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Business and Economics > Finance: General

You are looking at 1 - 10 of 307 items for :

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Cover Selected Issues Papers
Korea in a Changing Global Trade Landscape: Korea
Hua Chai
and
Hyeryoun Kim
The global trade landscape is being reshaped by geoeconomic fragmentation and the rise of industrial policies. This paper studies the impact of these trends on the export-oriented Korean economy. It documents both positive and negative effects of U.S.-China trade tensions, technology and supply chain restrictions, and industrial policies of major economies on Korea's trade and FDI, particularly that of its strategic sectors. To navigate the changing global trade landscape, Korea needs to focus on promoting innovation to maintain competitiveness, diversifying export destinations and supply chains, and expanding exports of services.
Keywords:
trade policy; industrial policy; geoeconomic fragmentation; innovation; U.S.-China trade tension; Korea export share; U.S.-China trade relation; Korea's export; export destination; Exports; Trade tensions; Competition; Manufacturing; Tariffs; Global; North America
Cover IMF Working Papers
Production Network Features of Industrial Policy
Vanya Georgieva
Industrial policy has gained popularity in recent years and across all regions and income levels. Consequently, it is increasingly important to understand how governments choose the sectors they target. This analysis explores the role of domestic production networks in sector targeting, while controlling for other sector and global value chain characteristics. Combining datasets on industrial policy (Global Trade Alert) and input-output linkages (ICIO, OECD) provides novel insight into the network features of industrial policy. In particular, a sector’s ‘centrality’—i.e., its degree of connectedness - within the domestic production network is an important and significant predictor of sector intervention. The results indicate that industrial policy is used differently across regions, income groups, time periods, and types of policy tools. Notably, emerging economies tend to target more central sectors, while advanced economies target less central ones, on average. However, there has been a global shift toward more central sectors over time. Lastly, subsidies are deployed on more central sectors, while tariffs are used on less central ones.
Keywords:
Industrial Policy; Trade Policy; Subsidies; Global Value Chains; Production Networks; Spillovers; production network feature; input-output linkage; sector intervention; advanced economy; import tariff result; country-sector control variables; standard deviation; Exports; Income; Export restrictions; Emerging and frontier financial markets; Global; Asia and Pacific; Europe; Middle East and Central Asia
Cover IMF Working Papers
Identifying Determinants of FX Stability in Mozambique
Samuel Mann
and
Alexis Meyer-Cirkel
In early 2021, as monetary policy tightening reversed a multi-year trend of Metical depreciation, the exchange rate vis-à-vis the US dollar de facto stabilized. This report discusses elements of the market structure and other drivers of Metical stability since mid-2021. The particularities of Mozambique, a small open economy with an export sector that has a strong foreign currency cost structure, provide important insights into that discussion, as does the structure and development of the Foreign Exchange (FX) market.
Keywords:
Mozambique; Foreign Exchange Stability; Exchange Rate Regimes; Central Bank Policy; FX Market Structure; Market Intervention; FX stability; cost structure; development of the foreign exchange; reference rate; MZN exchange rate fluctuation; market participant; FX supply; Exchange rates; Currency markets; Currencies; Imports; Global
Cover Regional Economic Outlook: Asia and Pacific, November 2024
Regional Economic Outlook: Asia and Pacific, November 2024
Asia and Pacific: Resilient Growth but Higher Risks
International Monetary Fund. Asia and Pacific Dept

Abstract

Short-term prospects for Asia and the Pacific have improved slightly compared to the IMF’s April forecasts, even though growth is still expected to moderate in 2024 and 2025. The regional growth projection for 2024 has been marked up to 4.6 percent from 4.5 percent in April, largely reflecting the over-performance in the first half of the year, and the region is forecast to contribute roughly 60 percent to global growth in 2024. In 2025, more accommodative monetary conditions are expected to support activity, resulting in a slight upward growth revision to 4.4 percent from 4.3 percent in April. Inflation has retreated in much of the region. At the same time, risks have increased, reflecting rising geopolitical tensions, uncertainty about the strength of global demand, and potential for financial volatility. Demographic change will act increasingly as a brake on activity, though structural shifts into high-productivity sectors such as tradable services hold promise to sustain robust growth.

