Need a new search?

If you didn't find what you were looking for, try a new search!

Making Monetary Policy Decisions in the Dark

By | August 12th, 2015|Economic Crisis, Economic outlook, Economic research, Emerging Markets, Español, Finance, Fiscal policy, growth, IMF, International Monetary Fund, Investment, Public debt|

By Francesco Grigoli, Alexander Herman, Andrew Swiston, and Gabriel Di Bella

(Version in Español and Português)

In the wake of the global financial crisis, monetary and fiscal policies were used aggressively to counteract the effects of the crisis on economic activity. Policymakers look at a number of indicators to guide them in assessing an economy’s level of activity relative to its productive capacity. But trying to figure out the position of the economy in real time is often quite challenging, with consequences for setting policy.

In the case of Brazil in 2011, for example, policymakers estimated in real time that the economy was at a level of output consistent with its productive capacity. Over time, however, the assessment of the cyclical position of the Brazilian economy changed drastically. It had not just been at full capacity, but was overheating. The economy was actually facing inflationary pressures, requiring policy tightening to bring it back to the central bank’s target.

Continue reading “Making Monetary Policy Decisions in the Dark” »

From Windfall to Windmill: Harnessing Asia’s Dynamism for Latin America

By | July 22nd, 2015|Advanced Economies, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Finance, Financial Crisis, Fiscal policy, Globalization, growth, IMF, International Monetary Fund, Investment|

By Andre Meier and Fabiano Rodrigues Bastos

(Versions in Español and Português)

Latin America’s recent economic fortunes highlight the region’s closer economic ties with Asia. China, in particular, has grown into a crucial source of demand for Latin American commodities over the past two decades, providing significant gains to the region. The flip side is that the ongoing structural slowdown of Chinese investment is weighing considerably on the prices of those commodities, and the countries that export them.

But Asia can be much more than just a source of episodic windfall gains (and losses) for Latin America. Like a windmill, Asia could help to power a stronger Latin American economy—by providing an example of successful regional trade integration and through greater direct links across the Pacific that benefit both sides. However, securing these benefits will require clear and realistic objectives, a long-term strategy, and attention to the political and social implications of greater economic integration. 

Continue reading “From Windfall to Windmill: Harnessing Asia’s Dynamism for Latin America” »

Financial Stability Committees: Learning from the Experts

By | June 16th, 2015|Economic Crisis, Economic outlook, Economic research, Emerging Markets, Español, Financial Crisis, Fiscal policy, Government, growth, IMF, International Monetary Fund, Public debt|

By Jorge Roldos and Alejandro Werner

(Versions in Español and Português)

Macroeconomists and financial sector experts need to talk to each other. Such communication is important to help identify and measure systemic risks as well as to coordinate and/or conduct macroprudential policies—rules that reduce instability across the financial system.

The creation of financial stability committees, including in Latin America, have been a forum for precisely this—working together to share information about evolving risks, develop monitoring and mitigating tools, and to define the decision-making authority, accountability, and communication to the general public. But institutional design and governance of these councils differ across countries.

Continue reading “Financial Stability Committees: Learning from the Experts” »

Global Energy Subsidies Are Big—About US$5 Trillion Big

By | May 18th, 2015|Finance, Globalization, IMF, International Monetary Fund, Reform, Uncategorized|

By Sanjeev Gupta and Michael Keen

(Versions in 中文, Français, 日本語Русский and Español)

In their blog, Ben Clements and Vitor Gaspar make the points that global energy subsidies are still very substantial, that there is a strong need for reform in many countries, and that now is a great time to do it. This blog sets out what we mean by “energy subsidies,” provides details on their estimation, and explains how they continue to be high despite the recent drop in international energy prices (Chart 1).

Slide1

Our latest update of global energy subsidies shows that “pre-tax” subsidies—which occur when people and businesses pay less than it costs to supply the energy—are smaller than a few years back. But “post-tax” subsidies—which add to pre-tax subsidies an amount that reflects the environmental, health and other damage that energy use causes and the benefit from favorable VAT or sales tax treatment—remain extremely high, and indeed are now well above our previous estimates.

Continue reading “Global Energy Subsidies Are Big—About US$5 Trillion Big” »

Latin America and the Fiscal Stimulus: A Mild Hangover, Not Yet an Addiction

By | May 6th, 2015|Economic Crisis, Economic research, Emerging Markets, Financial Crisis, Fiscal policy, growth, IMF, International Monetary Fund, Reform, Uncategorized|

Alexander KlemmBy Alexander Klemm

(Versions in Español and Português)

Latin America is heading for tougher times. Regional growth is expected to dip below 1 percent in 2015, partly as a result of the drop in global commodity prices. How well placed is the region for the coming lean times?

Countries face this slowdown from much weaker fiscal positions than when the global financial crisis hit. Then, Latin America responded strongly with expansionary fiscal policies, including explicit fiscal stimulus programs in many countries. But, as growth has recovered, this increase in spending has proved difficult to reverse.

