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Europe > Ukraine

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

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Cover IMF Staff Country Reports
Georgia: Selected Issues
International Monetary Fund. Middle East and Central Asia Dept.
This Selected Issues paper explores drivers of inflation and monetary policy in Georgia. Inflation spiked in Georgia following the pandemic and Russia’s war in Ukraine. A positive output gap indicates that high demand is generating inflationary pressure in the economy. Estimates suggest tighter monetary policy in 2021 helped significantly lower peak inflation in 2022. One response to uncertainty is for monetary policy makers to act more cautiously – responding less vigorously with monetary policy to shocks. Given the challenges in managing inflation in a highly dollarized, small open-economy prone to large external shocks, it is important to look at the drivers of inflation in Georgia, the monetary policy stance including the natural rate, the transmission mechanism including the impact of dollarization, and the appropriate monetary policy path going forward. Using a range of approaches, IMF establish that monetary policy in Georgia is effective, that it is close to neutral, and that heightened uncertainty supports a gradual policy normalization.
Keywords:
commodity import price index; Georgia population projection; trend inflation; IMF staff calculation; inflation projection; Inflation; Labor markets; Unemployment; Employment; Central Asia; Middle East
Cover IMF Staff Country Reports
Finland: 2024 Article IV Consultation-Press Release; and Staff Report
International Monetary Fund. European Dept.
The 2024 Article IV Consultation highlights that Finland’s economy recovered swiftly from the pandemic, but growth slowed after Russia’s war in Ukraine. Weak household income growth, falling house prices, higher interest rates, and low growth in Europe has caused activity to stall in Finland, with a contraction of 0.5 percent estimated in 2023. However, inflation has fallen to levels that are more normal and financial conditions appear to be easing. Structurally, adverse demographics and weak productivity have resulted in low trend growth, weighing on public finances. Enhancing employment and productivity are essential for economic growth. The mission supports the government's efforts to boost employment through social benefit reforms, greater flexibility in the labor market, and lowering the labor tax wedge. The financial system remains resilient, but rising systemic risks warrant vigilant monitoring. Banks have sufficient capital to withstand adverse macroeconomic shocks, including geo-economics fragmentation and weakening of profits and capital ratios. Additionally, debt-to-income and debt-service-to-income limits should be added to the macroprudential policy toolkit in order to prevent excessive household indebtedness and improve borrower’s repayment capacity. These measures could be activated when concerns regarding adverse effects on demand and house prices subside.
Keywords:
liability positions vis-à-vis nonresident; money market rate; inflation pressure; potential GDP; exchange arrangement; Labor markets; Inflation; Employment; Global; Europe
Cover IMF Working Papers
Revisiting Covid Scarring in Emerging Markets
Chris Jackson
and
Jason Lu
The Covid-19 pandemic is expected to result in large and persistent losses in economic output, known as scarring. These losses were expected to be more severe in Emerging Markets than in Advanced Economies. This paper examines the impact of Covid on output in Emerging Markets so far and its implications for projections of economic scarring. While Covid has had a material impact on activity, the recovery has been stronger than initially expected. We find that these positive data surprises have over time been treated increasingly as transitory rather than a signal for the state of scarring. Second, we show that the composition of output losses has been qualitatively different from past last shocks. History suggests that the main driver of scarring is weak productivity. Covid losses, however, have so far been more skewed to employment with a smaller than usual impact on productivity. We argue that these findings suggest that scarring, while substantial, may be ultimately less severe than initially feared, at least over the medium term. We provide alternative sets of medium-term projections to indicate potential magnitudes.
Keywords:
COVID-19; scarring; medium-term output; Emerging Markets; output loss; GDP growth data; revisiting Covid; POST-Covid GDP loss; scarring estimate; Total factor productivity; Employment; Emerging and frontier financial markets; Wages; Global
Cover IMF Staff Country Reports
Finland: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Finland
International Monetary Fund. European Dept.
This 2022 Article IV Consultation with Finland highlights that the economy recovered swiftly from the pandemic, but Russia’s war in Ukraine has worsened the outlook given Finland’s exposures to the fallout through trade and increase in energy prices, while high inflation and rising interest rates are weighing on household purchasing power. Long-standing structural challenges—from adverse demographics and low productivity growth—remain. Tighter financial conditions will test the resilience of Finland’s large financial system: banks are well capitalized, but vulnerable to liquidity shocks and exposed to credit risks from other Nordics and high household debt. Further measures to boost employment and productivity remain key to growth and sustainability. Advancing labor market reforms and making the collective wage bargaining more flexible while strengthening the coordination mechanism should play a supportive role and facilitate adjustment to shocks. Liquidity buffers should be strengthened and, when circumstances allow, systemic buffers re-instated and cyclical tools enhanced by introducing a positive neutral rate for the countercyclical capital buffer. A debt-to-income cap should be legislated to address vulnerabilities in household finances.
Keywords:
liability positions vis-à-vis nonresident; money market rate; employment growth; headline inflation; housing company loan; Inflation; Energy prices; Employment; Fiscal stance; Global; Baltics
Cover IMF Working Papers
Economic Scarring: Channels and Policy Implications
Mrs. Nujin Suphaphiphat
and
Ms. Yu Shi
This paper documents the existence of medium-to-long term output losses following large crises using panel data that cover 192 countries from 1970 to 2015 and shows that the magnitudes of economic scarring depend on the nature of the shock, economic activity, and pre-crisis conditions. It also provides a thorough review of potential channels that can lead to scarring and presents novel empirical evidence on the significance of supply-side channels using cross-country sectoral-level data. Finally, the paper discusses policy implications based on the empirical findings.
Keywords:
Economic scarring; covid; pandemic; health crisis; systemic banking crisis; economic shock; hysteresis; growth; crises; scarring channels; employment; sectoral output loss; macroeconomic policy; Policy implication; panel data; impulse Response; scarring channel; Systemic crises; Human capital; Global
Cover Departmental Papers
Reassessing the Role of State-Owned Enterprises in Central, Eastern and Southeastern Europe
Christine J. Richmond
,
Ms. Dora Benedek
,
Ezequiel Cabezon
,
Bobana Cegar
,
Mr. Peter Dohlman
,
Michelle Hassine
,
Beata Jajko
,
Piotr Kopyrski
,
Maksym Markevych
,
Mr. Jacques A Miniane
,
Mr. Francisco J Parodi
,
Gabor Pula
,
Mr. James Roaf
,
Min Kyu Song
,
Mariya Sviderskaya
,
Ms. Rima A Turk
, and
Mr. Sebastian Weber
The Central, Eastern, and South Eastern European (CESEE) region is ripe for a reassessment of the role of the state in economic activity. The rapid income convergence with Western Europe of the early 2000s was not always equally shared across society, and it has now slowed dramatically in many countries of the region.
Keywords:
DPPP; DP; private sector; CESEE country; country authorities; economic activity; return on assets; ownership policy; IMF staff calculation; return on equity; holding company; support SOEs; country authority datum; composite index; aluminum company Hydro Aluminum A.S.; company Hydro Aluminum A.S.; SOE performance; government interference; Public enterprises; Privatization; Corporate governance; Employment; Global; Eastern Europe; SOE governance; CESEE region SOB; SOE presence; governance index; Total factor productivity; Europe
Cover IMF Staff Country Reports
Republic of Poland: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues papers review factors that drive wage growth in Poland and studies structural characteristics and firm-level total factor productivity (TFP) in Poland and Emerging Europe. The increase in real unit labor costs (RULC) occurred alongside an unprecedently tight labor market. The study highlights that the more subdued RULC dynamics compared with the pre-crisis period, despite the now-lower unemployment rate, may reflect the recent influx of foreign workers. In order to more systematically identify the long- and short-term drivers of Polish wages, an Error-correction model has been used. Analyses presented in the paper using both Statistics Poland and Orbis data show that foreign-owned firms are associated with strong TFP performance through above-average TFP levels and growth rates. The findings suggest the need to create an environment conducive to entrepreneurship by reducing barriers to entry and ensuring a level playing field between state owned and private firms, while also avoiding barriers to scaling up businesses while encouraging investments in innovation and research and development.
Keywords:
ISCR; CR; firm; wage; share; nominal wage; wage growth; dampening effect; TFP dynamics; ownership structure; laggard firm; support wage; Total factor productivity; Wages; Real wages; Employment; Labor productivity; Global; Eastern Europe
Cover The IMF at 70:
The IMF at 70:
Making the Right Choices—Yesterday, Today, and Tomorrow
International Monetary Fund

