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Asia and Pacific > India

You are looking at 1 - 10 of 91 items for :

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Cover IMF Staff Country Reports
Australia: Selected Issues
International Monetary Fund. Asia and Pacific Dept
This Selected Issues paper examines monetary policy transmission via three lenses in Australia. The paper finds that while macroeconomic dynamics in Australia in the current tightening cycle have not differed significantly from historical experience and from experiences in other major AEs, the resilience of Australia’s economy in recent years is remarkable, as evidenced by persistently tight labor markets. Second, several features of the Australian housing market, most notably the high prevalence of variable rate mortgages, may strengthen monetary policy transmission to households relative to other AEs. Lastly, we find that firm investment in Australia’s nonextractive sector is strongly sensitive to monetary policy changes; the sensitivity is more pronounced for firms with less liquidity, higher leverage, and higher reliance on bank and short-term financing. We highlight how resilience in Australian corporate balance sheets in recent years may have helped soften monetary policy transmission to investment in the current cycle.
Keywords:
monetary policy shock; heterogeneity in monetary policy TRANSMISSION; industries in Australia; domestic energy transition; fossil fuel demand; Non-renewable resources; Monetary tightening; Renewable energy; Global; Europe
Cover Selected Issues Papers
Securing Fiscal Discipline and Credibility in WAEMU: WAEMU
Ljubica Dordevic
and
Olivia Y Ibrahim
Fiscal consolidation and the reintroduction of the WAEMU fiscal framework is crucial for maintaining debt sustainability, external viability, and financial stability. The 3 and 70 percent of GDP deficit and debt ceilings envisaged by the expired rule remain appropriate, while addressing the stock-flow adjustments will help rebuild fiscal buffers. Convergence to a fiscal deficit of 3 percent of GDP should be ensured by 2025— barring exceptional circumstances—with focus on domestic revenue mobilization, while controlling expenditure. To secure fiscal discipline and credibility, it is essential to revamp the fiscal rule with a credible debt correction mechanism and exogenous escape clauses.
Keywords:
monetary union; fiscal policy; fiscal consolidation; fiscal rules; debt; stock flow adjustment; stock-flow adjustment; credibility in WAEMU; deficit ceiling; deficit target; deficit rule; Debt sustainability; Fiscal space; Global
Cover Policy Papers
IMF and World Bank Approach to Cross-Border Payments Technical Assistance
International Monetary Fund. Monetary and Capital Markets Department
and
World Bank
The G20 had made enhancing cross-border payments a priority. Faster, cheaper, more transparent and more inclusive cross-border payment services have the potential to be transformative for citizens and economies across the world. The Roadmap for Enhancing Cross-Border Payments, launched in 2020, is the first attempt by the international community to address the challenges faced by cross-border payments in a holistic way. A key foundational element in the Roadmap was the publication by the FSB of 11 quantitative targets to define the Roadmap’s aims and create accountability. Technical Assistance (TA) plays a critical role in helping achieve the Roadmap targets. TA relates closely to, and builds on, the IMF’s and World Bank’s respective missions. This paper outlines a multi-year strategy to provide TA in order to meet the cross-border payments targets. The paper (1) details the important role TA plays in achieving the Roadmap targets; (2) summarizes stocktakes conducted by the IMF and World Bank of recent and ongoing TA supporting cross-border payments; and (3) explains the IMF’s and World Bank’s approaches to cross-border payments TA. The IMF and World Bank commit to collaborating, coordinating, and complementing each other on cross-border payments TA wherever possible and appropriate at country/project level.
Keywords:
Cross-border payments; stocktake; technical assistance; payment systems; IMF TA approach; strengthening World Bank TA; IMF TA mission; TA program; IMF-World Bank; TA mission; cross-border payments TA; Anti-money laundering and combating the financing of terrorism (AML/CFT); Remittances; Central Bank digital currencies; Global
Cover IMF Staff Country Reports
India: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for India
International Monetary Fund. Asia and Pacific Dept
The 2023 Article IV Consultation highlights that India is on track to be one of the fastest growing major economies in the world this year, underpinned by prudent macroeconomic policies. Nonetheless, the economy is facing global headwinds, including a global growth slowdown in an increasingly fragmented world. Policy priorities should focus on replenishing fiscal buffers, securing price stability, maintaining financial stability, and accelerating inclusive growth through comprehensive structural reforms while preserving debt sustainability. Elevated public debt calls for ambitious medium-term consolidation, while continuing to prioritize capital spending. This should be complemented with a sound medium-term fiscal framework to promote transparency and accountability and align policies with India’s development goals. In order to reap the benefits of demographic tailwinds, structural policy should focus on promoting high quality job-rich growth, underpinned by comprehensive reform in areas of education, health, land, agriculture, and labor markets, including measures to boost female labor force participation. Continuing investment in infrastructure, strengthening governance, and enhancing a sound business environment are critical.