Keywords:
Asia and the Pacific; growth; inflation; monetary policy; fiscal policy; China; AE Asia; emerging economy; headline inflation; foreign direct investment; monetary management; Asia EMDEs; EM Asia; Pacific island economy; ASEAN region; export opportunity; exports to the world; monetary policy response; Exports; Emerging and frontier financial markets; Central bank policy rate; Foreign direct investment; Asia and Pacific; Global; Pacific Islands; Central Asia
Cover Regional Economic Outlook, Middle East and Central Asia, October 2024
Regional Economic Outlook, Middle East and Central Asia, October 2024
Navigating the Evolving Geoeconomic Landscape
International Monetary Fund. Middle East and Central Asia Dept.

Abstract

Economic growth in the Middle East and North Africa and Caucasus and Central Asia regions is projected to strengthen in the near term, but only to the extent that current challenges abate. Ongoing conflicts and oil production cuts are dampening economic performance, and medium-term growth prospects have weakened over the past two decades. Moreover, high uncertainty looms, with key risks including escalating conflicts, increased geoeconomic fragmentation, and commodity price volatility. To boost growth and create jobs—especially for women and youth—reform priorities include strengthening governance, encouraging private sector investment, and advancing financial development.

Keywords:
Middle East; North Africa; Caucasus; Central Asia; Gaza; Sudan; Lebanon; trade patterns; economic growth; reforms; growth prospects; shocks; conflicts; uncertainty; economic performance; growth prospects; risks; oil production cuts; OPEC+; investment; geoeconomic fragmentation; IMF; governance; medium-term; capital deepening; women; youth; employment; commodity price volatility; private sector; financial development; CCA region; CCA economy; CCA country; IMF staff calculation; oil exporter; Total factor productivity; Financial sector development; Oil exports; Inflation; Labor force participation; East Africa; Central Asia and the Caucasus; Global
Cover IMF Working Papers
Europe’s Shift to EVs Amid Intensifying Global Competition
Philippe Wingender
,
Jiaxiong Yao
,
Robert Zymek
,
Benjamin Carton
,
Diego A. Cerdeiro
, and
Anke Weber
European countries have set ambitious goals to reduce their carbon emissions. These goals include a transition to electric vehicles (EVs)—a sector that China increasingly dominates globally—which could reduce the demand for Europe’s large and interconnected auto sector. This paper aims to size up the tradeoffs between Europe’s shift towards EVs and key macroeconomic outcomes, and analyze which policies may sharpen or ease them. Using state-of-the-art macroeconomic and trade models we analyze a scenario in which the share of Chinese cars in EU purchases rises by 15 percent over 5 years as a result of both a positive productivity shock for car production in China and a demand shock that shifts consumer preferences towards Chinese cars (given China’s dominance in the EV sector). We find that for the EU as a whole, the GDP cost of this shift is small in the short term, in the range of 0.2-0.3 percent of GDP, and close to zero over the long term. Adverse short-run effects are more significant for smaller economies heavily reliant on the car sector, mainly in Central Europe. Protectionist policies, such as tariffs on Chinese EVs, would raise the GDP cost of the EV transition. A further increase in Chinese FDI inflows that results in a significant share of Chinese EVs being produced in Central European economies, on the other hand, would offset losses in these economies by supporting their shift from supplying the internal combustion engine (ICE) production chain to that of EVs.
Keywords:
Electric vehicles; green transition; trade; tariffs; global value chains.; protectionist policy response; GDP cost; EV share; Europe's shift; shift to electric vehicles; Foreign direct investment; Productivity; Imports; Europe; Global
Cover IMF Staff Country Reports
Seychelles: 2024 Article IV Consultation, Second Reviews Under the Arrangement Under the Extended Fund Facility and the Arrangement Under the Resilience and Sustainability Facility, Requests for a Waiver of Nonobservance and Modification of Performance Criteria-Press Release; and Staff Report; and Statement by the Executive Director for Seychelles
International Monetary Fund. African Dept.
