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Business and Economics > Finance: General

You are looking at 1 - 10 of 157 items for :

  • Type: Journal Issue x
  • Climate; Natural Disasters and Their Management; Global Warming x
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Cover IMF Staff Country Reports
Indonesia: Financial Sector Assessment Program-Technical Note on Climate Risk Assessment
International Monetary Fund. Monetary and Capital Markets Department
Indonesia is exposed to both climate change transition risks and physical risks. With primary energy supply heavily dominated by fossil fuels, like many other countries, and as a major exporter of coal and liquefied natural gas, Indonesia is exposed to risks from the transition toward a carbon-neutral economy. Moreover, Indonesia is vulnerable to natural hazards, such as floods, droughts, and wildfires. With global temperatures rising, the frequency and severity of such events is expected to rise as well.
Keywords:
staff team of the International Monetary Fund; World Bank staff; Indonesia FSAP; risk scenario; earnings before interest and taxes; interest coverage ratio; current ratio; Natural disasters; Climate change; Greenhouse gas emissions; Global
Cover IMF Staff Country Reports
Grenada: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Grenada
International Monetary Fund. Western Hemisphere Dept.
Through end-June 2024, Grenada’s economy was experiencing sustained strong growth supported by buoyant tourism, moderating inflation, and a narrowing current account deficit. A surge in Citizenship-by-Investment (CBI) revenue supported a strong improvement in budget balances, a build-up of government deposits, and a reduction in public debt. On July 1, Hurricane Beryl caused damage in excess of 16 percent of GDP on the Grenadian islands of Carriacou and Petite Martinique, as well as in the northern parishes of the main island, affecting around 15 percent of the population. In response, the authorities triggered the suspension of fiscal rules to permit temporary deficit spending in support of the recovery and reconstruction.
Keywords:
infrastructure investment facility; IIP source data; TA mission; CBI revenue; tourism infrastructure; CBI program; Natural disasters; Caribbean; Global
Cover Technical Assistance Reports
Seychelles: Technical Assistance Report-Macroprudential Stress Testing and Climate Risk Analysis
International Monetary Fund. Monetary and Capital Markets Department
The Technical Assistance (TA) mission, conducted in Victoria, Seychelles, from May 2 to 17, 2023, assisted authorities with macroprudential stress testing and climate risk analysis. The stress testing focused on strengthening the solvency and liquidity frameworks: (i) for solvency, considering credit and foreign exchange risks to design robust scenarios, applying econometric techniques to enhance their risk assessment, and (ii) for the liquidity stress test, enhancing the cash flow analyses utilized by the authorities. For the climate risk analysis framework, the mission reviewed essential components, identified data sources, and provided hands-on training for climate risk assessment. Recommendations include fostering collaboration within CBB and other agencies, better leveraging available data, and improving data collection for stress testing and climate risk analysis. The CBS is expected to advance its framework and address data challenges to implement stress testing and climate risk analysis initiatives effectively.
Keywords:
Climate change; Climate scenario analysis; Environment; Financial sector policy and analysis; Liquidity stress testing; Macroprudential stress testing; Natural disasters; Solvency stress testing' Seychelles.; IMF stress; Department mission; Climate risk analysis diagnosis; mission Climate risk analysis component; IMF's Monetary; Loans; Nonperforming loans; Stress testing; Credit risk; Global
Cover IMF Staff Country Reports
Paraguay: Fourth Review Under the Policy Coordination Instrument, Request for Modification of Targets, Second Review Under the Arrangement Under the Resilience and Sustainability Facility, and Request for Rephasing Access-Press Release; and Staff Report
International Monetary Fund. Western Hemisphere Dept.
This paper focuses on Paraguay’s Fourth Review under the Policy Coordination Instrument (PCI), Request for Modification of Targets, Second Review under the Arrangement under the Resilience and Sustainability Facility (RSF), and Request for Rephasing Access. Buoyant activity continues, reflecting high consumer confidence and expanding services and manufacturing sectors. Going forward, it would be essential to maintaining fiscal sustainability and continue with the structural reform efforts. The program performance under the PCI has been solid, underpinned by actions to preserve macroeconomic stability to enhance the country’s economic growth prospects. Progress on the climate agenda under the RSF remains strong, bolstering Paraguay's resilience to climate shocks. Stabilizing the finances of the public pension system should remain a priority. Monetary policy should continue to be guided by data when contemplating further easing. The structural reform implementation should be accelerated in promoting growth and inclusiveness specifically through reforms in labor markets, addressing a high level of informality, and improving governance and addressing corruption.
