Financial Stability Improves, But Rising Vulnerabilities Could Put Growth at Risk

By Tobias Adrian

October 11, 2017

Versions in Versions in عربي (Arabic), 中文 (Chinese), Español (Spanish), Français (French)

The headquarters of the European Central Bank in Frankfurt, Germany: To avoid causing market turbulence, central banks will have to clearly communicate their plans to gradually unwind crisis-era policies (photo: Caro/Sven Hoffman/Newscom).

It seems like a paradox. The world’s financial system is getting stronger, thanks to healthy economic growth, buoyant markets, and low interest rates. Yet despite these favorable conditions, dangers in the form of rising financial vulnerabilities are starting to loom. That is why policymakers should act now to keep those vulnerabilities in check. Continue reading “Financial Stability Improves, But Rising Vulnerabilities Could Put Growth at Risk” »

Rising Household Debt: What It Means for Growth and Stability

By Nico Valckx

October 3, 2017

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

Household debt, including mortgage debt, has been on the rise since the global financial crisis (photo: Louoates/iStock).

Debt greases the wheels of the economy. It allows individuals to make big investments today–like buying a house or going to college – by pledging some of their future earnings.

That’s all fine in theory. But as the global financial crisis showed, rapid growth in household debt – especially mortgages – can be dangerous. Continue reading “Rising Household Debt: What It Means for Growth and Stability” »

Corruption in Latin America: Taking Stock

By  David LiptonAlejandro Werner, Carlos Gonçalves

September 21, 2017 

Versions in Español (Spanish)  Português (Portuguese)

Systemic corruption drains public resources and drags down economic growth (photo: People Images/iStock).

Corruption continues to make headlines in Latin America. From a scheme to shelter assets leaked by documents in Panama, to the Petrobras and Odebrecht scandals that have spread beyond Brazil, to eight former Mexican state governors facing charges or being convicted, the region has seen its share of economic and political fallout from corruption. Latin Americans are showing increasing signs of discontent and demanding that their governments tackle corruption more aggressively.

Continue reading “Corruption in Latin America: Taking Stock” »

Growth That Reaches Everyone: Facts, Factors, Tools

By Rupa Duttagupta, Stefania Fabrizio, Davide Furceri, and Sweta Saxena

September 20, 2017

Versions in Русский (Russian), Español (Spanish) 

People lining up in front of a charity house in São Paulo, Brazil: Over 200 million people around the world are unemployed, despite overall economic growth (photo: Paulo Whitaker/Reuters/Newscom)

Economic growth provides the basis for overcoming poverty and lifting living standards. But for growth to be sustained and inclusive, its benefits must reach all people.

While strong economic growth is necessary for economic development, it is not always sufficient.

Over the past few decades, growth has raised living standards and provided job opportunities, lifting millions out of extreme poverty. But, we have also seen a flip side. Inequality has risen in several advanced economies and remains stubbornly high in many that are still developing. Continue reading “Growth That Reaches Everyone: Facts, Factors, Tools” »

Chart of the Week: Iceland’s Tourism Eruption

By IMFBlog

August 14, 2017

Tourists at Jokulsarlon iceberg lagoon in eastern Iceland. Tourism has become a pillar of the Nordic island’s economy (photo: Picture Alliance/Paul Mayall/Newscom).

Iceland’s tourist industry is burgeoning as adventure-seeking visitors flock to the rugged Nordic nation to partake in activities such as whale watching, ice climbing and spelunking.  

The number of foreign visitors to Iceland surged 40 percent to 1.8 million last year – dwarfing the island’s population of 335,000. This year, Keflavík airport expects another 27 percent increase, to 2.2 million, according to estimates cited in a recent study by IMF economist Uwe  Böwer. Continue reading “Chart of the Week: Iceland’s Tourism Eruption” »

Building Fiscal Institutions in Fragile States

By Katherine Baer, Sanjeev Gupta, Mario Pessoa

August 9, 2017

Version in Français (French)

A porter in the market in Kathmandu, Nepal: the country increased their tax revenues in recent years with the help of technical assistance (photo: Navesh Chitrakar/Newscom)

Fragile states face more obstacles to growth than most countries.  Their per-capita GDP is less than half of most other low-income countries, and their economies are more volatile.  Many are in conflict or going through a natural disaster, or just emerging from these.  Our study is based on 39 countries, and since completed, the number of fragile states has increased to 43. 

To grow, a country needs tax policies and tax administration, laws and institutions to formulate and execute a budget, and trained staff to implement fiscal policies, among other factors.  Our preliminary results show that fragile states that have received technical assistance, also have improved their fiscal performance.

Continue reading “Building Fiscal Institutions in Fragile States” »

A Common Cause for Sustainable Growth and Stability in Central Africa

By Abebe Aemro Selassie

August 1, 2017

Version in Français (French),  Português (Portuguese), and Español (Spanish);

Woman with a machete in Bafut, Cameroon: Six countries in Central Africa have a strategy to turn their economies around, with help from the IMF (photo: Heiner Heine/imageBroker/Newscom)

Six countries in central Africa have been hit hard by the collapse in commodity prices. Oil prices dropped, economic growth stalled, public debt rose, and foreign exchange reserves declined. A delayed response from policymakers, and a regional conflict have worsened the situation further for people in the region.

The countries of the Central African Economic and Monetary Community are Gabon, Cameroon, Chad, the Central African Republic, the Republic of Congo, and Equatorial Guinea. They share a common currency—the CFA franc—that is pegged to the euro, and have a common central bank that holds the region’s pool of foreign exchange reserves. Continue reading “A Common Cause for Sustainable Growth and Stability in Central Africa” »

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” »

IMF Support for the United Nations’ Sustainable Development Goals

By Stefania Fabrizio, Roland Kpodar, and Chris Lane

July 19, 2017

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

Schoolchildren in line in Mali: Reducing the large gap between men’s and women’s education in some low-income states is one of the 2030 goals which IMF advice can address (photo: Stringer/Reuters/Newscom)

Since the adoption of the United Nation’s Sustainable Development Goals (SDGs) in 2015, we at the IMF have supported countries to reach their goals through policy advice, training, and financial support. Results will accrue over time, and we already see some notable progress. Continue reading “IMF Support for the United Nations’ Sustainable Development Goals” »

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” »

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