• The world entered the #COVID19 crisis with pre-existing external imbalances, leaving some economies vulnerable to external shocks and renewed trade tensions, the IMF’s Leigh and Kaufman write in an #IMFBlog on the new External Sector Report. #ESR Link https://t.co/WbZx0Ao2Tp
    IMF Tue 04 Aug 2020 13:07

    By Martin Kaufman and Daniel Leigh

    The world entered the COVID-19 pandemic with persistent, pre-existing external imbalances. The crisis has caused a sharp reduction in trade and significant movements in exchange rates but limited reduction in global current account deficits and surpluses. The outlook remains highly uncertain as the risks of new waves of contagion, capital flow reversals, and a further decline in global trade still loom large on the horizon.

    Our new External Sector Report shows that overall current account deficits and surpluses in 2019 were just below 3 percent of world GDP, slightly less than a year earlier. Our latest forecasts for 2020 imply only a further narrowing by some 0.3 percent of world GDP, a more modest decline than after the global financial crisis 10 years ago.

  • STARTING NOW: @GitaGopinath on the release of the 2020 External Sector Report (#ESR): “Global Imbalances and the #COVID19 Crisis” Link @OMFIF Link
    IMF Tue 04 Aug 2020 13:02

    Key Highlights

    Overall current account deficits and surpluses narrowed modestly in 2019 to just under 3 percent of world GDP. The IMF’s multilateral approach suggests that about 40 percent of overall current account deficits and surpluses were excessive in 2019. The external outlook for 2020 is subject to high uncertainty and cross-country variation.

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  • What are the measures being taken by South Africa to enhance transparency and governance in the use of the $4.3 billion IMF emergency financing? More in the #IMFCountryFocus interview with @TreasuryRSA’s Dondo Mogajane. Link #IMFAfrica
    IMF Tue 04 Aug 2020 10:32

    August 3, 2020

    In a conversation with IMF Country Focus, the Director-General of South Africa’s National Treasury Dondo Mogajane explains how the government has responded to the COVID-19 crisis, how IMF financing will help to stabilize the economy, and strategies for addressing debt and spurring growth.

    South Africa’s economic activity is projected to contract by 8 percent in 2020, according to the IMF’s June update to the Regional Economic Outlook for sub-Saharan Africa.

  • Tune in tomorrow, August 4 at 9:00 AM ET for the launch of the 2020 External Sector Report and our analysis of global external developments by @GitaGopinath #ESR @OMFIF #COVID19 Link Link
    IMF Mon 03 Aug 2020 20:05

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  • A disconnect between financial markets and the real economy has emerged with the #COVID19 pandemic, posing a risk to the recovery should investors’ attitude change and cause a correction. Read more on the #IMFBlog: Link #GFSR
    IMF Mon 03 Aug 2020 18:40

    By Tobias Adrian and Fabio Natalucci

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    Amid the human tragedy and economic recession caused by the COVID-19 pandemic, the recent surge in risk appetite in financial markets has caught analysts’ attention. After sharp declines in February and March, equity markets have rallied back, in some cases to close to their January levels, while credit spreads have narrowed significantly, even for riskier investments. This has created an apparent disconnect between financial markets and economic prospects. Investors seem to be betting that lasting strong support from central banks will sustain a quick recovery even as economic data point to a deeper-than-expected downturn, as shown in the June 2020 World Economic Outlook Update.

    Tug of war

    In the newest Global Financial Stability Update, we analyze the tug of war between the real economy and financial markets and the risks involved. With...

  • South Africa will use IMF emergency funding to support economy during #COVID19, boost healthcare spending and extend social support payments, @TreasuryRSA's Mogajane explains in our latest #IMFCountryFocus. Link #IMFAfrica https://t.co/7zncPl79p6
    IMF Mon 03 Aug 2020 16:35

    August 3, 2020

    In a conversation with IMF Country Focus, the Director-General of South Africa’s National Treasury Dondo Mogajane explains how the government has responded to the COVID-19 crisis, how IMF financing will help to stabilize the economy, and strategies for addressing debt and spurring growth.

    South Africa’s economic activity is projected to contract by 8 percent in 2020, according to the IMF’s June update to the Regional Economic Outlook for sub-Saharan Africa.

  • What is debt sustainability? Why is it important to maintain debt at sustainable levels? And what can borrowers and creditors do to address rising debt vulnerabilities and maintain debt sustainability? Find out in this video from the IMF and read more at: Link https://t.co/mCiINzFC9G
    IMF Mon 03 Aug 2020 15:15
  • What economic measures are governments taking to respond to COVID-19? Our updated Policy Tracker lists key actions taken by 193 countries. Link
    IMF Mon 03 Aug 2020 13:00
  • One size does not fit all: #IMFBlog by @GitaGopinath and Tobias Adrian on how central banks use foreign exchange intervention, capital flow measures and financial regulation to complement interest rates decisions in responding to external shocks. Link https://t.co/IwcuD0iG5n
    IMF Sun 02 Aug 2020 16:14

    By Tobias Adrian and Gita Gopinath

    While capital mobility provides many benefits, capital flows to emerging market and developing economies are often volatile and depend critically on global financial conditions. The risks posed by volatile capital flows to macroeconomic and financial stability are often difficult to address with conventional monetary policy tools. Hence, policymakers have complemented interest rate policy with additional tools—including foreign exchange intervention, capital flow measures, and macroprudential actions—to achieve their objectives.