Keywords:
policy priority; WPI base year; infrastructure program; CPI series; household inflation expectation; gross investment; policy recommendation; financial asset; FDI regime; fund approval; CPI weight; Inflation; Government debt management; Global
Cover IMF Staff Country Reports
Maldives: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Maldives
International Monetary Fund. Asia and Pacific Dept
The 2021 Article IV Consultation highlights that the Maldives is recovering after the historical 2020 fall in tourism, aided by a rapid coronavirus disease 2019-vaccination program rollout. While the prompt and comprehensive policy approach in early 2020 was effective, a more prolonged pandemic and ambitious infrastructure projects are further weakening large pre-pandemic fiscal and external vulnerabilities. The strong (but still partial) recovery in tourism since 2020Q4 has improved the outlook, but fiscal and external positions are projected to remain weak over the medium term, underpinned by current capital expenditure plans. The Maldives has both a high risk of external debt distress and high overall risk of debt distress. The team agreed that a tighter monetary policy stance might be needed to ensure compatibility with the exchange rate peg, lower external imbalances and build-up reserves. They supported the Maldives Monetary Authority’s ongoing efforts to modernize monetary policy and the foreign exchange operations framework, including those aimed at eliminating exchange rate restrictions and multiple currency practices.
Keywords:
positivity rate; program rollout; MMA authorities; staff projection; staff supplement; Maldivian authorities; MMA advance; COVID-19; Capital spending; South Asia; Global; Asia and Pacific
Cover IMF Staff Country Reports
Suriname: Third Review Under the Extended Arrangement Under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for Suriname
International Monetary Fund. Western Hemisphere Dept.
This paper presents Suriname’s Third Review Under the Extended Arrangement Under the Extended Fund Facility. The authorities’ commitment to macroeconomic stability and fiscal discipline under the program is starting to bear fruit. The economy is stabilizing as exchange rate pressures have eased and inflation, while still high, is on a downward trend. The authorities’ main near-term policy priority is to maintain fiscal prudence while protecting the most vulnerable and supporting growth-enhancing investment. Decisive fiscal adjustment is putting debt on a firm downward trajectory even as expenditures to protect the vulnerable are being prioritized. Monetary and fiscal restraints are easing pressures on the exchange rate, but inflation has yet to move decisively lower. Efforts are underway to broaden the tax base, increase spending efficiency, improve governance, and address longstanding vulnerabilities in the financial system. The authorities have enacted an amendment to increase value added tax revenues and have finalized a framework to assess banks’ recapitalization and restructuring plans.
Keywords:
end-December QPC; staff appraisal; near-term policy priority; governance reform; Surinamese authorities; Arrears; Inflation; Debt restructuring; Caribbean; Global
Cover FinTech Notes
Central Bank Digital Currency's Role in Promoting Financial Inclusion
Ashley Lannquist
and
Brandon Tan
Financial inclusion is a key policy objective that central banks, especially those in emerging and low-income countries, are considering for retail central bank digital currency (CBDC). If properly designed to address the barriers to financial inclusion, CBDCs have the opportunity to gain acceptance by the financially excluded for digital payments. CBDC can then serve as an entry point to the broader formal financial system. CBDC has special aspects that may benefit financial inclusion, such as being a risk-free and widely acceptable form of digital money, availability for offline payments, and potentially lower costs and greater accessibility. However, CBDC is not a panacea to financial inclusion, and additional experience is needed to fully understand its potential impact.
