Central, Eastern, and Southeastern Europe: Harnessing the Power of Good Governance

By Poul Thomsen

July 27, 2017

Dubrovnik, Croatia. Countries in the region should continue working on good governance for higher growth (photo: Album/Prisma/Newscom)

In many ways, Central, Eastern, and Southeastern Europe is an incredible success story. In less than a generation, countries moved from centrally-planned economies to market-based ones—transforming their legal systems, public administrations, and economic policies, to name a few key elements. Yet, for the sake of higher growth in the future, countries need to continue enhancing institutions and good governance.

Enhancing institutions and good governance—the efficient governing of a country—remains at the core of the reform agenda to raise prosperity to advanced European living standards. Many countries have joined the European Union, a vital anchor toward these goals, and others are aspiring to join. Continue reading “Central, Eastern, and Southeastern Europe: Harnessing the Power of Good Governance” »

Latest Outlook for The Americas: Back on Cruise Control, But Stuck in Low Gear

By Alejandro Werner

July 25, 2017

Versions in Español (Spanish), Português (Portuguese)

Shopping mall in Viña del Mar, Chile: Latin America is expected to recover gradually as most economies continue to face weak domestic demand (photo: Rodrigo Garrido/Newscom)

After disappointing growth over the past few years, economic activity in Latin America remains on track to recover gradually in 2017–18 as recessions in a few countries—notably Argentina and Brazil—are coming to an end. Our latest projections show the region growing by 1 percent in 2017 and 1.9 percent in 2018.

But amid low confidence, domestic demand continues to remain weak across most economies, and is expected to only recover slowly as actual output catches up to potential and internal sources of growth build strength, based on a decline in political and policy uncertainty across some major economies. Some countries in the region will need clear strategies to adjust further following a permanent loss in commodity revenues. Continue reading “Latest Outlook for The Americas: Back on Cruise Control, But Stuck in Low Gear” »

A Firming Recovery

By Maurice Obstfeld

July 24, 2017

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

(photo: IMF)

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” »

Uganda’s Recipe for Growth

By IMFBlog

July 21, 2017

Construction worker in Uganda (photo: James Akena/Reuters/Newscom)

After two decades of steady growth, Uganda’s economy has slowed, and life for Ugandans is not improving fast enough.

Drought in the Horn of Africa, regional conflict, and slow credit growth have contributed to this decline, with per capita growth falling to ½ percent from an average of 5 percent for the past 20 years. Continue reading “Uganda’s Recipe for Growth” »

Corrosive and Costly Corruption

By IMFblog

July 14, 2017 

Corruption can hurt growth and ruin people’s economic chances (photo: Eugene Keebler/iStock)

Corruption can lead to pervasive distrust in government, generating violence, civil strife, and conflict. And the results are devastating for people.

Another problem is that corruption is costly—particularly for those who are already worse off. IMF research shows that in countries with greater levels of corruption, infant mortality and dropout rates are especially high, partly due to less spending on health and education. Reduced investment in these areas tends to hurt poor people the most, and contributes to higher inequality. Continue reading “Corrosive and Costly Corruption” »

Chart of the Week: Norway’s Home-Price Boom

By IMFBlog

July 10, 2017 

A crane looms over the city of Oslo, Norway: Constraints on new construction limit the supply of housing, driving up prices (photo: Ingram Publishing/Newscom)

Think Londoners and New Yorkers have it bad when it comes to sky-high house prices? Residents of Oslo have reason to gripe, too.

House prices in the Norwegian capital are among the world’s highest, as measured by the average cost of a home relative to household median income. Prices in Oslo are perhaps the most visible symptom of a real estate boom across the oil-rich, Nordic nation of 5.2 million people.

Continue reading “Chart of the Week: Norway’s Home-Price Boom” »

Chart of the Week: Ireland’s Fight Against Income Inequality

By IMFBlog

June 30, 2017

Shoppers in Dublin, Ireland: the country has high income inequality, before taxes and transfers (photo: Caro Rupert Oberhaeuser/Newscom)

Ireland’s economy continues to recover after a housing market crash in 2008 plunged the country into a deep and severe crisis. The strong social welfare system provided an important cushion against the worst effects of the crisis.

Ireland’s tax-benefit system is one of the most effective in the European Union in redistributing income. The tax system is relatively progressive and funds a robust system of social benefits, a significant share of which is means-tested. Income inequality before taxes and transfers in Ireland is high—37 percent of income is held by the top 10 percent of income earners. Social transfers make up about 70 percent of income for the bottom 20 percent of earners.

Continue reading “Chart of the Week: Ireland’s Fight Against Income Inequality” »

Migration and Remittances in Latin America and the Caribbean: Brain Drain Versus Economic Stabilization

By Svetlana Cerovic and Kimberly Beaton

June 29, 2017

Versions in Español (Spanish) and Português (Portuguese)

People waiting to withdraw money in La Cruz, Costa Rica: emigrants from Latin America send home sizable remittances (photo: Juan Carlos Ulate/Reuters/Newscom)

Many people from Latin America and the Caribbean live and work abroad. Migrants have been motivated to leave their home country in search of better job opportunities and, in some cases, a more secure environment. Their families at home often benefit from the remittances migrants send home, which help improve their standard of living, health care, and education. Remittances also provide financial resources for trade and investment, which helps boost the country’s growth. Continue reading “Migration and Remittances in Latin America and the Caribbean: Brain Drain Versus Economic Stabilization” »

Banking On the Go

By IMFBlog

June 23, 2017

Tayo Oviosu at IMF lecture (photo: Ryan Rayburn/IMF staff)

Worldwide, more than two billion people are without bank accounts, and only one in three adults in sub-Saharan Africa has access to any type of financial services. In this podcast, Tayo Oviosu, founder and CEO of Nigeria's leading mobile payment platform, Paga, reveals how his company is rapidly bringing millions of unbanked Nigerians into the banking fold. Continue reading “Banking On the Go” »

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.

Continue reading “The Compact with Africa—The Contribution of the IMF” »

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