    A significant shortcoming of this more eclectic approach is the lack of clear frameworks to guide how these tools should be used in concert to achieve central bank objectives. Accordingly, IMF staff have been engaged in a major push to use conceptual and quantitative models to guide how these tools should be used in an integrated way.

    Our research on an Integrated Policy Framework considers...

  • People who work from home are less likely to lose their jobs, but is this a new phenomenon? Read our #IMFBlog: Link #WFH #COVID19 https://t.co/LwMxdM0LU9
    IMF Sun 02 Aug 2020 14:49

    By Ippei Shibata

    There has been much discussion in recent months about how workers who transitioned to working from home—and those who were deemed “essential”—are less affected by the layoffs and job losses brought on by lockdowns than are workers in “social” jobs that require closer human interaction, like restaurant workers. However, our new IMF staff research suggests that this does not tell the full story.

    In particular, we find that while teleworkable jobs are indeed more secure than non-teleworkable occupations during the current pandemic-related recession, this pattern has also been observed during the global financial crisis of 2007–09—meaning that something more than pandemic-related restrictions is at play.

    As the chart shows, unemployment has increased less for teleworkable occupations during both recessions. This pattern suggests that people in teleworkable occupations tend to keep their jobs not only because they satisfy the need for social...

  • REPLAY: #IMFexchange with @KGeorgieva and @IanBremmer, moderated by @RaviReports. Link
    IMF Sun 02 Aug 2020 14:14
  • What does #inclusion mean for economic research and the economics profession? Link #SundayReads
    IMF Sun 02 Aug 2020 14:04
  • The latest IMF Research Perspectives newsletter "An Economy for All” focuses on improving access to economic opportunities for different populations. Link #SundayReads https://t.co/z8d4lfYznU
    IMF Sun 02 Aug 2020 13:04
  • #DYK in 2019, we made 4x more references to “#governance” and “#anticorruption” in our staff reports, compared to the average over the prior 10 years. Learn about the progress we made in promoting #GoodGovernance over the recent years. Link #Stopcorruption https://t.co/AXvYG1OoBw
    IMF Sun 02 Aug 2020 12:09
  • Changyong Rhee, Director of the IMF’s Asia and Pacific Department, explains the economic impact of #COVID19 on Asian countries and how the IMF is helping counteract the crisis in the region. Link #IMFAsia https://t.co/MkqiuDmmzb
    IMF Sun 02 Aug 2020 06:24

    In the absence of a second wave of infections and with unprecedented policy stimulus to support the recovery, growth in Asia is projected to rebound strongly to 6.6 percent in 2021. But even with this fast pickup in economic activity, output losses due to COVID-19 are likely to persist. We project Asia’s economic output in 2022 to be about 5 percent lower compared with the level predicted before the crisis; and this gap will be much larger if we exclude China, where economic activity has already started to rebound.

    Clouds on the horizon

    Our projections for 2021 and beyond assume a strong rebound in private demand; however, this may be optimistic for several reasons:

  • A poll of top economists found that the vast majority felt the #COVID19 pandemic will worsen inequality, in part through its disproportionate impact on low-skilled workers. More on #IMFBlog: Link
    IMF Sun 02 Aug 2020 00:03

    By Davide Furceri, Prakash Loungani, Jonathan D. Ostry

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    The COVID-19 crisis is now widely seen as the greatest economic calamity since the Great Depression. In January, the IMF expected global income to grow 3 percent; it is now forecast to fall 3 percent, much worse than during the Great Recession of 2008-09. Behind this dire statistic is an even grimmer possibility: if past pandemics are any guide, the toll on poorer and vulnerable segments of society will be several times worse. Indeed, a recent poll of top economists found that the vast majority felt the COVID-19 pandemic will worsen inequality, in part through its disproportionate impact on low-skilled workers.

    Our evidence supports concerns about the adverse distributional impacts of pandemics. We find that major epidemics in this century have raised income inequality and hurt employment prospects of those with only a basic...

