International Monetary Fund. External Relations Dept.
SlNCE the dissolution of the Soviet Union, most of the former member states have retained the ruble as their national currency but have followed independent monetary policies. Such a combination is not sustainable. With mounting disarray in the ruble area, each state must now quickly adopt either a common monetary policy or a separate national currency.
International Monetary Fund. External Relations Dept.
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Developments in financial markets during the past eighteen months and signs of a softening of growth in the industrial countries since the beginning of 1995 have highlighted the sensitivity of financial markets to economic imbalances and the downside risks to the outlook. However, although economic performance has been adversely affected in some countries, there are many reasons to expect that the global economic expansion will proceed at a satisfactory pace. Fears of a pickup in inflation in the industrial countries have largely abated, long-term interest rates have again fallen substantially in most countries following the sharp increases in bond yields during 1994, coordinated foreign exchange market intervention by leading central banks and supportive policy developments have helped to correct the misalignment of key currencies that had emerged earlier in the year, contagion effects from the financial crisis in Mexico have been contained, and growth in most of the emerging market countries in the developing world and among the transition countries has remained robust. While the short-term projections for the industrial countries have been marked down somewhat, the forecasts for many developing countries are now even stronger than expected in the May 1995 World Economic Outlook (see Table 1).
Bond yields and exchange rates have posted relatively large movements over the past year and a half. During 1994. long-term interest rates rose between 175 and 500 basis points across the industrial countries. They then tumbled in 1995. largely reversing the 1994 run-up in many cases. Although such swings are not unusual by the standards of the 1970s and 1980s. They were nevertheless surprisingly large in view of the high degree of price stability that has been reestablished in most countries (Chart 15). There have also been wide shifts in exchange rates. By mid-1995, for example, the effective exchange rate of the yen had appreciated by almost 25 percent from its already high level at the end of 1993. Then between mid-1995 and early fall, the yen depreciated sharply, roughly reverting to its late 1993 value. Movements in other currencies have been less dramatic but have nevertheless contributed to widespread concerns that exchange rate movements may have been restraining growth in countries with strong currencies, while adding to inflationary pressures in countries with depreciated currencies.
Robust growth in developing countries in recent years has been associated with increasing openness and greater integration into the global economy (Chart 18). Traditional trade linkages have been deepened and new linkages developed by more open trade and exchange regimes, increased diversification of developing country exports, and closer financial linkages. Increasing financial integration has both contributed to and reflected the successful performance of the developing countries. The industrial countries have clearly benefited from this process, especially during the recent slowdown when rapid growth in developing countries helped to sustain world trade and industrial country growth.
Les Perspectives de l'économie mondiale (PEM) présentent des analyses de l'évolution économique mondiale à court et moyen termes, préparées par les principaux économistes du FMI. Elles constituent une ressource respectée, centrale et fiable d'informations fouillées et équilibrées, permettant aux décideurs et aux dirigeants du monde entier de prendre le recul nécessaire. Publiées deux fois par an, les Perspectives de l’économie mondiale présentent sous une forme claire et pratique les perspectives en matière de croissance, d’inflation, de commerce international et d’emploi, et s'intéressent également à d'autres domaines économiques. Chaque numéro des PEM se penche sur les problèmes qui touchent les pays avancés, émergents et en développement. Les banques centrales, les économistes, les institutions financières, les chefs d’entreprises, les gouvernements, les groupes de réflexion et les chercheurs attendent avec impatience cette étude sans pareille de la situation actuelle et de ce qui se prépare.
For the first time since the late 1980s, recorded output is growing in most countries in transition. In some, such as Albania. Poland, and Slovenia, real GDP has already surged far above its trough. In others, including Armenia, the Baltic countries, Bulgaria, Croatia, the former Yugoslav Republic of Macedonia, Moldova, Mongolia, and Romania, economic recovery materialized later but is becoming more broadly based. At the same time, inflation is under better control in most transition countries, including Ukraine, Belarus, and most countries of central Asia and the Transcaucasus. Output performance continues to be bleaker in Russia, Ukraine, Belarus, and most of the countries of central Asia and the Transcaucasus, with further large declines in real GDP expected in 1995.
The World Economic Outlook, published twice a year in English, French, Spanish, and Arabic, presents IMF staff economists analyses of global economic developments during the near and medium term. Chapters give an overview of the world economy; consider issues affecting industrial countries, developing countries, and economies in transition to market; and address topics of pressing current interest. Annexes, boxes, charts, and an extensive statistical appendix augment the text.