This book introduces a new framework for more candid discussions of governance and corruption issues with its member countries. It points out that sound institutions may be one of sub-Saharan Africa’s foremost milestones in its journey to sustainable development.
Capital flow management measures (CFMs) can be part of the broader policy toolkit to help countries reap the benefits of capital flows while managing the associated risks. The challenges posed by the attributes of crypto assets are compounded by gaps in the legal and regulatory frameworks. This paper aims to discuss how crypto assets could impact the effectiveness of CFMs from a structural and longer-term perspective.
The war in Ukraine is casting a pall on Europe and its economy. Millions of innocent civilians have been displaced and thousands wounded or killed. For Europe’s economy, it has struck at a time when private consumption and investment are still below pre-pandemic trends, and the pandemic itself continues to weigh on activity. Large increases in commodity prices and continued supply-side disruptions are now pushing inflation to higher levels, cutting into household incomes and firm profits. New risks loom from escalating fighting and disruptions to critical energy flows.
The war in Ukraine has triggered a costly humanitarian crisis that demands a peaceful resolution. At the same time, economic damage from the conflict will contribute to a significant slowdown in global growth in 2022 and add to inflation. Fuel and food prices have increased rapidly, hitting vulnerable populations in low-income countries hardest.Global growth is projected to slow from an estimated 6.1 percent in 2021 to 3.6 percent in 2022 and 2023. This is 0.8 and 0.2 percentage points lower for 2022 and 2023 than projected in January.
Financial stability risks have risen as war tests the resilience of the financial system through various channels. Chapter 1 looks at the implications of the war in Ukraine on the financial system. Commodity prices pose challenging trade-offs for central banks. Many emerging and frontier markets are facing especially difficult conditions. Chapter 2 discusses the sovereign-bank nexus in emerging markets. Chapter 3 examines the challenges to financial stability posed by the rapid rise of risky business segments in fintech. Policies that target both fintech firms and incumbent banks proportionately are needed.
As countries strive to promote an inclusive and green recovery from the COVID-19 pandemic—and formulate responses to the immediate impacts of increased energy prices—they face shared challenges to secure tax revenues, address inequalities, and reduce greenhouse gas emissions. National tax policies are under pressure to deal with cross-border spillovers—one country’s action affects other countries.
Sub-Saharan African countries find themselves facing another severe and exogenous shock. Russia’s invasion of Ukraine has prompted a surge in food and fuel prices that threatens the region’s economic outlook. This latest setback could not have come at a worse time—as growth was starting to recover and policymakers were beginning to address the social and economic legacy of COVID-19 pandemic and other development challenges.
Regional Economic Outlook, April 2022, Middle East and Central Asia: Divergent Recoveries in Turbulent Times
The war in Ukraine and sanctions on Russia are exacerbating the divergence in recovery prospects for the Middle East and Central Asia. Despite better-than-expected momentum in 2021, the economic environment in 2022 is defined by extraordinary headwinds and uncertainties, particularly for commodity importers, with higher and more volatile commodity prices, rising inflationary pressures, faster-than-expected monetary policy normalization in advanced economies, and a lingering pandemic.