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Mr. Paul Henri Mathieu and Clinton R. Shiells

This paper focuses on the Doha Development Agenda. The paper highlights that over the past 20 years, world trade has grown twice as fast as world real GDP, deepening economic integration and raising living standards. The paper underscores that the launch of a new trade round in Doha in November 2001 was a major breakthrough following the debacle in Seattle in 1999. The new round places the needs and interests of developing countries at the heart of its work, but a successful outcome for rich and poor nations alike is by no means a foregone conclusion.

Mr. Enrique A Gelbard and Jimmy McHugh

Over the past four years, real GDP growth in Armenia has outpaced that of its neighbors and other low-income countries, averaging 12 percent a year (see chart). Also, since 2001, inflation has been low, at an annual average rate of 4 percent, and poverty and inequality have fallen rapidly. The government’s sustained commitment to economic stability and reform, especially since 2001, has been a critical element in this progress. Armenia is now at a cusp—more reforms can spur further gains, but faltering could put them at risk.

Yves Rovani

This paper highlights the sources of payments problems in less developed countries. Growth in the industrial countries has a direct impact on the current account of the developing countries through its influence on both the prices and volumes of their exports. An increase in the real effective exchange rate is clearly a fundamental determinant of a deteriorating current account since, other things being equal, it tends to raise domestic demand for imports and to reduce foreign demand for exports.

International Monetary Fund. External Relations Dept.

For the latest thinking about the international financial system, monetary policy, economic development, poverty reduction, and other critical issues, subscribe to Finance & Development (F&D). This lively quarterly magazine brings you in-depth analyses of these and other subjects by the IMF’s own staff as well as by prominent international experts. Articles are written for lay readers who want to enrich their understanding of the workings of the global economy and the policies and activities of the IMF.

International Monetary Fund

This 2005 Article IV Consultation highlights that since the last Article IV Consultation, Bangladesh’s economy has continued to expand, supported by a stable macroeconomic environment and progress in implementing structural reforms, broadly in line with the recommendations made by the IMF Executive Board. Good progress has been made in strengthening the banking system. Bangladesh Bank has raised minimum capital requirements, taken steps to reduce insider lending, and improved the institutional framework for the prudential supervision of the financial system.

International Monetary Fund. Western Hemisphere Dept.
This 2017 Article IV Consultation highlights a decline in the real GDP of Trinidad and Tobago of 6 percent in 2016, with a further decline of 3.25 percent projected by the IMF staff in 2017. The combined impact of weak growth and low energy sector revenues increased the overall fiscal deficit to 12.1 percent of GDP in fiscal year 2016, though it is expected to drop to 11.0 percent of GDP in fiscal year 2017. Meanwhile, the current account deteriorated by 14.5 percentage points to a deficit of 10.7 percent of GDP in 2016. The government has taken steps to adjust fiscal imbalances, through efforts to reform the energy tax regime, reduce fuel subsidies, and boost nonenergy revenues.
International Monetary Fund. External Relations Dept.
The IMF Executive Board announced on August 3 that it had completed the ninth review of Turkey’s economic program supported by the three-year Stand-By Arrangement. The Board’s decision will enable Turkey to draw SDR 1.2 billion (about $1.5 billion) immediately from the IMF. The text of News Brief No. 01/73, as well as a statement issued on July 28 by IMF First Deputy Managing Director Stanley Fischer (see page 262) is available on the IMF’s website (www.imf.org).
Tahsin Saadi Sedik and Mr. Serhan Cevik
This paper investigates the causes of extreme fluctuations in commodity prices from 1990 to 2010. Analyzing two very distinct commodities-crude oil and fine wine, we find that macroeconomic factors are the main determinants of commodity prices. Although supply constraints have the expected effect, aggregate demand growth is the key factor. The empirical results show that while advanced economies account for more than half of global consumption, emerging economies make up the bulk of the incremental change in demand, thereby having a greater weight in commodity price formation. The results also show that the shift in the composition of aggregate commodity demand is a recent phenomenon.
Samya Beidas-Strom and Mr. Andrea Pescatori
How much does speculation contribute to oil price volatility? We revisit this contentious question by estimating a sign-restricted structural vector autoregression (SVAR). First, using a simple storage model, we show that revisions to expectations regarding oil market fundamentals and the effect of mispricing in oil derivative markets can be observationally equivalent in a SVAR model of the world oil market à la Kilian and Murphy (2013), since both imply a positive co-movement of oil prices and inventories. Second, we impose additional restrictions on the set of admissible models embodying the assumption that the impact from noise trading shocks in oil derivative markets is temporary. Our additional restrictions effectively put a bound on the contribution of speculation to short-term oil price volatility (lying between 3 and 22 percent). This estimated short-run impact is smaller than that of flow demand shocks but possibly larger than that of flow supply shocks.