(AGENPARL) – ven 02 giugno 2023 The latest IMF analysis of global economics, finance, development and policy issues shaping the world.
View as a webpage [ https://content.govdelivery.com/accounts/USIMF/bulletins/35daa2b ]
Hero weekend read
Dear Colleague,
In today's edition, we highlight:
* IMF and WTO heads on threats to world trade
* Regionalism and discrimination
* House prices
* Africa's development challenges
* Gita Gopinath on fiscal policy
INTERNATIONAL TRADE
World Trade Can Still Drive Prosperity [ https://www.imf.org/en/Publications/fandd/issues/2023/06/world-trade-can-still-drive-prosperity-georgieva-okonjo-iweala?utm_medium=email&utm_source=govdelivery ]
World trade drives prosperity [ https://www.imf.org/en/Publications/fandd/issues/2023/06/world-trade-can-still-drive-prosperity-georgieva-okonjo-iweala?utm_medium=email&utm_source=govdelivery ]
(Credit: JBQDesignStudio/Adobe Stock)
New trade restrictions, subsidies and other protectionist policies underscore the threats that geopolitical rivalries pose to economic interdependence. But, in a joint article [ https://www.imf.org/en/Publications/fandd/issues/2023/06/world-trade-can-still-drive-prosperity-georgieva-okonjo-iweala?utm_medium=email&utm_source=govdelivery ] for Finance & Development Magazine, the heads of the International Monetary Fund and World Trade Organization say that trade can drive global prosperity for decades to come.
“Our two institutions were built on the idea that thriving international trade goes hand in hand with global prosperity and stability,” *Kristalina Georgieva* and *Ngozi Okonjo-Iweala* write in the June issue of the magazine.
Today fewer than one in 10 of the world’s people are poor, a fourfold reduction since 1990, as low- and middle-income countries have doubled their share of global trade. 
“The IMF, WTO, and other leading international institutions have a critical role in charting a way forward that is in the collective interest,” they say.
“We must cooperate tirelessly to strengthen the multilateral trading system and demonstrate that our own institutions can adapt to a fast-changing world.”
*Read the article* [ https://www.imf.org/en/Publications/fandd/issues/2023/06/world-trade-can-still-drive-prosperity-georgieva-okonjo-iweala?utm_medium=email&utm_source=govdelivery ]
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Michele Ruta [ https://www.imf.org/en/News/Podcasts/All-Podcasts/2023/06/01/michele-ruta-on-discriminatory-regionalism?utm_medium=email&utm_source=govdelivery ]
As rising geopolitical tensions chip away at globalization, will a more fragmented world mean stronger regional pacts? IMF economist Michele Ruta says regionalism in a time of conflict is unlikely to triumph, but rather is likely to change. The trend toward strengthening ties with friends and loosening them with non-friends is making regional trade less about integration and more about discrimination.
FINANCE & DEVELOPMENT
New Issue of F&D: Trade, Disrupted [ https://www.imf.org/en/Publications/fandd?utm_medium=email&utm_source=govdelivery ]
FDJune [ https://www.imf.org/en/Publications/fandd?utm_medium=email&utm_source=govdelivery ]
(Credit: Nataliia Shulga/IMF)
With the liberal global trading system facing an existential moment, as many countries become increasingly concerned that closer economic integration risks clashing with national security, Finance & Development Magazine’s June edition [ https://www.imf.org/en/Publications/fandd?utm_medium=email&utm_source=govdelivery ] focuses on *Trade, Disrupted*.
In this issue, eminent voices from international organizations, governments, and academia share their views on the global trading regime’s benefits, pitfalls, and opportunities for improvement. They discuss economic security, geoeconomic fragmentation, industrial policy, export controls, regional trade agreements, tech’s effect on trade, green trade tensions, trade’s impact on women, and much more.
