Jobs and Growth: Can’t Have One Without the Other?

Five years after the onset of the Great Recession, 16 million more people are likely to remain unemployed this year than in 2007. This estimate is for a set of countries for which the IMF forecasts unemployment rates; adding in some countries for which the International Labour Organization provides forecasts only boosts the number. The bulk of this increase in unemployed people has been in the so-called advanced economies (the IMF’s term for countries with high per capita incomes).

Arab Countries in Transition Under the Spotlight

Historic transitions in several Arab countries are coming under increasing strain. Domestic uncertainty over the countries’ future course, compounded by the global slowdown and rising oil prices, took a toll on growth in 2011, and the current year will be equally challenging. A joint and sustained effort is needed to help these countries navigate through this challenging period and set out an economic vision that is fair and inclusive.

The Art of Shifting Gear

The fact is, the global outlook underpins any turnaround in Asia and at this point, it could go either way: too early to declare victory over the forces of financial volatility and contagion. The art then is being prepared for either eventuality and policymakers should be ready to shift gears if, and when, circumstances warrant.

Spring Is in the Air in Parts of Latin America

Most of Latin America stands out from much of the rest of the world—not for great economic performance, but for good performance in a subpar environment. Growth is generally solid, despite a slowdown late last year owing to policy tightening and global volatility. Under our baseline scenario, we expect regional growth to moderate to near 3¾ percent in 2012, down from 4½ percent last year (but modestly up from our January projections).

Top Links from the IMF – Global and Regional Economic Analysis for April

The IMF and World Bank have just wrapped up their Spring Meetings for April, dominated by agreement on a huge boost to the anti-crisis firewall to prevent contagion in the event of a flare-up.

Making Goldilocks Happy

We have calculated that an increase in annual long-term economic growth of just a quarter of a percentage point could set in place a virtuous circle that would lead, after ten years, to a decline in the public debt-to-GDP ratio by 6 percentage points. This is because higher growth makes it easier to run a primary surplus and lowers the public debt-to-GDP ratio directly. This in turn lowers the interest rate, which in turn boosts economic growth.

Global Financial Stability: What’s Still To Be Done?

The quest for lasting financial stability is still fraught with risks. The latest Global Financial Stability Report has two key messages: policy actions have brought gains to global financial stability since our September report; but current policy efforts are not enough to achieve lasting stability, both in Europe and some other advanced economies, in particular the United States and Japan.

Mediocre Growth, High Risks, and The Long Road Ahead

Geopolitical tension affecting the oil market is surely a risk. The main risk remains, however, that of another acute crisis in Europe. The building of the “firewalls”, when it is completed, will represent major progress. By themselves, however, firewalls cannot solve the difficult fiscal, competitiveness, and growth issues that some of these countries face. Bad news on the macroeconomic or the political front still carries the risk of triggering the type of dynamics we saw last fall.

Seven Billion Reasons to Worry: the Financial Impact of Living Longer

Everyone wants at some point to stop working and enjoy retirement. In these uncertain economic times, most people worry about their pension. Now take your worries and multiply those several billion times. And the problem is likely bigger still: although living longer, healthier lives is a good thing, how do you afford retirement if you will live even longer than previously thought?

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