August 28, 2017
Much as sailors use nautical charts to determine their location at sea, economists use charts to show who we are, where we are, and where we might be going.
In the Spring, we began our Chart of the Week feature on the blog: snapshots in time and over time of how economies work to help illuminate the uncharted waters ahead for the global economy.
Here are our top five charts of the week, based on readership:
July 24, 2017
The recovery in global growth that we projected in April is on a firmer footing; there is now no question mark over the world economy’s gain in momentum.
As in our April forecast, the World Economic Outlook Update projects 3.5 percent growth in global output for this year and 3.6 percent for next.
The distribution of this growth around the world has changed, however: compared with last April’s projection, some economies are up but others are down, offsetting those improvements. Continue reading “A Firming Recovery” »
July 5, 2017
Nearly sixty years ago, a little-known band called the Beatles arrived in Hamburg, got a haircut, recorded their first song, and found their sound.
Taking a cue from the Fab Four, world leaders gathering for the Group of Twenty Summit this week can make the most of their time in Hamburg—and leave Germany with a sound plan to strengthen global growth.
June 26, 2017
Current account imbalances can be healthy or a sign of macroeconomic and financial stress—which makes their evaluation tricky. In line with its mandate of promoting international monetary cooperation, the IMF conducts annual external assessments for the world’s largest economies. The objective is to alert the global community to potential risks that countries need to address together.
Countries, like households, may spend above their incomes sometimes, and below them at other times. A country that spends above its income imports more goods and services than it exports and is said to have a current account deficit. It finances this deficit by incurring liabilities to the rest of the world, or by borrowing from it. Continue reading “Assessing Global Imbalances: The Nuts and Bolts” »
June 20, 2017
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. Continue reading “Fintech: Capturing the Benefits, Avoiding the Risks” »
June 12, 2017
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.
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. Continue reading “Five Keys to a Smart Fiscal Policy” »
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.