Authors include Benjamin Kett [ https://www.imf.org/en/Publications/fandd/issues/2023/06/the-costs-of-geoeconomic-fragmentation-bolhuis-chen-kett?utm_medium=email&utm_source=govdelivery ], Caroline Freund [ https://www.imf.org/en/Publications/fandd/issues/2023/06/intersecting-paths-caroline-freund?utm_medium=email&utm_source=govdelivery ], Chad Bown [ https://www.imf.org/en/Publications/fandd/issues/2023/06/challenge-of-export-controls-chad-bown?utm_medium=email&utm_source=govdelivery ], Christopher Bataille [ https://www.imf.org/en/Publications/fandd/issues/2023/06/green-trade-tensions-kaufman-saha-bataille?utm_medium=email&utm_source=govdelivery ], David Bloom [ https://www.imf.org/en/Publications/fandd/issues/Series/Analytical-Series/aging-is-the-real-population-bomb-bloom-zucker?utm_medium=email&utm_source=govdelivery ], Douglas Irwin [ https://www.imf.org/en/Publications/fandd/issues/2023/06/the-return-of-industrial-policy-douglas-irwin?utm_medium=email&utm_source=govdelivery ], Jiaqian Chen [ https://www.imf.org/en/Publications/fandd/issues/2023/06/the-costs-of-geoeconomic-fragmentation-bolhuis-chen-kett?utm_medium=email&utm_source=govdelivery ], Kristalina Georgieva [ https://www.imf.org/en/Publications/fandd/issues/2023/06/world-trade-can-still-drive-prosperity-georgieva-okonjo-iweala?utm_medium=email&utm_source=govdelivery ], Leo Zucker [ https://www.imf.org/en/Publications/fandd/issues/Series/Analytical-Series/aging-is-the-real-population-bomb-bloom-zucker?utm_medium=email&utm_source=govdelivery ], Luigi Zingales [ https://www.imf.org/en/Publications/fandd/issues/2023/06/POV-riskless-capitalism-rajan-zingales?utm_medium=email&utm_source=govdelivery ], Marijn Bolhuis [ https://www.imf.org/en/Publications/fandd/issues/2023/06/the-costs-of-geoeconomic-fragmentation-bolhuis-chen-kett?utm_medium=email&utm_source=govdelivery ], Michael Froman [ https://www.imf.org/en/Publications/fandd/issues/2023/06/POV-a-way-forward-for-global-trade-michael-froman?utm_medium=email&utm_source=govdelivery ], Michele Ruta [ https://www.imf.org/en/Publications/fandd/issues/2023/06/the-rise-of-discriminatory-regionalism-michele-ruta?utm_medium=email&utm_source=govdelivery ], Nadia Rocha [ https://www.imf.org/en/Publications/fandd/issues/2023/06/trade-drives-gender-equality-and-development-rocha-piermartini?utm_medium=email&utm_source=govdelivery ], Ngaire Woods [ https://www.imf.org/en/Publications/fandd/issues/2023/06/superpowers-are-forsaking-free-trade-ngaire-woods?utm_medium=email&utm_source=govdelivery ], Ngozi Okonjo-Iweala [ https://www.imf.org/en/Publications/fandd/issues/2023/06/world-trade-can-still-drive-prosperity-georgieva-okonjo-iweala?utm_medium=email&utm_source=govdelivery ], Noah Kaufman [ https://www.imf.org/en/Publications/fandd/issues/2023/06/green-trade-tensions-kaufman-saha-bataille?utm_medium=email&utm_source=govdelivery ], Pinelopi Goldberg [ https://www.imf.org/en/Publications/fandd/issues/2023/06/growing-threats-to-global-trade-goldberg-reed?utm_medium=email&utm_source=govdelivery ], Raghuram Rajan [ https://www.imf.org/en/Publications/fandd/issues/2023/06/POV-riskless-capitalism-rajan-zingales?utm_medium=email&utm_source=govdelivery ], Ralph Ossa [ https://www.imf.org/en/Publications/fandd/issues/2023/06/pillar-of-economic-security-ralph-ossa?utm_medium=email&utm_source=govdelivery ], Roberta Piermartini [ https://www.imf.org/en/Publications/fandd/issues/2023/06/trade-drives-gender-equality-and-development-rocha-piermartini?utm_medium=email&utm_source=govdelivery ], Sagatom Saha [ https://www.imf.org/en/Publications/fandd/issues/2023/06/green-trade-tensions-kaufman-saha-bataille?utm_medium=email&utm_source=govdelivery ], Tristan Reed [ https://www.imf.org/en/Publications/fandd/issues/2023/06/growing-threats-to-global-trade-goldberg-reed?utm_medium=email&utm_source=govdelivery ], and many others.
