Managing Debt Vulnerabilities in Low-Income and Developing Countries

By Tao Zhang

March 22, 2018

Versions in Português (Portuguese)  

Congested streets in Dhaka, Bangladesh. In a third of low-income countries, including Bangladesh, government deficits finance investment in much needed infrastructure (photo: Motoya Taguchi/Jiji Press/Newscom).

Government debt in some of the world’s poorest countries is rising to risky levels, a new IMF report shows. The report looks at economic developments and prospects among the world’s low-income countries, which account for a fifth of the world’s population but only four percent of global output. Continue reading “Managing Debt Vulnerabilities in Low-Income and Developing Countries” »

Addressing the Dark Side of the Crypto World

By Christine Lagarde

March 13, 2018

Versions in  عربي (Arabic),  中文 (Chinese), Français (French),  baˈhasa indoneˈsia (Indonesian),  日本語 (Japanese), Português (Portuguese), Русский (Russian)

The same reason crypto-assets like Bitcoin are so appealing is also what makes them dangerous (iStock by GettyImages).

Whether Bitcoin’s value goes up or Bitcoin’s value goes down, people around the world are asking the same question: What exactly is the potential of crypto-assets?

The technology behind these assets—including blockchain—is an exciting advancement that could help revolutionize fields beyond finance. It could, for example, power financial inclusion by providing new, low-cost payment methods to those who lack bank accounts and in the process empower millions in low-income countries. Continue reading “Addressing the Dark Side of the Crypto World” »

Beware of Strike-it-Rich Euphoria: the Curse of Potential Oil Wealth

By IMFBlog

March 9, 2018

(photo: Nielubieklonu/iStock).

The resource curse, or paradox of plenty, is when countries with an abundance of natural resources suffer stagnant economic growth or even contraction.

In this podcast, World Bank economist James Cust, says the problem of eradicating extreme poverty is going to be about how resource-rich countries manage their resource wealth. Continue reading “Beware of Strike-it-Rich Euphoria: the Curse of Potential Oil Wealth” »

Chart of the Week: China’s Thrift, and What to Do About It

February 26, 2018

By IMFBlog

A pedestrian walks in front of a branch of the Postal Savings Bank of China in Nanjing. China’s saving rate is one of the world’s highest (photo: Imagine China/Newscom).

What makes China’s citizens so thrifty, and why does that matter for China and the rest of the world? The country’s saving rate, at 46 percent of GDP, is among the world’s highest. Households account for about half of savings, with corporations and the government making up the rest.

Saving is good, right? Up to a point. But too much saving by individuals can be bad for society. That’s because the flip side of high savings is low consumption and low household welfare. High savings can also fuel excessive investment, resulting in a buildup of debt in China. And because people in China save so much, they buy fewer imported goods than they sell abroad. That contributes to global imbalances, according to a recent IMF paper, China’s High Savings: Drivers, Prospects, and Policies. The country’s authorities are aware of the issue and are taking steps to address it. Continue reading “Chart of the Week: China’s Thrift, and What to Do About It” »

A Digital-Savvy Indonesia

By Tidiane Kinda and Ting Yan

February 22, 2018

Version in  中文 (Chinese), baˈhasa indoneˈsia (Indonesian)

A salesperson shows a customer the latest smartphones in a showroom in Jakarta, Indonesia: the use of mobile internet services continues to grow rapidly in the country (photo: Beawhiharta/Reuters/ /Newscom).

With the third largest youth population in the world and 130 million active social media users, Indonesia is poised to become the biggest digital economy country in Southeast Asia. To fully embrace the digital opportunity, Indonesia must enhance its infrastructure and increase internet penetration to lift economic growth and productivity.

According to a McKinsey report, digitization could expand Indonesia’s economy by 10 percent of GDP and add 3.7 million jobs by 2025. Continue reading “A Digital-Savvy Indonesia” »

Smartphones Drive New Global Tech Cycle, but Is Demand Peaking?

By Benjamin Carton, Joannes Mongardini, and Yiqun Li

February 8, 2018

 Demand for smartphones is highly cyclical and related to the release of new models (photo: iStock by GettyImages).

Over a decade of spectacular growth, demand for smartphones has created a new global tech cycle that last year produced a new smartphone for every fifth person on earth.

This has created a complex and evolving supply chain across Asia, changing the export and growth performance of several countries. While our recent analysis of Chinese smartphone exports suggests that the global market may be saturated, demand for other electronics continues to support rising semiconductor production in Asia. Continue reading “Smartphones Drive New Global Tech Cycle, but Is Demand Peaking?” »

South Africa’s Lesetja Kganyago: Fintech Is a Central Banker’s Friend

By IMFBlog

January 26, 2018 

Lesetja Kganyago, South Africa’s Central Bank Governor and Chairman of the International Monetary and Financial Committee (photo: IMF staff).

While central bankers are often seen as somewhat traditionalist, South Africa’s Reserve Bank Governor Lesetja Kganyago is breaking that mold. Kganyago sees how new technology—or fintech—is transforming the financial sector, and in this podcast, he says there is no turning back. Continue reading “South Africa’s Lesetja Kganyago: Fintech Is a Central Banker’s Friend” »

Latin America and the Caribbean in 2018: An Economic Recovery in the Making

By Alejandro Werner

January 25, 2018

Versions in Español (Spanish) and Português (Portuguese)

Latin America’s economic recovery is expected to benefit from higher commodity prices (photo: iStock by Getty Images)

Recent trends in the world economy and financial markets are good news for Latin America. Global growth and trade are on an upswing, and we expect the momentum to continue in 2018. Stronger commodity prices have also helped the region rebound. Continue reading “Latin America and the Caribbean in 2018: An Economic Recovery in the Making” »

The Current Economic Sweet Spot Is Not the “New Normal”

By Maurice Obstfeld

January 22, 2018

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

Global growth continues to pick up and is broad based. But no matter how tempting it is to sit back and enjoy the sunshine, policy can and should move to strengthen the recovery (photo: Mumbai, India, Ingram Publishing/Newscom).

As the year 2018 begins, the world economy is gathering speed. The new World Economic Outlook Update revises our forecast for the world economy’s growth in both 2018 and 2019 to 3.9 percent. For both years, that is 0.2 percentage points higher than last October’s forecast, and 0.2 percentage points higher than our current estimate of last year’s global growth. Continue reading “The Current Economic Sweet Spot Is Not the “New Normal”” »

No Roads? No Problem: The Leapfrogging Drones of Rwanda

By IMFBlog

January 12, 2018

Zipline drone on a launch pad at operations center in Muhanda, Rwanda. (photo: James Akena/Reuters/Newscom).

What’s the best solution to a lack of infrastructure? Find a solution that doesn’t require infrastructure. That’s what Zipline has done in Rwanda—a start-up that deploys drones to make emergency medical deliveries to remote hospitals and clinics.

“Obviously in instances where Zipline can make a delivery to a place that wouldn't otherwise be reachable by roads, that's a good example of leapfrogging over the absence of infrastructure,” Zipline CEO Keller Rinaudo said. Continue reading “No Roads? No Problem: The Leapfrogging Drones of Rwanda” »

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