Keywords:
RSF program implementation; Sustainability facility update; E. World Bank engagement; government expenditure efficiency; RSF Reviews; Resilience and Sustainability Facility update; Credit; Basel Core Principles; Global; South America
Cover IMF Staff Country Reports
Papua New Guinea: Third Reviews under Extended Arrangement under the Extended Fund Facility and an Arrangement under the Extended Credit Facility, Request for Extension, Rephasing of Access, and Modification of Quantitative Performance Criteria, and Request for an Arrangement under the Resilience and Sustainability Facility-Press Release; Staff Report; and Statement by the Executive Director for Papua New Guinea
International Monetary Fund. Asia and Pacific Dept
This paper presents Papua New Guinea’s Third Reviews under Extended Arrangement under the Extended Fund Facility (EFF) and an Arrangement under the Extended Credit Facility (ECF), Requests for Extension, Rephasing of Access, and Modification of Quantitative Performance Criteria, and Request for an Arrangement under the Resilience and Sustainability Facility (RSF). Papua New Guinea’s economic outlook remains positive, with growth expected to increase to 4.5 percent in 2024 and 4.6 percent in 2025 from 2.9 percent in 2023, supported by the resumption of activities at the Porgera gold mine and improvements in access to foreign exchange. Given the country’s high vulnerability to climate change, managing its impact is critical to the success of the authorities’ poverty reduction and sustainable growth agenda. The ECF/EFF and RSF programs will continue to support Papua New Guinea’s reform agenda, focusing on strengthening debt sustainability, alleviating foreign exchange shortages, fostering good governance and building climate resilience, while protecting the vulnerable and promoting inclusive and sustainable growth.
Keywords:
RSF reform agenda; PNG government; EFF arrangement; EFF program; RSF arrangement; government plan; PNG agriculture commercialization; Climate change; Climate finance; Global; Pacific Islands; Asia and Pacific
Cover High-Level Summary Technical Assistance Reports
India: Review and Evaluation of the Reserve Bank of India’s Stress Test Model Framework
Marco Gross
and
Wei Sun
This report provides a brief summary of the purpose and findings of a technical assistance (TA) mission that was intended to review and evaluate the Reserve Bank of India (RBI)’s stress test model suite, which took place in April 2023. The RBI’s model suite was found to be strong and well developed in numerous respects. The most noteworthy recommendations pertain to credit risk, market risk, and macro-financial scenario design. A detailed list of 28 recommendations spanning all areas was left with the RBI. A detailed TA report accompanies this brief summary report.
Keywords:
Bank solvency risk analysis; liquidity risk analysis; contagion analysis; stress test model framework; IMF team; RBI's model suite; TA mission; summary report; Stress testing; Market risk
Cover Staff Climate Notes
Unlocking Adaptation Finance in Emerging Market and Developing Economies
Deepali Gautam
,
Ekaterina Gratcheva
,
Fabio M Natalucci
, and
Ananthakrishnan Prasad
Mitigation and decarbonization efforts are falling short of the 1.5°C goal, making adaptation critical. Developing economies are affected the most, despite having contributed the least to the problem. Nearly 98 percent of adaptation finance comes from public actors, with highly fragmented flows from the private sector. As financing needs increase, bringing private sector finance becomes critical and requires reframing adaptation investments from being seen not just as a risk exposure but also as an investment opportunity. This requires addressing real and perceived investment barriers, public-private collaboration and risk sharing, as well as financial incentives and innovation to unlock scalable, inclusive solutions. Adaptation is more complex than mitigation, with challenges in defining, evaluating, pricing, and scaling investments. Progress on adaptation requires policy reforms, incentives, and partnerships between governments, businesses, and communities and public-private risk sharing.
