Fintech: Capturing the Benefits, Avoiding the Risks

By Christine Lagarde

June 20, 2017

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

A signboard at a store in Guangzhou, China, lists various forms of mobile payment (photo: Imagine China/Newscom)

When you send an email, it takes one click of the mouse to deliver a message next door or across the planet. Gone are the days of special airmail stationery and colorful stamps to send letters abroad.

International payments are different. Destination still matters. You might use cash to pay for a cup of tea at a local shop, but not to order tea leaves from distant Sri Lanka. Depending on the carrier, the tea leaves might arrive before the seller can access the payment. (more…)

Chart of the Week: A Storm by Any Other Name

By IMFBlog

June 19, 2017

Women look at destruction after Hurricane Matthew struck Haiti ( photo: Patrick Farrell/Miami Herald/TNS)

Hurricane season officially began June 1, and we can expect a busy season of damaging storms in the Atlantic, according to the National Oceanic and Atmospheric Administration’s outlook.

Hurricanes are the leading cause of natural disasters in the Caribbean, making the region one of the most vulnerable in the world. Yet, only 62 percent of disasters caused by hurricanes have recorded data on economic damages, as the information is difficult to collect. (more…)

Two to Tango—Inflation Management in Unusual Times

By Vitor Gaspar, Maurice Obstfeld, and Chang Yong Rhee

June 15, 2017

Versions in  中文 (Chinese), 日本語 (Japanese)

Shinjuku shopping district, Tokyo, Japan. Strong coordination between monetary and fiscal policies can help Japan tackle its low inflation (photo: Nikada/iStock/Getty Images)

Monetary and fiscal policies interact in complex ways. Yet modern institutional arrangements typically feature a strict separation of responsibilities. For example, the central bank targets inflation and smooths business cycle fluctuations, while the fiscal authority agrees to respect its budget constraint and to support financial stability by maintaining the safe asset status of its debt. This gives governments the freedom to pursue a multiplicity of economic and social objectives (in IMF parlance, inclusive growth).

(more…)

The Compact with Africa—The Contribution of the IMF

By Christine Lagarde

June 12, 2017

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

IMF Managing Director Christine Lagarde on a visit to Nigeria in 2016 (photo: IMF staff/Steve Jaffe)

Some of the world’s top policymakers and investors are gathering in Berlin to discuss a new initiative that could help reshape Africa’s economic future.

Millions of citizens could see tangible economic benefits from the recently launched Group of Twenty advanced and emerging economies' initiative, known as the “Compact with Africa.” The goal is to boost private investment by harnessing the expertise and resources of governments, investors, and international organizations.

The Compact is about facilitating projects that can lift productivity and living standards. It is about creating fresh opportunities on a continent where 70 percent of the population is under 35 years of age.

(more…)

Beheading the Hydra: How the IMF Fights Corruption

By Alistair Thomson 

May 18, 2017 

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

Corruption drains public resources and drags down economic growth in multiple ways (photo: dareknie/iStock by Getty Images)

Corruption—the abuse of public office for private gain—is a many-headed monster. It is pervasive in many countries, but only a fraction of cases make headlines; fewer are successfully prosecuted. Yet the cumulative burden is massive. By some estimates, bribery alone amounts to $1 trillion each year, and corruption more broadly to much more. While the precise figures are the subject of debate, the importance of the problem is not. (more…)

Chart of the Week: Conflict’s Legacy for Growth

By IMFBlog

Versions in عربي (Arabic)

May 8, 2017

Conflict has been on the rise since the early 2000s given the wars in Afghanistan, Iraq, and Syria.

 Conflict leads not only to immeasurable human costs, but also to substantial economic losses with consequences that can persist for years. The tragic rise in conflict has weighed on global GDP growth in recent years, given the increasing number of countries experiencing strife, the severe effect on economic activity, and the considerable size of some of the affected economies.

The IMF’s most recent World Economic Outlook (Box 1.1) takes a closer look through the lens of conflict’s impact on economic growth and migration.  (more…)

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

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…)

IMF Spring Meetings 2017: Keeping Growth on Track

By IMFBlog

April 28, 2017

Panelists, including IMF Managing Director Christine Lagarde, discuss global gender challenges.

The world’s economic leaders and stakeholders came together at the 2017 IMF and World Bank Spring Meetings amid a more positive outlook on the global growth, which is forecast to hit its fastest pace in five years. A clear theme running through the meetings was the need to protect the growth momentum, given policy and political uncertainties, and to help ensure that everyone has the opportunity to share in the fruits of global integration and technological progress.

More than 10,000 people took part. In addition to central bankers, finance ministers and other officials, the meetings drew around 650 journalists, 160 parliamentarians from 68 countries, and a record 850 civil society representatives, who gathered to learn, listen, and share their points of view. (more…)

Chart of the Week: Sharing the Fruits of Growth

By IMFBlog

At last week’s Spring Meetings of the IMF and World Bank, economists and policymakers discussed ways to maintain the momentum of the global economic expansion—while also ensuring that the fruits of growth are shared more widely within their countries. Fiscal policy—government’s ability to tax and spend—has an important role to play.

The effectiveness of fiscal policy in mitigating inequality varies widely by country, as seen in our Chart of the Week. The chart shows the redistribution effect of fiscal policy before and after taxes, as measured by the change in the Gini coefficient. A Gini of zero expresses perfect equality, while a Gini of one expresses maximum inequality. (more…)

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