*Read the issue online* [ https://www.imf.org/en/Publications/fandd?utm_medium=email&utm_source=govdelivery ]
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AFRICA PERSPECTIVES
Nobel Laureate Michael Kremer
Michael Kremer, Professor of Economics at the University of Chicago, speaks to the IMF’s African Department Director?Abebe Aemro Selassie about the key measures policymakers can take to address global and regional challenges in this episode of Africa Perspectives.
RESILIENCE AND SUSTAINABILTY FACILITY
Seychelles Seals $46-Million Agreement [ https://www.imf.org/en/News/Articles/2023/05/31/pr23189-seychelles-imf-executive-board-approves-extended-fund-facility-arrangement-for-seychelles?utm_medium=email&utm_source=govdelivery ]
Seychelles
The IMF’s Executive Board has approved a $46-million three-year program for Seychelles under the Resilience and Sustainability Facility [ https://www.imf.org/en/About/Factsheets/Sheets/2023/Resilience-Sustainability-Facility-RSF?utm_medium=email&utm_source=govdelivery ], the Fund’s new instrument to support countries facing long-term challenges such as climate change.
“The RSF will focus on mainstreaming climate change in the government budget, strengthening climate-related risk management for financial institutions, and undertaking climate adaptation and mitigation reforms, including through measures to facilitate energy transition,” *Gita Gopinath*, the IMF’s First Deputy Managing Director, said in a statement [ https://www.imf.org/en/News/Articles/2023/05/31/pr23189-seychelles-imf-executive-board-approves-extended-fund-facility-arrangement-for-seychelles?utm_medium=email&utm_source=govdelivery ].
The Seychelles, which also sealed a separate $56-million Extended Fund Facility arrangement, is the second country in Africa to agree an RSF program.
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cotw [ https://www.imf.org/en/Blogs/chart-of-the-week?utm_medium=email&utm_source=govdelivery ]
Housing risks [ https://www.imf.org/en/Blogs/Articles/2023/05/31/how-falling-home-prices-could-strain-financial-markets-as-interest-rates-rise?utm_medium=email&utm_source=govdelivery ]
The pandemic propelled housing prices to record levels in many countries, especially advanced economies, amid low interest rates and tight property supplies. Then prices started falling late last year in many countries, while others saw the pace of gains slow. As the Chart of the Week shows, countries with high levels of household debt and a large share of borrowing issued at floating rates are more exposed to higher mortgage payments resulting in a higher risk of defaults. Canada, Australia, Norway, and Sweden are at greatest risk, according to data from the Organisation for Economic Co-operation and Development, a group of 38 mostly advanced economies.
*Read the blog* [ https://www.imf.org/en/Blogs/Articles/2023/05/31/how-falling-home-prices-could-strain-financial-markets-as-interest-rates-rise?utm_medium=email&utm_source=govdelivery ]
Weekly Roundup
*FISCAL POLICY*
Recent Crises Force Rethink [ https://www.imf.org/en/live?_slide=PIIE-GG&utm_medium=email&utm_source=govdelivery ]
Gita Gopinath, the IMF’s First Deputy Managing Director, discussed how our understanding of the best use of fiscal policy in a crisis has changed in the past few years in a keynote conference speech [ https://www.imf.org/en/live?_slide=PIIE-GG&utm_medium=email&utm_source=govdelivery ]. Vitor Gaspar, director of the IMF’s Fiscal Affairs Department, participated in the closing session [ https://www.imf.org/en/live?_slide=PIIE-Lessons&utm_medium=email&utm_source=govdelivery ] of the Peterson Institute for International Economics conference on “Rethinking fiscal policy,” alongside Jason Furman of the PIIE, Christina Romer of the University of California, Berkeley, and Masaaki Shirakawa, former governor of the Bank of Japan.
