Socrates & the Pope: Overheard at the IMF’s Spring Meetings


By IMFdirect editors

Socrates’ famous method to develop his students’ intellect was to question them relentlessly in an unending search for contradictions and the truth—or at the very least, a great quote.

The method was alive and well among the moderators, panelists and audiences of the IMF’s Spring Meetings seminars that took place alongside official discussions, where boosting high-quality growth, with a focus on the medium term, was at the top of the agenda.  Our editors fanned out and found a couple of big themes kept coming up.  Here are some of the highlights.

Monetary policy 

Lots of people are talking about what happens when the flood of easy money into emerging markets thanks to low interest rates in advanced economies like the United States slows even more than it has in the past year.

At a seminar on fiscal policy the discussion focused on the challenges facing policymakers as central banks slowly exit from unconventional monetary policy and interest rates begin rising.

A live poll of the audience found 63 percent said the global economy remains weak and unconventional monetary policies should remain in place.

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India Can Revive Investment by Learning from Itself


By Laura Papi and Kiichi Tokuoka*

India’s investment,  the main  driver of economic growth in the mid-2000s when the country was growing in excess of 9 percent a year, has been sluggish for the past five years.

Private consumption is growing at a rate comparable to pre-crisis levels, but investment has not regained its strength.

The culprit is corporate investment: its share in GDP has fallen to about 10 percent—4 percentage points lower than that in 2007/08. This is a serious concern as India needs more supply capacity.

Reserve Bank of India (RBI)  Governor Subbarao recently said that India’s “non-inflationary rate of growth is about 7 percent,” down from 8.5 percent before the global financial crisis, suggesting that supply constraints—for example in power, coal, and land—have become increasingly binding.

Many reasons have been put forward to explain the investment malaise.

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India’s Slowdown May Have a Silver Lining


By Roberto Guimarães and Laura Papi

The extent of the recent slowdown in India’s growth rate has surprised most India watchers even in the face of ongoing international financial market volatility, high and volatile oil prices, and the uneven global recovery.

GDP growth fell throughout 2011, from a high of 7.8 percent at the beginning of the year to 6.1 percent in the quarter ending in December. The slowdown in the economy has affected the industrial sector particularly hard and has extended to 2012 as shown by the 3.5 percent contraction (y/y) in March industrial production. For 2012/13, we at the IMF project that GDP growth is likely to be about 7 percent.

While India has been affected by the worldwide slowdown, many observers have started to question the inner strength of the Indian growth story.

By international standards 7 percent growth is still very robust, but it sometimes feels like underachievement for a country that was growing at more than 9 percent just a few years ago.

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Asia and the IMF: Toward a Deeper Engagement


Update: IMF Managing Director Dominique Strauss-Kahn delivered speeches in both Singapore and Beijing. In Singapore he spoke of a leadership role for Asia, while in Beijing he addressed how China is leading the world out of recession and the need for further reform of China’s dynamic economy.

By Anoop Singh

(Version in 日本語)

Asia’s standing and influence continues to grow and the IMF is working with the region to help it meet its full economic potential as it recovers from the global crisis.  In mid-November, the  Managing Director of the IMF, Dominique Strauss-Kahn,  begins a six-day trip to Asia.  First he’s in Singapore attending the 16th Asia-Pacific Economic Cooperation (APEC) Finance Ministers’ Meeting, and then goes on to China November 16-17, one of the region’s most dynamic economies. 

In Singapore, the Managing Director co-chairs a roundtable discussion on economic policy challenges facing the region and will deliver a lecture on the role of Asia in reshaping the post-crisis global economy. In China, he will discuss with the authorities their policy response to the global crisis and ask senior government officials about their outlook for the Chinese and world economies.

The visit is another sign of the importance which the IMF attaches to its relationship with  Asia as the region leads the world away from crisis toward global recovery.  It will also provide Asia and the IMF an opportunity to deepen their engagement.

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