Posted on June 24, 2010 by iMFdirect
By Olivier Blanchard and Carlo Cottarelli
(Version in عربي 中文 Français Русский Español)
Advanced economies are facing the difficult challenge of implementing fiscal adjustment strategies without undermining a still fragile economic recovery. Fiscal adjustment is key to high private investment and long-term growth. It may also be key, at least in some countries, to avoiding disorderly financial market conditions, which would have a more immediate impact on growth, through effects on confidence and lending. But too much adjustment could also hamper growth, and this is not a trivial risk. How should fiscal strategies be designed to make them consistent with both short-term and long-term growth requirements?
We offer ten commandments to make this possible. Put simply, what advanced countries need is clarity of intent, an appropriate calibration of fiscal targets, and adequate structural reforms. With a little help from monetary policy, and from their (emerging market) friends.
Filed under: Advanced Economies, Asia, Economic research, Emerging Markets, Financial Crisis, Fiscal Stimulus, growth, International Monetary Fund | Tagged: advanced economies, budgets, China, Europe, fiscal policy, G-20, G-7, Japan, taxation, U.S. Congress, United States, Value-Added Tax | 18 Comments »
Posted on June 15, 2010 by iMFdirect
The new issue of the IMF’s Finance & Development magazine explores how Asia is moving into a leadership role in the world economy. Anoop Singh, Director of the IMF’s Asia and Pacific Department, says that, based on expected trends, within five years Asia’s economy will be about 50 percent larger than it is today and be comparable in size to the economies of the United States and Europe.
The issue looks at Asia’s biggest economy, China, which has relied heavily on exports to grow, and its need to increase domestic demand and to promote global integration if it is to continue to thrive. China is not the only Asian economy that heavily depends on exports and all of them might take some cues from the region’s second-biggest economy, India, which has a highly developed services sector.
Filed under: Asia, Economic Crisis, Emerging Markets, Financial regulation, Fiscal Stimulus, Globalization, International Monetary Fund | Tagged: Anne-Marie Gulde, Anoop Singh, Azim Sadikov, Bas B. Bakker, central banking, China, Dominique Guillaume, Duvvuri Subbarao, Eswar Prasad, Europe, Harald Finger, India, Jang Hasung, Linda Yueh, Markus Brückner, Min Zhu, Mohamed A. El-Erian, Olaf Unteroberdoerster, Rabah Arezki, Randall Dodd, Roman Zytek, Sanjay Kalra, United States, William Poole | 1 Comment »
Posted on June 7, 2010 by iMFdirect
By Masood Ahmed
The global financial crisis has led to mounting stress in the banking systems of most countries in the Caucasus and Central Asia. Private sector credit growth has slowed sharply and even turned negative in real terms in a number of countries, compared with the dramatic increases, ranging from 40 to 80 percent in the period immediately prior to the crisis. The credit slowdown is weighing on economic activity and having policymakers seek ways to restore it, thereby laying the foundation for a resumption in high and sustainable economic growth.
Filed under: Asia, Economic Crisis, Financial Crisis, IMF | Tagged: balance sheets, banking systems, Caucasus, Central Asia, credit growth, currency risk, dollarization, Kazakhstan, nonperforming loans, remittances, Tajikistan | 4 Comments »