Fiscal Consolidation

Recovery Strengthening, but Much Work Remains

(Versions in Español عربي, Русский, Français, and 中文 )

I want to take a moment today to remember our colleague Wabel Abdallah, who was our resident representative in Afghanistan and who, as many of you know, was killed in the terrorist attack in Kabul on Friday. We are mourning a colleague, a friend to many of us, above all a dedicated civil servant who represented the best the Fund has to offer, and gave his life in the line of duty, helping the Afghan people. Our hearts go out to his family and to the many victims of this brutal attack.

Let me now turn to our update of the World Economic Outlook and distill its three main messages:

First, the recovery is strengthening. We forecast world growth to increase from 3% in 2013 to 3.7% in 2014. We forecast growth in advanced economies to increase from 1.3% in 2013 to 2.2% in 2014. And we forecast growth in emerging market and developing economies to increase from 4.7% in 2013 to 5.1% in 2014.

Continue reading “Recovery Strengthening, but Much Work Remains” »

By IMFBlog| January 21st, 2014|Advanced Economies, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Financial Crisis, growth, Uncategorized|0 Comments

Unleashing Brazil’s Growth

By Martin Kaufman and Mercedes García-Escribano

(Version in Español and Português)

Since the early 2000s, Brazil’s economy has grown at a robust clip, with growth in 2010 reaching 7.5 percent—its strongest in a quarter of a century. A key pillar of its hard-won economic success has been sound economic policies and the adoption of far-reaching social programs, which resulted in a substantial decline in poverty.

In the last couple of years Brazil’s growth slowed down. Although other emerging market economies experienced a similar slowdown, the growth outturns in Brazil were particularly disappointing. And the measures taken to stimulate the economy did not produce a sustained recovery. This is because unleashing sustained growth in Brazil requires measures geared not at stimulating domestic demand but at changing the composition of demand towards investment and at increasing productivity.

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By IMFBlog| November 27th, 2013|Advanced Economies, Economic outlook, Economic research, Emerging Markets, Español, Finance, Fiscal policy, growth, IMF, International Monetary Fund, Latin America, Português, Public debt, Uncategorized|0 Comments

Taming government debt—it can be done, but it ain’t easy

By Helge Berger and Justin Tyson

Sooner or later, and one way or the other, government debt in advanced economies will have to come down from the record levels reached in the wake of the global economic and euro area crises. There is no magic number for how much sovereign debt an economy can shoulder. And, as bringing down debt by cutting government spending or raising taxes comes at the risk of reducing growth and employment in the short term, there are arguments to not proceed too hastily. But eventually debt will have to be put back on a downward path in many countries. This will help rebuild fiscal buffers and cope with the costs of aging. So, what should governments do?

Our new analysis takes a closer look at the historical record and key trade-offs. The bottom line: it is possible to reduce debt when growth is low. Ultimately perseverance should pay off.

Continue reading “Taming government debt—it can be done, but it ain’t easy” »

By IMFBlog| September 25th, 2013|Economic research, Employment, Finance, Financial Crisis, Financial regulation, Fiscal policy, growth, IMF, International Monetary Fund, Public debt, Uncategorized|0 Comments

Fixing the Financial Sector: A Change the UK Must Bank On

By Krishna Srinivasan

The UK economy is a long way from a strong and durable recovery. Growth has been flat for more than two years now, per capita income is about 7 percent below its pre-crisis peak, unemployment is elevated at 7.8 percent, with youth unemployment alarmingly high at 21 percent, and credit to the economy remains severely constrained.

Recent data are, however, encouraging, and policies should capitalize on the nascent signs of recovery to secure strong growth and rebalance the economy. Fixing the financial sector, including by addressing banks’ asset quality, is a pre-requisite for a durable UK recovery. See the IMF’s assessment of the UK economy.

Continue reading “Fixing the Financial Sector: A Change the UK Must Bank On” »

By IMFBlog| July 17th, 2013|Advanced Economies, Economic Crisis, Economic research, Europe, growth, International Monetary Fund|1 Comment

After a Golden Decade, Can Latin America Keep Its Luster?

By Alejandro Werner

(Versions in Español and Português)

Latin America continues to be one of the fastest growing regions in the world, even though growth slowed down a bit in 2012. Many economies in the region are operating at or near potential, inflation remains generally low, and unemployment is at historically low levels.

In the near term, the region will continue to benefit from easy external financing and relatively high commodity prices. In our May 2013 Regional Economic Outlook, we project that the region will expand by about 3½ percent in 2013. In Brazil—the region’s largest economy—economic activity is strengthening, driven by improving external demand, measures to boost investment, and the impact of earlier policy easing. In the rest of Latin America, output growth is expected to remain near potential.

Continue reading “After a Golden Decade, Can Latin America Keep Its Luster?” »

By IMFBlog| May 6th, 2013|Economic Crisis, Economic outlook, Economic research, Finance, growth, International Monetary Fund, Latin America|2 Comments

Resolutions for the Fiscal New Year—Staying on Track Is No Easy Task

We're one month into 2013, and if past experience is any guide, by now many people will have all but forgotten the promises they made about the things they planned to do over the coming year. But unlike many of these resolutions, the ones made by most advanced economies to reduce their 2012 fiscal deficits were by and large kept.

By IMFBlog| February 4th, 2013|Advanced Economies, Economic Crisis, Emerging Markets, Europe, Fiscal policy, growth, IMF, International Monetary Fund, Public debt|2 Comments

We May Have Avoided the Cliffs, But We Still Face High Mountains

Compared to where we were at the same time last year, acute risks have decreased. The United States has avoided the fiscal cliff, and the euro explosion in Europe did not occur. And uncertainty is lower. But we should be under no illusion. There remain considerable challenges ahead. And the recovery continues to be slow, indeed much too slow. Overall, these developments lead us to forecast 3.5 percent world growth for 2013.

By IMFBlog| January 23rd, 2013|Advanced Economies, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Fiscal policy, growth, IMF, International Monetary Fund|5 Comments

Building on Latin America’s Success

Next week, I will travel to Chile and Colombia—my second visit to the region since November 2011. I return with increased optimism, as much of Latin America continues its impressive transformation that started a decade ago.

By IMFBlog| December 6th, 2012|Economic Crisis, Emerging Markets, Español, Fiscal policy, growth, IMF, Inequality, International Monetary Fund, Latin America, Public debt|5 Comments

Taking Stock: Public Finances Now Stronger in Many Countries

The slow global recovery is making fiscal adjustment more difficult around the world, but this doesn’t mean that little has been accomplished. In fact, significant progress in many countries has been made during the past two years in strengthening their fiscal accounts after the 2008–09 deterioration.

By IMFBlog| October 9th, 2012|Advanced Economies, Africa, Annual Meetings, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, Europe, Finance, Fiscal policy, Global Governance, Globalization, growth, IMF, Inequality, International Monetary Fund, Investment, Latin America, Low-income countries, Middle East, Multilateral Cooperation, Politics, Public debt|3 Comments

Risks to Financial Stability Increase, Bold Action Needed

The latest update of the Global Financial Stability Report says financial stability risks have increased, because of escalating funding and market pressures and a weak growth outlook. Now is the moment for strong political leadership, because tough decisions will need to be made to restore confidence and ensure lasting financial stability in both advanced and emerging economies. It is time for action.

By IMFBlog| July 17th, 2012|Advanced Economies, Europe, Financial Crisis, IMF, International Monetary Fund|3 Comments

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