Browse

You are looking at 1 - 10 of 16 items for :

  • Type: Journal Issue x
Clear All Modify Search
Patrick Blagrave
Co-movement (synchronicity) in inflation rates among a set of 13 emerging and developing countries in Asia is shown to be strongest for the food component, partly due to common rainfall shocks—a result which the paper terms the ‘monsoon effect.’ Economies with higher trade integration and co-movement in nominal effective exchange rates also experience greater food-inflation co-movement. By contrast, cross-country co-movement in core inflation is weak and the aforementioned determinants have little explanatory power, suggesting a prominent role for idiosyncratic domestic factors in driving core inflation. In the context of the growing literature on the globalization of inflation, these results suggest that common weather patterns are partly responsible for any role played by a so-called ‘global factor’ among inflation rates in emerging and developing economies, in Asia at least.
Mr. Paul Cashin and Rahul Anand

Abstract

High and persistent inflation has presented serious macroeconomic challenges in India in recent years, increasing the country’s domestic and external vulnerabilities. A number of factors underpin India’s high inflation. This book analyzes various facets of Indian inflation—the causes, consequences, and policies being implemented to manage it. Several chapters are devoted to analyzing and managing food inflation, given its significance in driving overall inflation dynamics in India.

International Monetary Fund. Asia and Pacific Dept
KEY ISSUES Context: Successful elections for a new Constituent Assembly and formation of a new government have stabilized the political situation. Macroeconomic situation and outlook: Nepal’s macroeconomic situation remains broadly favorable. Growth is projected to recover in 2013/14 owing to good monsoons, robust growth in services, and increased public spending. Inflation is moderating, in line with developments in India. High remittance inflows are supporting a strong external position, as well as high reserve money growth. Risks to the outlook are slightly tilted to the downside, involving slower-than-expected growth in countries hosting Nepali workers and domestic financial sector risks. Medium term prospects: While remittances are expected to continue to support the external position, the outlook for growth depends on improving the environment for private investment. This requires a decisive boost in public capital spending, and structural reforms in key areas. Financial sector: Despite progress, significant vulnerabilities remain. The recent assessment under the FSAP, Nepal’s first, raised concerns about asset quality and interconnectedness, as well as financial sector infrastructure—including the legal framework—and supervision and crisis preparedness. At the same time, a largely unsupervised cooperatives sector is growing rapidly. Key policy recommendations: Monetary policy should aim at controlling the volatility and level of excess reserves in the financial system, implying a modest tightening of monetary conditions. The exchange rate peg to the Indian rupee provides a useful nominal anchor for the economy, and the real exchange rate is broadly in line with fundamentals. Capital spending needs to be boosted to provide key infrastructure, and reforms implemented to support private investment, which will help generate sustained economic growth and employment opportunities. In the financial sector, further reforms to bolster regulation and supervision, and improve financial infrastructure are needed to reduce risk and increase access to finance.
International Monetary Fund
In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.
International Monetary Fund
In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.
International Monetary Fund
Assessment Letters or Statements may be prepared for member countries with Fund-supported programs; receiving Fund emergency assistance; with staff-monitored programs; or surveillance-only cases. They are typically produced for use by the country with multilateral or bilateral donors or creditors, in particular the World Bank and other International Financial Institutions.
Mr. Jan Kees Martijn, Markus Berndt, Abu Shonchoy, and Mr. Paolo Dudine
This paper studies the spending and absorption of aid in PRGF-supported programs, verifies whether the use aid is programmed to be smoothed over time, and analyzes how considerations about macroeconomic stability influence the programmed use of aid. It finds that PRGF-supported programs allow countries to use most or almost all increases in aid within a few years. The paper finds some evidence that the programmed absorption of aid is higher in countries where reserve coverage is above a certain threshold, whereas programmed spending does not seem to depend on inflation. Finally, it shows that the presence of a PRGFsupported program does not constrain the actual spending and absorption of aid.
International Monetary Fund
Limited progress has been made in addressing Nepal’s structural weaknesses in tax administration and public financial management. Macroeconomic performance under the recent Poverty Reduction and Growth Facility (PRGF)-supported program has been stable. The outlook for 2007–08 remains stable. Although the macroeconomic performance has been stable, progress on structural reforms has been held back by the fragile political circumstances. Public enterprises and the Nepal Oil Corporation, in particular, pursue quasi-fiscal activities involving significant subsidies. Nepal’s growth prospects depend most importantly on a peaceful political transition.
Mr. Robert Gillingham

Abstract

The Poverty Reduction and Growth Facility (PRGF) is used by the IMF to provide support for countries’ implementation of their poverty reduction and growth strategies. A key requirement in the design of PRGF programs is understanding the effects of reform program measures on vulnerable groups—particularly the poor—and how to devise measures to mitigate any negative effects. Poverty and social impact analysis (PSIA) is a critical instrument for pursuing this goal. The IMF has therefore established a small group of staff economists to facilitate the integration of PSIA into PRGF-supported programs. In this book, the group’s members review analytical techniques used in PSIA as well as several important topics to which PSIA can make valuable contributions. These reviews should prove useful and interesting to readers interested in PSIA in general and the IMF’s PSIA efforts in particular.

Mr. Edimon Ginting
The paper attempts to answer some important questions around the inflationary process in Nepal, particularly the transmission of inflation from India. Because the Nepali currency is pegged to the Indian rupee and the two countries share an open border, price developments in Nepal would be expected to mirror to those in India. The results show that inflation in India and inflation in Nepal tend to converge in the long run. Our estimates indicate that the passthrough of inflation from India to Nepal takes about seven months. The paper draws some implications for the conduct of monetary policy in Nepal.