Keywords:
climate finance; climate adaptation; climate resilience; climate finance architecture; adaptation finance; emerging markets and developing countries; private finance mobilization; sustainability; IMF Resilience and Sustainability Trust.; IMF staff climate note; IMF resilience; IMF staff climate Note 2024/007; Climate change; Financial sector; Climate policy; Global
Cover IMF Working Papers
Following the Money: Who is Keeping Coal Alive?
Gregor Schwerhoff
and
Mouhamadou Sy
The 2023 United Nations Climate Change Conference reinforced already existing pressure to transition away from fossil fuels, in particular for the most polluting source, coal. We use a comprehensive dataset on bank loans for coal projects to shed light on which type of banks continue to finance coal and how coal phase-out commitments affect coal financing. We find that coal financing is becoming increasingly concentrated, partly in banks with a very high coal exposure. We also find that many coal loans have maturities much shorter than the remaining lifetime of coal assets, thus exposing equity holders of coal assets to the risk of a more difficult loan rollover. An econometric analysis shows that countries with a strong commitment to coal phase-out, fixed in national law for example, receive less coal financing. Using an instrumental variable, we identify this effect as causal.
Keywords:
Coal; climate change; stranded assets; coal; divestment; United Nations climate change conference; Coal financing; phase-out commitment; coal financing; financing to the coal sector; Non-renewable resources; Financial sector development; Climate policy; Foreign direct investment; Asia and Pacific; Global; Europe; Middle East; Sub-Saharan Africa
Cover Staff Climate Notes
Embedded in Nature: Nature-Related Economic and Financial Risks and Policy Considerations
Charlotte Gardes-Landolfini
,
William Oman
,
Jamie Fraser
,
Mariza Montes de Oca Leon
, and
Bella Yao
The economy is embedded in, and dependent on, nature. Yet economic activity is degrading nature at an unprecedented pace. Interacting with climate change, nature loss and transformation generates significant threats to the global economy and financial system. However, work on the implications of nature-related risks for macroeconomic and financial sector policies remains at an early stage. This note seeks to contribute to this emerging policy space in three main ways: (i) it proposes a conceptual framework for understanding nature-related risks by mapping out macroeconomic transmission channels, emphasizing their impact on the economy and financial systems through “double materiality;” (ii) it conducts empirical analysis, finding that nearly 38 percent of bank loans of the 100 largest global banks are to harmful subsidies-dependent sectors and 44 percent are exposed to conservation areas under the Global Biodiversity Framework, and that industries most exposed to nature degradation are not well prepared to manage these risks; and (iii) it discusses takeaways for macroeconomic and financial sector policies and frameworks.
Keywords:
nature; environment; macroeconomics; macroeconomic policies; financial stability; banks; nature-related risks; financial regulation; financial supervision; Minsky moment; ecosystem services; planetary boundaries.; IMF staff climate note; ecosystem service; biodiversity loss; biodiversity conservation; biodiversity hotspot; Environmental policy; Climate change; Financial sector policy; Natural resources; Global
Cover IMF Working Papers
Rising Temperature, Nuanced Effects: Evidence from Seasonal and Sectoral Data
Ha Nguyen
and
Samuel Pienknagura
Using quarterly temperature and sectoral value-added data for a large sample of advanced economies (AEs) and emerging markets and developing economies (EMDEs), this paper uncovers nuanced effects of temperature on economic activity. For EMDEs, hotter spring and summer temperatures reduce growth in real value-added of manufacturing, and most significantly, of agriculture, while a warmer winter boosts it. For advanced countries (AEs), a hotter spring hurts growth in real value-added of all considered sectors: services, manufacturing and agriculture. For both country groups, the negative effect of a hotter spring is larger and more persistent than the positive effect of a warmer winter. Furthermore, the adverse impacts of hotter temperatures in advanced economies have accentuated in recent decades. This result suggests increased vulnerability to rising temperatures.
Keywords:
climate change; temperature; economic growth; agriculture; summer temperature; emerging markets and developing economies; IMF working paper 24/202; quarterly temperature; seasonal temperature; Agricultural sector; Manufacturing; Emerging and frontier financial markets; Global