Emerging Economy Consumers Drive Infrastructure Needs

2017-05-18T14:53:05+00:00May 4, 2017|

By Paolo Mauro

May 4, 2017

Versions in 中文 (Chinese), Français (French), 本語 (Japanese), Русский (Russian), and Español (Spanish)

The infrastructure needs of emerging market economies, like China or India, differ from those of advanced economies like the United States or Germany. Many emerging economies must substantially expand their energy and transportation networks, or build them from scratch, to accommodate rapid economic growth. Our research shows the more people make, the more they spend on transportation. With emerging economies’ middle classes booming and incomes rising, this has big implications for how policymakers choose to invest in infrastructure. (more…)

Chart of the Week: The Cost of Asia’s Aging

2017-05-04T18:29:32+00:00May 1, 2017|

By IMFBlog

May 1, 2017

Versions in 中文 (Chinese), Bahasa (Indonesia), and 本語 (Japanese) 

When it comes to tackling demographic change in Asia, there’s no one-size-fits-all strategy for policymakers. In some countries, like Japan, the population is aging rapidly, and the labor force is shrinking. In others, like the Philippines, young people are flooding the job market in search of work.

As our chart shows, the impact of aging could potentially drag down Japan’s average annual GDP growth by 1 percentage point over the next three decades. While in India and the Philippines, which have some of the youngest populations in the region, a growing workforce could potentially increase GDP by that same amount. (more…)

Five Keys to a Smart Fiscal Policy

2017-05-09T17:29:47+00:00April 19, 2017|

By Vitor Gaspar and Luc Eyraud

Versions in عربي (Arabic), 中文 (Chinese), Français (French), 日本語 (Japanese), Русский (Russian), and Español (Spanish)

We live in a world of dramatic economic change. Rapid technological innovation has fundamentally reshaped the way we live and work. International trade and finance, migration, and worldwide communications have made countries more interconnected than ever, exposing workers to greater competition from abroad. While these changes have brought tremendous benefits, they have also led to a growing perception of uncertainty and insecurity, particularly in advanced economies.

Today’s conditions require new, more innovative solutions, which the IMF calls smart fiscal policies. By smart policies we mean policies that facilitate change, harness its growth potential, and protect people who are hurt by it. At the same time, excessive borrowing and record levels of public debt have limited the financial resources available to government. So, fiscal policy must do more with less. Fortunately, researchers and policy makers are realizing that the fiscal tool kit is broader and the tools more powerful than they thought. Five guiding principles sketch the contours of these smart fiscal policies, which are described in chapter one of the IMF’s April 2017 Fiscal Monitor. (more…)

Global Economy Gaining Momentum—For Now

2017-04-21T20:39:52+00:00April 18, 2017|

By Maurice Obstfeld

Versions in عربي (Arabic), 中文 (Chinese), Français (French), 日本語 (Japanese), Русский (Russian), and Español (Spanish)

Momentum in the global economy has been building since the middle of last year, allowing us to reaffirm our earlier forecasts of higher global growth this year and next. We project the world economy to grow at a pace of 3.5 percent in 2017, up from 3.1 percent last year, and 3.6 percent in 2018. Acceleration will be broad based across advanced, emerging, and low-income economies, building on gains we have seen in both manufacturing and trade.

Our new projection for 2017 in the April World Economic Outlook is marginally higher than what we expected in our last update. This improvement comes primarily from good economic news for Europe and Asia, as well as our continuing expectation for higher growth this year in the United States.

(more…)

Chart of the Week: Seeking Solutions to Growing Inequality

2017-05-01T20:51:17+00:00April 17, 2017|

By IMFblog

As finance ministers and central banks gather in Washington this week for the spring meetings of the IMF and World Bank, income inequality will be among the topics of discussion.

While global economic integration has brought enormous benefits in the form of rising living standards, it has also contributed to widening inequality within some countries. In advanced economies, the incomes of the top 1 percent have grown three times faster than those of the rest of the population over the past three decades. (more…)

Services Exports Open a New Path to Prosperity

2017-04-22T14:38:46+00:00April 5, 2017|

By Prakash Loungani, Chris Papageorgiou, and Ke Wang

Versions in 中文 (Chinese), Français (French), 日本語 (Japanese), and Русский (Russian)

Services, which already account for 50 percent of world income and 70 percent of employment, are also becoming an important part of international trade. Services exports—accounting for nearly one fourth of total exports—have come to play a central role in the global economy, thanks in large part to advances in technology. (more…)

Chart of the Week: Slowing Productivity: Why It Matters and What To Do

2017-04-12T15:53:53+00:00April 3, 2017|

By IMFBlog

Output per worker and total factor productivity have slowed sharply over the past decade in most advanced economies and many emerging and developing countries.

Even before the global financial crisis, productivity growth showed signs of slowing in many advanced economies. But in the aftermath of the crisis, there was a further, abrupt deceleration. (more…)

Chart of the Week: Global House Prices—Where Is the Boom?

2017-04-12T15:55:09+00:00March 27, 2017|

By IMFBlog

Versions in عربي (Arabic), 中文 (Chinese), Français (French), Русский (Russian), and Español (Spanish)

While house prices around the world have rebounded over the last four years, a closer look reveals that this uptick is dependent on three things: location, location, location.

The IMF’s Global House Price Index—an average of real house prices across countries—has been rising for the past four years. However, house prices are not rising in every country. As noted in our November 2016 Quarterly Update, house price developments in the countries that make up the index fall into three clusters: gloom, bust and boom, and boom(more…)

Chart of the Week: Inequality and the Decline in Labor Share of Income

2017-04-14T00:33:09+00:00March 20, 2017|

By IMFBlog

As discussed in the IMF’s G20 Note, and a blog last week by IMF Managing Director Christine Lagarde, a forthcoming chapter of the World Economic Outlook seeks to understand the decline in the labor share of income (that is, the share of national income paid in wages, including benefits, to workers) in many countries around the world. These downward trends can have potentially large and complex social implications, including a rise in income inequality.  (more…)

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