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International Monetary Fund. Asia and Pacific Dept

Abstract

Asia has achieved remarkable economic success over the past five decades. Hundreds of millions of people have been lifted out of poverty, and successive waves of economies have made the transition to middle-income and even advanced-economy status. And whereas the region used to be almost entirely dependent on foreign know-how, several of its economies are now on the cutting edge of technological advance. Even more striking, all of this has happened within just a couple of generations, the product of a winning mix of integration with the global economy via trade and foreign direct investment (FDI), high savings rates, large investments in human and physical capital, and sound macroeconomic policies.

International Monetary Fund. African Dept.

Abstract

The intrinsic links between climate change and the COVID-19 pandemic have elevated global calls for policymakers to take immediate action on both fronts. Fiscal stimulus supporting recovery from the pandemic can be designed to simultaneously address climate change. In turn, this could help reduce the spread of future pandemics as climate change is a threat multiplier for pandemics. Destruction of the environment and biodiversity makes pandemics more likely while pollution and other man-made factors driving climate change weaken the health of human beings, raising their vulnerability to viruses and other diseases.

International Monetary Fund. Asia and Pacific Dept

Abstract

The global expansion that began two years ago appears to have peaked and become less synchronized across economies. While economic activity moderated in advanced economies during the first half of 2018 compared to 2017, it remained steady in most emerging economies (Figure 1). Growth was lower than expected in the euro area, Japan, and the United Kingdom. Meanwhile, in the United States, domestic demand continued to be buoyant, underpinned by low unemployment and a historically large, temporary fiscal expansion. Among emerging market economies, growth remained strong in emerging Asia but weakened in Argentina, Brazil, and Turkey. Several downside risks highlighted in the April 2018 World Economic Outlook (WEO) have increased or partially materialized, such as rising trade tensions and capital outflows from emerging economies with weaker fundamentals. With this more mixed global growth picture, there are already signs that trade is slowing.

International Monetary Fund. African Dept.

Abstract

Every second, the region has averaged 106 new internet users.1 This fast-paced digital revolution holds the promise of transforming economies and people’s lives. It takes on added importance as countries across the region grapple with the unprecedented health and socio-economic fallout of the COVID-19 pandemic. All policy levers are being deployed to protect lives and livelihoods. Digital solutions have helped to provide more resilience and allowed for rapid, flexible, and inclusive policy responses to the pandemic.

International Monetary Fund. Asia and Pacific Dept

Abstract

Asia’s heavy reliance on trade in general, and its integration in global value chains in particular, have been critical elements behind the region’s stellar growth record. But rising income levels and wages in the region combined with a less buoyant medium-term outlook in advanced economies suggest the need for Asia to reconsider its growth model, currently oriented toward meeting final demand in other regions (IMF 2016, Mano 2016). In addition, China has not exited labor-intensive light manufacturing sectors as quickly as Korea and Japan did in earlier eras, possibly limiting opportunities for the next wave of Asian developing economies and again suggesting the need for a new model (Mathai and others 2016). Finally, the secular decline in manufacturing’s share in employment combined with the fast rise in automation (for example, robotics), also points to a needed shift toward tradable services (IMF 2018e).

International Monetary Fund. Asia and Pacific Dept

Abstract

The April 2017 Regional Economic Outlook: Asia and Pacific documented that productivity growth in a number of economies in Asia—just as in the rest of the world—slowed after the global financial crisis, and that this slowdown was most severe in the region’s advanced economies and in China (Figure 11). In addition, the slowdown was not a temporary phenomenon, but rather has persisted and even become the “new normal” in some economies. IMF (2018c), the third background paper to this Regional Economic Outlook, complements the earlier analysis, which was based on national accounts data, by examining firm-level data from the Orbis data set for six advanced and emerging market Asian economies for which sufficient data are available (China, Japan, Korea, Malaysia, the Philippines, and Thailand), during the period 2003–15.

International Monetary Fund. Asia and Pacific Dept

Abstract

The final challenge for Asia addressed in this Regional Economic Outlook: Asia and Pacific is how to reap the potential benefits of the digital revolution while minimizing its costs. While digitalization and automation are not new, they have accelerated in recent years, and a new wave of innovation—triggered by advances in artificial intelligence, robotics, computing power, and cryptography, as well as the explosion of big data—is reshaping the global economy. More so than during past periods of innovation, including the spread of personal computers in the 1980s and the rise of the internet in the 1990s, today’s technological advances are multiple and overlapping, creating synergies and accelerating outcomes. The digital revolution is affecting all sectors and activities of the economy, with a far-reaching social and economic impact. The new technologies are general-purpose in nature, with the potential—over time—to transform the global economy, substantially boost productivity, and fundamentally alter the way humans live and work, much as the steam engine and electricity did. That said, history suggests that such benefits may be observed only with a delay—after a sufficient stock of the new technology and complementary innovations, as well as the capital investments to implement them, are built up. And by the same token, the substantial disruptions and dislocations that may occur may also take place only over time. It is likely that neither the opportunities nor the challenges related to digitalization have yet become fully apparent.

International Monetary Fund. Asia and Pacific Dept

Abstract

Asia is the world’s most dynamic economic region. But it faces a number of serious challenges over the medium to long term—that its trade-reliant growth strategy will no longer be viable (at least in its current form), that population aging will weigh on many dimensions of economic performance, that productivity growth may not accelerate again, and that the ongoing digitalization of its economies may lead to major disruptions even as k boosts productivity over time.

International Monetary Fund. African Dept.

Abstract

Sub-Saharan Africa is facing an unprecedented health and economic crisis. One that threatens to throw the region off its stride, reversing the encouraging development progress of recent years. Furthermore, by exacting a heavy human toll, upending livelihoods, and damaging business and government balance sheets, the crisis threatens to slow the region’s growth prospects in the years to come. Previous crises tended to affect countries in the region differentially, but no country will be spared this time.

International Monetary Fund. Fiscal Affairs Dept.

Abstract

This report discusses fiscal trends in policies aimed at reducing fiscal vulnerabilities and boosting medium-term growth, recent fiscal developments and the fiscal outlook in advanced economies, emerging markets, and low-income developing countries; recent trends in government debt and analysis of changes in fiscal balances, revenue, and spending; potential fiscal risks; and growth from the fiscal policies. It also describes how digitalization can help governments improve implementation of current policy and widen the range of policy options, and opportunities and risks for fiscal policy, including improvements in policy implementation, the design of future policy, and how digitalization can create opportunities for fraud and increase government vulnerabilities.