(AGENPARL) – ven 20 gennaio 2023 The latest IMF analysis of global economics, finance, development and policy issues shaping the world. []
[newsletter hero]
Dear Colleague,
In today’s edition, we highlight:
– Fragmentation and multilateralism
– Crypto contagion
– Sovereign debt
– Trade tariffs
– Tax amnesties
FRAGMENTATION
(Credit: World Economic Forum/Boris Baldinger)
Even as we need more international cooperation on multiple fronts, we are facing the specter of a new Cold War that could see the world fragment into rival economic blocs, Kristalina Georgieva said.
“This would be a collective policy mistake that would leave everyone poorer and less secure.”
The managing director called for a pragmatic approach to fighting fragmentation by focusing on areas where cooperation is essential and delay is not an option, namely: trade, debt, and climate action.
Not everyone has benefited from globalization, but the risk is that policy interventions adopted in the name of economic or national security could have unintended consequences, or they could be used deliberately for economic gains at the expense of others, Georgieva said.
“That would be a dangerous slippery slope towards runaway geoeconomic fragmentation.”
A discussion note by IMF staff explores the consequences of fragmentation for the international monetary system and suggests a pragmatic path for preserving the benefits of global integration.
—————————————————————
GLOBAL OUTLOOK
Signs of resilience
The global economy faces a tough year and central banks should stay the course to tame inflation, but there are signs of resilience, including strong labor markets in the United States and Europe, the IMF’s Gita Gopinath says in a video message from Davos.
[Spacer]
CRYPTO CONTAGION
(Credit: Adobe Stock/Musashi_Collection)
The already volatile world of crypto has been upended anew by the collapse of one its largest platforms, which highlighted risks from crypto assets that lack basic protections.
The losses punctuated an already perilous period for crypto, which has lost trillions of dollars in market value. Bitcoin, the largest, is down by almost two-thirds from its peak in late 2021, and about three-quarters of investors have lost money on it, according to the Bank for International Settlements.
“The IMF will continue to work with global bodies and member nations to help leading policymakers working on this topic to best serve individual users as well as the global financial system,” Bo said.
“Preparedness is key across the different types of cyber-attacks…that could unfold because of geopolitical conflicts.”
The IMF fintech page showcases all our latest thinking on crypto assets, cyber security, and much more.
The director of the IMF’s Monetary and Capital Markets Department says the crypto universe has fundamental problems, but the technologies could be used in a way that provides a public good.
[Spacer]
FINANCE & DEVELOPMENT
(Credit: iStock/Rastudio)
When Edward III of England ran out of money to finance the Hundred Years’ War with France, he turned to the banking families of Florence. But when Edward failed to become king of France, he was unable to repay the debt. Over the centuries, the sovereign’s debt became sovereign debt: the multitrillion, multinational, multicurrency network of debt obligations that we know today.
Over the centuries, sovereign borrowing has come to play a pivotal role in the world economy by allowing governments to keep economies afloat during recessions and to finance investments that lift productivity and growth. But, as the authors say, the risk of potential default remains with us to this day.
—————————————————————
Weekly Roundup
STAFF PAPER
STAFF PAPER
Thank you again very much for your interest in the Weekend Read! Be sure to let us know what issues and trends we should have on our radar.
[nick]
Nick Owen
Editor
IMF Weekend Read