This Selected Issues paper addresses some of the key policy and economic challenges facing the Canadian economy. The paper presents a new approach to predicting the business cycle in the context of the Canadian economy. This approach uses a range of parametric and nonparametric tests to gauge the ability of various indicators to predict turning points in the business cycle. The paper also presents a model that links the inflation rate to the business cycle and the rates of change in the exchange rate and in unit labor costs.
Sub-Saharan Africa is contending with an unprecedented health and economic crisis—one that, in just a few months, has jeopardized years of hard-won development gains and upended the lives and livelihoods of millions.
This 2001 Article IV Consultation highlights that since early 2001, domestic demand growth has recovered in New Zealand and contributed to sustain GDP growth in the wake of weaker net exports, owing to the economic slowdown in the rest of the world. The sharp rise in economic activity pushed the economy to a high level of resource use, as capacity utilization rates rose markedly in 2001. An improvement in business and consumer confidence in the first months of 2002 suggests that domestic demand is likely to maintain its momentum in the first half of 2002.
Sound fiscal and monetary policies have provided a strong foundation for the longest U.S. economic expansion on record. Executive Directors agreed that the U.S. economy strength had been supported by rising real income, enhanced profitability, and rising household wealth. Directors cautioned the need to reduce the domestic demand growth, and maintain monetary and fiscal policies. Directors expressed concern about the decline in personal saving, rise in household and corporate debt levels, and supported preemptive efforts to limit potential bank balance sheet risks.
This 2002 Article IV Consultation highlights that after four years of strong growth, economic activity in Cyprus has tailed off since late 2001, affected by the global economic slowdown. The authorities estimate growth for 2002 to have declined to 2.3 percent, with falling tourist arrivals and weakening consumer and business confidence. Inflation has risen to 2.9 percent year-over-year in December on account of indirect tax increases, but core inflation remains low. The current account deficit is expected to have deteriorated in 2002 to 5.5 percent, on account of lower tourism receipts and temporary factors.
The Mauritian economy showed strong performance owing to its sound macroeconomic policies. Executive Directors emphasized the need to remain competitive and address the growing unemployment problem. They commended the efforts to support the developments in financial services, free port activities, and information and communications technology. They appreciated the tightening of the monetary policy and stressed the need to strengthen the financial position and ensure fiscal sustainability. They welcomed the assessment of the effectiveness and ef