  • Check out our new web page dedicated to the youth: Link #IMFyouth
    IMF Sat 01 Aug 2020 22:33
  • What is debt sustainability? Why is it important to maintain debt at sustainable levels? And what can borrowers and creditors do to address rising debt vulnerabilities and maintain debt sustainability? Find out in this video from the IMF and read more at: Link https://t.co/ikEeteJpBu
    IMF Sat 01 Aug 2020 17:23
  • Governance and #anticorruption efforts play a critical role in ensuring the effectiveness of our #COVID19 policy and lending response. A new study assesses our progress in promoting #GoodGovernance. Learn more Link #Stopcorruption https://t.co/YNL62DfjDg
    IMF Sat 01 Aug 2020 17:08
  • Better communication and transparency allow the public opinion to evaluate how central banks serve its interest. Link #IMFBlog
    IMF Sat 01 Aug 2020 15:48

    Accountability and effectiveness

    Central banks have been engaging in a growing list of activities. More of them have taken over supervision and other financial stability functions, for example. Transparency is an instrument to facilitate accountability, allowing the public to better understand how these actions serve their best interest and are consistent with existing mandates, with the ultimate goal of increasing effectiveness. The increasing responsibilities and significant expansion of balance sheets have led to a stronger demand for central banks to better explain what they do, how, and why. This is especially important as their independence has come under scrutiny in many countries. In central bank parlance, transparency and accountability become the collateral guarantee of independence.

    The new code is part of the IMF’s broader focus on issues of accountability and governance.

    A voluntary code, it allows central banks to measure transparency in...

  • A banking crisis is 2.5 times more likely when a country is affected by conflict. Read more on #IMFBlog: Link
    IMF Sat 01 Aug 2020 14:18

    By Montfort Mlachila and Rasmane Ouedraogo

    While the economic effects of conflict and political instability have been analyzed extensively, much less attention has been paid to how banks are affected.

    Our IMF staff paper addresses this gap by investigating whether rising conflict and political instability globally over the past several decades has led to more banking crises in developing countries. Our study focuses on the potential impact of conflict and political instability on systemic banking crisis in 92 developing countries over the period 1970-2016.

     

  • It’s easier to work at home in Sweden and Finland than in Turkey or Ecuador. More than half of houses in emerging countries don’t even have a computer. Amid #COVID19, IMF researchers ranked how ‘teleworkable’ are jobs in different countries. Link #IMFBlog https://t.co/B0e7mGg89a
    IMF Sat 01 Aug 2020 12:38

    By Mariya Brussevich, Era Dabla-Norris, and Salma Khalid

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    The COVID-19 pandemic is devastating labor markets across the world. Tens of millions of workers lost their jobs, millions more out of the labor force altogether, and many occupations face an uncertain future. Social distancing measures threaten jobs requiring physical presence at the workplace or face-to-face interactions. Those unable to work remotely, unless deemed essential, face a significantly higher risk of reductions in hours or pay, temporary furloughs, or permanent layoffs. What types of jobs and workers are most at risk? Not surprisingly, the costs have fallen most heavily on those who are least able to bear them: the poor and the young in the lowest-paid jobs.

    In a new paper, we investigate the feasibility to work from home in a large sample of advanced and emerging market economies. We estimate that nearly 100 million...

  • The IMF Executive Board today approved additional emergency financing of US$152.61 million to help #Gabon deal with the social and economic impact of #COVID19. This follows an earlier approval of US$147 million in April. Link #IMFAfrica https://t.co/xLbaDDIaVa
    IMF Fri 31 Jul 2020 20:27
    This is the second disbursement under the Rapid Financing Instrument (RFI) to help Gabon address urgent balance of payment needs stemming from the COVID-19 pandemic. Weaker external demand and a deepening of the impact of the COVID-19 pandemic have further deteriorated growth prospects and worsened external and fiscal positions. The additional resources provided under the RFI will help boost healthcare, protect the most vulnerable and support the private sector, notably small businesses.
  • The IMF has significantly increased its focus on helping countries tackle #corruption over the last years. In 2018, we adopted an enhanced framework designed to facilitate a more candid & effective dialogue w/ countries. Learn about the progress we made. Link https://t.co/oAiQ7qEPyI
    IMF Fri 31 Jul 2020 19:07
  • The IMF’s central bank transparency code was developed with extensive input from central banks, international institutions and standard-setters. It lays out a set of practices applicable to all countries, regardless of income levels and circumstances. Link
    IMF Fri 31 Jul 2020 14:07

    Accountability and effectiveness

    Central banks have been engaging in a growing list of activities. More of them have taken over supervision and other financial stability functions, for example. Transparency is an instrument to facilitate accountability, allowing the public to better understand how these actions serve their best interest and are consistent with existing mandates, with the ultimate goal of increasing effectiveness. The increasing responsibilities and significant expansion of balance sheets have led to a stronger demand for central banks to better explain what they do, how, and why. This is especially important as their independence has come under scrutiny in many countries. In central bank parlance, transparency and accountability become the collateral guarantee of independence.

    The new code is part of the IMF’s broader focus on issues of accountability and governance.

    A voluntary code, it allows central banks to measure transparency in...

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