Abstract

International Monetary Fund Managing Director Christine Lagarde delivered this speech at the World Bank/IMF Annual Meetings in Washington, D.C., on October 10, 2014.

Keywords:
SPE; international community; jobs crisis; financial risk; world GDP; job; labor market policy; job market; job creation; members of the IMF; Employment; Current account deficits; Financial sector stability; Emerging and frontier financial markets; Job creation; Global
Cover IMF Working Papers
The Fall and Recovery of the Cuban Economy in the 1990's: Mirage or Reality?
Mr. Ernesto Hernández-Catá
The collapse of the Cuban economy following the cessation of Soviet assistance gave way to a strong recovery in 1994-96. There are three possible explanations for this recovery: (i) that it never took place; (ii) that it reflected a surge in productivity resulting from stabilization and liberalization in 1993-94; or (iii) that it resulted from a favorable aggregate demand shock. The second explanation-the most persuasive-suggests that a strong and durable expansion will probably not be achieved on the basis of present policies, but that the benefits of a full liberalization of the economy are likely to be considerable.
Keywords:
WP; fixed capital; GDP deflator; balance of payments; liberalization measure; output index; Cuba; growth; productivity; liberalization; transition; growth performance; price liberalization; demand shock; Total factor productivity; Employment; Labor force; Price controls; Baltics; Eastern Europe; Central and Eastern Europe
Cover IMF Working Papers
Transition Economies: How Appropriate is the Size and Scope of Government?
International Monetary Fund
This paper assesses changes in the size and scope of government in 24 transition economies. Whereas these governments have retrenched in terms of public expenditures in relation to GDP, as well as public employment as a share of population, some indicators suggest that size remains high (e.g., rising indebtedness, a heavy regulatory burden, and prevalence of noncash transactions). At the same time, the scope of government activities-although evolving-has not necessarily become appropriate. This paper provides some recommendations for aligning the scope of government with the increasing market orientation of these economies.
Keywords:
WP; government; country; government employment; EU border state; government spending; transition economies; reform; size of government; transition economy; tax authorities; wage bill; government effectiveness; scope of government; Public employment; Health care; Total expenditures; Central Asia; Baltics; Central and Eastern Europe; Central Asia and the Caucasus