This paper presents Seychelles’ 2024 Article IV Consultation, Second Reviews under the Arrangement under the Extended Fund Facility (EFF) and the Arrangement under the Resilience and Sustainability Facility (RSF), Requests for a Waiver of Nonobservance and Modification of Performance Criteria. The government has made considerable progress under the EFF and RSF Arrangements—strengthening fiscal and external buffers, reducing public debt, and enhancing the policy framework to address climate change. Long-term challenges center on the limits to sustainable tourism-based growth, economic diversification, and Seychelles’ high vulnerability to the effects of climate change. The policy framework is guided by the need to preserve macroeconomic and financial sustainability, build fiscal and external buffers, as well as advance prospects for long-term inclusive growth and economic resilience, in line with the objectives under the EFF and RSF. Toward this end, the mission agreed with the authorities on a revised macroeconomic framework and quantitative program targets consistent with the program objectives of steady fiscal consolidation and reduction of public debt over the medium-term.
Keywords:
framework enhancement; Seychellois authorities; government efficiency; tourism sector; government priority; Tourism; Government debt management; Imports; Global; Africa
Cover Selected Issues Papers
Bulgaria in Global Value Chains: Leveraging Integration with the EU: Bulgaria
Giacomo Magistretti
and
Iglika Vassileva
As a small open economy, Bulgaria benefits from economic exchanges with global partners. However, after a boost before the Global Financial Crisis and EU accession, its integration in global value chains has been growing only modestly in recent years and it remains particularly low when it comes to links with EU partners. To capitalize from the integration with the EU Single Market and exploit the opportunities that will come from joining the euro zone and the Schengen area, Bulgaria should focus on enhancing its non-cost competitiveness by improving its governance and investing in infrastructure and human capital.
Keywords:
Bulgaria; global value chains; forward linkages; backward linkages; international trade; machine learning; SHAP values; EU accession; EU single market; leveraging integration with the EU; EU country; links with EU; Exports; Foreign direct investment; Imports; Competition; Global
Cover IMF Staff Country Reports
Spain: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper focuses on dissecting Spain’s soaring tax revenues and their implications for projections. This paper combines an econometric approach based on historical time series with a more detailed analysis of relevant developments for each tax over the post-Coronavirus disease period. The analysis finds that several factors contributed to the 2020–2023 revenue boom, including large employment gains and the so-called fiscal drag, among others. The revenue boom closed almost half of Spain’s revenues-to-gross domestic product gap relative to peer countries—from 7.1 percentage points in 2019 to 4 in 2023. Given the need for sizeable and sustained fiscal consolidation to rebuild fiscal buffers and set debt on a downward trajectory, continued efforts to boost revenues will be needed. In particular, reforms of the tax system in areas not considered in this paper, such as environmental taxation, could raise additional resources while addressing externalities and supporting the green transition.
Keywords:
Non-tourism services productivity growth; PIT revenue boom; labor productivity growth factor; VAT revenue; product market regulation; Service exports; Export performance; Personal income tax; Employment; Value-added tax; Global; Europe
Cover IMF Staff Country Reports
Kiribati: Selected Issues
International Monetary Fund. Asia and Pacific Dept
This Selected Issues paper focuses on a case study on copra subsidy in Kiribati. The copra subsidy, disbursed as a minimum support price, is a major part of the social safety net in Kiribati. The subsidy has multiple purposes—including as a means to transfer resources to the outer islands and to stem migration to the capital. The horizontal diversification model shows that a higher subsidy on copra diverts production and labor towards copra but lowers overall income. The vertical diversification model demonstrates how a subsidy on a primary product increases its supply but reduces production of the final good. Considering the benefits, the government could boost the subsidy’s efficiency, replace the scheme with a poverty-targeted social assistance program, or impose a cap on payments. Development partners, including the IMF and the World Bank, stand ready to provide support in both areas as needed.
Keywords:
COPRA subsidy; Copra support price; price support scheme; impact of subsidy; household income expenditure survey report; cut support price; Price incentives; Agricultural commodities; Income; Exports; Pacific Islands; Global