Keywords:
Central bank digital currency; financial inclusion; digital inclusion; digital payments; central bank digital currency's role; IMF Fintech Note 2023/011; IMF Library; publication order; publications service; Central Bank digital currencies; Digital financial services; Payment systems; Global; Sub-Saharan Africa
Cover IMF Staff Country Reports
Brazil: Selected Issues
International Monetary Fund. Western Hemisphere Dept.
This Selected Issues paper focuses on challenges and options for reform in Brazil. This paper discusses options to build on the new fiscal rule and enhance the fiscal framework. The new rule’s focus on revenues carries important implementation risks, and consolidation that is more ambitious is needed to achieve a downward debt path. Building on Brazil’s and cross-country experience with fiscal frameworks, this paper proposes options to build on the new fiscal rule and enhance the fiscal framework. The new proposed fiscal rule addresses important priorities of the new government and offers opportunities for gradual fiscal consolidation over an extended horizon, but important challenges remain. There is scope to shape a more comprehensive and integrated fiscal framework, leveraging specific advantages of rules. Further considerations to refine the proposed new fiscal rule include ensuring consistency of the spending rule and the primary balance targets, while making the latter more binding. The existing fiscal framework would also benefit from a strong fiscal anchor that puts debt on a firmly declining path, rebuilds buffers, and embeds a medium-term perspective. Further options to strengthen the framework include addressing the procyclical bias, coupled with institutionalizing the escape clause and considering a mechanism to smooth commodity revenues, and hardening budget constraints for subnational governments.
Keywords:
policy option; spending measure; implementation challenge; alternative investment scenario; climate strategy; Fiscal rules; Fiscal governance; Fiscal stance; Global; Caribbean; Europe
Cover IMF Staff Country Reports
Suriname: Second Review Under the Extended Arrangement Under the Extended Fund Facility, Requests for Rephasing and Reduction of Access, Waivers of nonobservance of Performance Criteria and Financing Assurances Review-Press Release; Staff Report; Staff Supplement; Staff Statement; and Statement by the Executive Director for Suriname
International Monetary Fund. Western Hemisphere Dept.
This paper presents Suriname’s Review under the Extended Arrangement under the Extended Fund Facility, Requests for Rephasing and Reduction of Access, Waivers of Nonobservance of Performance Criteria (PC), and Financing Assurances Review. The authorities have made concerted efforts to bring their economic recovery program back on track and stabilize the economy, foremost by restoring fiscal discipline, while expanding social assistance programs to protect the poor. They have also reached important milestones in debt restructuring negotiations, which, alongside fiscal consolidation, will support Suriname’s efforts to restore debt sustainability. The end-December 2022 quantitative performance criteria on the cumulative central government primary balance and net domestic assets were missed. Two continuous PCs and one standard continuous PC were also breached. Progress on implementing the structural agenda has moved ahead but with delays. The authorities are continuing to make progress with their structural reform agenda. Structural reforms to strengthen institutions, governance, and data quality remain key priorities with continued capacity building support by IMF and Suriname’s other development partners.
Keywords:
roadmap triage; staff appraisal; governance reform of bank; government FX sale; sales transaction; Exchange rates; Multiple currency practices; Arrears; Caribbean; Global
Cover IMF Staff Country Reports
United Arab Emirates: Selected Issues
International Monetary Fund. Middle East and Central Asia Dept.
The Selected Issues paper discusses United Arab Emirates’ (UAE) focus on reforms for productive and greener growth. This paper aims to quantify the potential long-term growth and productivity gains from ongoing structural reform efforts. Facilitating green and sustainable private finance would reduce the direct fiscal burdens of investment needs and help promote a smooth transition to a lower carbon future. The UAE has recently signed or started negotiations for Comprehensive Economic Partnership Agreements with eleven countries. Depending on the UAE’s ability to further attract foreign direct investment, the reduction of tariffs, especially on intermediate inputs, can significantly lift long-term growth through stronger competition, access to a higher number of varieties and quality of inputs, and transfer of technology. Developing and scaling up private green and sustainable finance, as well as creating an enabling environment for smooth energy transition, would reduce direct fiscal costs, increase efficiency of green investments, and preserve public financial wealth while delivering on growth and Net Zero ambitions.
Keywords:
UAE government; ICT investment outcome; FDI restrictiveness index; quantifying gains from trade liberalization; productivity gain; Climate finance; Digital economy; Foreign direct investment; Sustainable growth; Global