Continue reading “Latin America and the Fiscal Stimulus: A Mild Hangover, Not Yet an Addiction” »

Northern Spring, Southern Chills: Outlook for Latin America and the Caribbean

By | April 17th, 2015|Economic outlook, Economic research, Emerging Markets, Financial Crisis, Fiscal policy, growth, IMF, International Monetary Fund, Investment, Reform, Uncategorized|

Alejandro WernerBy Alejandro Werner

(Version in Español and Português)

Economic activity in Latin America and the Caribbean has been cooling down for several years, and the temperature in many places is still falling. Regional growth is now expected to dip below 1 percent in 2015—down from 1.3 percent in 2014. Apart from a short-lived recession during the global financial crisis, this would be the slowest rate of growth since 2002.

However, growth dynamics vary across the region, broadly along North-South lines. While spring may be in the air for Mexico, Central America, and parts of the Caribbean, the economic climate remains decidedly chilly in much of South America. What is behind these divergent prospects, and how can a sunnier outlook be restored to the entire region?

Continue reading “Northern Spring, Southern Chills: Outlook for Latin America and the Caribbean” »

Time to Act on the G-20 Agenda: The Global Economy Will Thank You

By | February 6th, 2015|Advanced Economies, Economic Crisis, Emerging Markets, Employment, Europe, G-20, Globalization, Government, growth, IMF, International Monetary Fund, Investment, Politics, Reform, Uncategorized|

2014MDNEW_04By Christine Lagarde

(Versions in 中文, Français, 日本語Русский, Türk, and Español)

Implementation, investment, and inclusiveness: these three policy goals will dominate the G-20 agenda this year, including the first meeting of finance ministers and central bank governors in Istanbul next week. As Turkish Prime Minister Ahmet Davutoğlu recently put it: “Now is the time to act” – şimdi uygulama zamanı.

There is a lot at stake. Without action, we could see the global economic supertanker continuing to be stuck in the shallow waters of sub-par growth and meager job creation. This is why we need to focus on these three “I’s”:

Continue reading “Time to Act on the G-20 Agenda: The Global Economy Will Thank You” »

(Yet) Another Year of Subpar Growth: Latin America and the Caribbean in 2015

By | January 21st, 2015|Advanced Economies, Economic outlook, Economic research, Emerging Markets, Financial Crisis, Fiscal policy, growth, International Monetary Fund, Reform, Uncategorized|

Alejandro WernerBy Alejandro Werner

(version in Español and Português)

The turn of the year usually brings a fresh dose of optimism. Yet, worries dominate across much of Latin America and the Caribbean today, as 2015 marks yet another year of reduced growth expectations. Regional growth is projected at just 1¼ percent, about the same low rate as in 2014 and almost 1 percentage point below our previous forecast. Challenging external conditions are an important drag for many countries. Still, it’s not too late for some good New Year’s resolutions to address domestic weaknesses and improve growth prospects.

Werner blog.chart 1 Continue reading “(Yet) Another Year of Subpar Growth: Latin America and the Caribbean in 2015” »

Unlocking Latin America’s Huge Potential

By | December 2nd, 2014|Economic outlook, Emerging Markets, Español, Finance, Fiscal policy, Globalization, Government, growth, IMF, International Monetary Fund, Reform, Uncategorized|

2014MDNEW_04By Christine Lagarde

(Versions in Español and Português)

I am looking forward to being in Peru this week to discuss economic and social developments with the government and a wide range of stakeholders—and also to follow up on the preparations for the next IMF–World Bank Annual Meetings, which will be held in Lima in October 2015. Later this week, I will participate in the Santiago Conference in Chile, where I will meet policymakers and influential representatives from Latin America and the Caribbean to discuss economic approaches to strengthen the entire region.

As I travel to the land of the Andes, I am reminded of the natural beauty of the region, the richness of its culture, and its incredible diversity. Despite its current challenges—growth continues to slow, as global economic and financial conditions are shifting and economies run up against capacity limits—I remain decidedly optimistic about the region’s potential to raise living standards while protecting its unique heritage and precious environment.

Continue reading “Unlocking Latin America’s Huge Potential” »

Mind the Dragon: Latin America’s Exposure to China

By | November 11th, 2014|Advanced Economies, Asia, Economic outlook, Economic research, Emerging Markets, Español, Globalization, growth, IMF, International Monetary Fund, Investment, Politics, Uncategorized|

By Bertrand Gruss and Fabiano Rodrigues Bastos 

(version in Español and Português)

China is still a distant and exotic country in the mind of many people in Latin America. Yet, with the Asian giant rapidly expanding its ties with the region (the share of exports going to China is now ten times larger than in 2000), their economic fates seem to be increasingly connected. And in fact, a sharper slowdown in China now represents one of the key risks Latin Americans should be worried about—and prepare for. So, what is at stake? How much do shocks to China matter for economies in Latin America?

In an earlier study presented in our April 2014 Regional Economic Outlook, we analyzed growth spillovers in a large model of the global economy, focusing on the link through commodity prices. Here, we complement that analysis by using a simple yet novel approach that exploits the reaction of financial markets to the release of economic data. We find that growth surprises in China have a significant effect on market views about Latin American economies.

Continue reading “Mind the Dragon: Latin America’s Exposure to China” »

Load More Posts