Continue reading

Global Energy Subsidies Are Big—About US$5 Trillion Big

By Sanjeev Gupta and Michael Keen

(Versions in 中文, Français, 日本語Русский and Español)

In their blog, Ben Clements and Vitor Gaspar make the points that global energy subsidies are still very substantial, that there is a strong need for reform in many countries, and that now is a great time to do it. This blog sets out what we mean by “energy subsidies,” provides details on their estimation, and explains how they continue to be high despite the recent drop in international energy prices (Chart 1).


Our latest update of global energy subsidies shows that “pre-tax” subsidies—which occur when people and businesses pay less than it costs to supply the energy—are smaller than a few years back. But “post-tax” subsidies—which add to pre-tax subsidies an amount that reflects the environmental, health and other damage that energy use causes and the benefit from favorable VAT or sales tax treatment—remain extremely high, and indeed are now well above our previous estimates.

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Tolstoy & Billionaires: Overheard at the IMF’s Spring Meetings

By iMFdirect editors

All happy countries are alike; each unhappy country is unhappy in its own way.

This twist on Tolstoy’s Anna Karenina echoed through the seminars during the IMF’s Spring Meetings as most countries, while recovering, are struggling with the prospect of lower potential growth and the “new mediocre” becoming a “new reality.”

Our editors fanned out to cover what officials and civil society had to say about how to help countries pave their own path to happiness.

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Northern Spring, Southern Chills: Outlook for Latin America and the Caribbean

Alejandro WernerBy Alejandro Werner

(Version in Español and Português)

Economic activity in Latin America and the Caribbean has been cooling down for several years, and the temperature in many places is still falling. Regional growth is now expected to dip below 1 percent in 2015—down from 1.3 percent in 2014. Apart from a short-lived recession during the global financial crisis, this would be the slowest rate of growth since 2002.

However, growth dynamics vary across the region, broadly along North-South lines. While spring may be in the air for Mexico, Central America, and parts of the Caribbean, the economic climate remains decidedly chilly in much of South America. What is behind these divergent prospects, and how can a sunnier outlook be restored to the entire region?

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