This Selected Issues paper and Statistical Appendix deals with the issue of low growth in Algeria. A growth-accounting exercise indicates that negative total factor productivity growth explains Algeria’s low growth rates. This paper highlights the sources of this low growth that mainly consist of incomplete structural reforms and the weaknesses of Algeria’s institutions. It describes policy recommendations, focusing on the institutional reforms required to improve the business environment. The paper also analyzes Algeria’s monetary policy in the context of volatile hydrocarbon revenues.
The Middle East and North Africa (MENA) is an economically diverse region that includes countries with a common heritage, vastly different levels of per capita income, and a common set of challenges (see Box 1). Historically, dependence on oil wealth in many countries and a legacy of central planning in other countries have played major roles in shaping the region’s development strategies.
The Middle East and North Africa (MENA) is an economically diverse region. Despite undertaking economic reforms in many countries, and having considerable success in avoiding crises and achieving macroeconomic stability, the region’s economic performance in the past 30 years has been below potential. This paper takes stock of the region’s relatively weak performance, explores the reasons for this out come, and proposes an agenda for urgent reforms.
This paper presents four studies on selected issues of the Chilean economy. The new framework for fiscal policy represented by the authorities' target of a central government structural surplus of 1 percent of GDP is also discussed. This study examines whether the variance of the cyclical component of output in Chile and 11 other countries increased during the 1990s, a period during which the variance of inflation declined. The alternative measures of potential output for Chile are also estimated.
This note discusses Chile's macroeconomic policy framework, the role of institutions in Chile, policies over time, export specialization and economic growth, trade policy strategy and recent agreements, an overview of recent developments in capital markets, and corporate financing in Chile. The role of the public sector in establishing debt benchmarks, an assessment of the country’s external position, distress among Chile's foreign-owned firms, balance sheets of public sector finances, and an update on the Chilean banking system have been noted in this paper.
This Selected Issues paper and Statistical Appendix analyzes economic developments in Colombia during 1996–99. Output growth slowed sharply in 1996 and early 1997, but subsequently rebounded owing to stronger exports, a temporary boom in world coffee prices, and an easing of credit policy. Despite efforts at addressing the fiscal imbalances, the nonfinancial public sector deficit widened further to more than 4 percent of GDP in 1997. Monetary policy during 1996 and most of 1997 was geared toward stimulating domestic demand.
India has made substantial progress since 1991 on the path toward macroeconomic and structural reform. The benefits are becoming evident in a robust economic expansion, led by a recovery of private investment and rapid export growth. The external position has also strengthened considerably, while inflation has come down. Nonetheless, major economic policy challenges lie ahead, and the Indian Government will need to persevere with reform if India is to emulate the rapid economic growth and durable progress in poverty reduction achieved in countries in East Asia.
For most of the period since independence, India has combined a highly interventionist and inward-looking approach to economic development with generally conservative macroeconomic policies. The development strategy was to build a large, publicly owned, heavy industry sector while leaving the production of consumer goods (imports of which were banned) and agriculture mainly to the private sector. To support this strategy. India relied on a complex system of industrial licensing, high protection against imports, and extensive government intervention in financial intermediation. Macroeconomic policies were driven by the overriding desire for stability and low inflation; on the whole, public sector deficits were moderate and monetary growth was low. Household savings grew quite rapidly as the deleterious effects of financial repression were partly mitigated by low inflation, the spread of bank branches, and the introduction of small savings schemes.
By the end of the 1980s, macroeconomic fundamentals in India were seriously deficient, leaving the country vulnerable to both domestic and external shocks. The deterioration in the fiscal accounts that began in the first half of the decade was not corrected, leading to a worsening of the external current account deficit. These internal and external imbalances were accompanied by large-scale borrowing, and both public and external debt accumulated rapidly. With much of the new debt on commercial terms, the debt-service burden increased substantially. The impact of the macroeconomic imbalances was exacerbated by the continued rigidities and distortions in the economy.
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.