*JAPAN*
Ultra-Low Interest Rates [ https://www.reuters.com/markets/rates-bonds/imf-urges-boj-keep-ultra-low-rates-be-ready-shift-course-2023-06-01/?utm_medium=email&utm_source=govdelivery ]
The Bank of Japan must keep monetary policy ultra-loose as it will take time to re-anchor inflation expectations to its 2 percent target, the IMF's chief economist told Reuters in an interview [ https://www.reuters.com/markets/rates-bonds/imf-urges-boj-keep-ultra-low-rates-be-ready-shift-course-2023-06-01/?utm_medium=email&utm_source=govdelivery ]. But Pierre-Olivier Gourinchas said the central bank must be vigilant to the risk of price growth overshooting expectations, and be ready to tighten policy if inflation stays above its target for too long. Read a Country Focus article [ https://www.imf.org/en/News/Articles/2023/05/24/cf-uncertainty-around-japan-inflation-underscores-need-for-nimble-monetary-policy?utm_medium=email&utm_source=govdelivery ] on why Japan may finally be able to sustain inflation around its target and an F&D article [ https://www.imf.org/en/Publications/fandd/issues/2023/03/POV-time-for-change-masaaki-shirakawa?utm_medium=email&utm_source=govdelivery ] by former Bank of Japan governor Masaaki Shirakawa on why it’s time to rethink monetary policy.
*SRI LANKA*
Recovery Remains Challenging [ https://www.imf.org/en/News/Articles/2023/06/01/pr23193-sri-lanka-statement-imf-dmd-okamura-conclusion-his-visit?utm_medium=email&utm_source=govdelivery ]
Sri Lanka’s economy is showing signs of improvement but recovery remains challenging, Kenji Okamura, Deputy Managing Director of the IMF, said at the end of a visit [ https://www.imf.org/en/News/Articles/2023/06/01/pr23193-sri-lanka-statement-imf-dmd-okamura-conclusion-his-visit?utm_medium=email&utm_source=govdelivery ] to the country. “Now, more than ever, it is essential to continue the reform momentum under strong ownership by both the authorities and the Sri Lankan people.” In March the IMF’s Executive Board approved a $3-billion program [ https://www.imf.org/en/News/Articles/2023/03/20/pr2379-imf-executive-board-approves-under-the-new-eff-arrangement-for-sri-lanka?utm_medium=email&utm_source=govdelivery ] for Sri Lanka to restore macroeconomic stability and debt sustainability.
*SUBSIDIES*
One Stop Shop [ https://www.subsidydata.org/en/subsidydata/home?utm_medium=email&utm_source=govdelivery ]
A new Subsidy Platform [ https://www.subsidydata.org/en/subsidydata/home?utm_medium=email&utm_source=govdelivery ] provides a “one-stop shop” for information and analysis on subsidies using data from the IMF, OECD, World Bank Group, and WTO. The platform is a first step to enhance transparency on the use of subsidies by bringing together in a common space information on subsidies from these four international organizations. The user-friendly interface also allows users to study subsidy trends related to various sectors such as agriculture, fossil fuels, fisheries, and industry.
STAFF PAPER
The Dollar and Emerging Markets [ https://www.imf.org/en/Publications/WP/Issues/2023/05/26/Dollar-Exchange-Rate-volatility-and-Productivity-Growth-in-Emerging-Markets-Evidence-from-533847?utm_medium=email&utm_source=govdelivery ]
An IMF staff paper [ https://www.imf.org/en/Publications/WP/Issues/2023/05/26/Dollar-Exchange-Rate-volatility-and-Productivity-Growth-in-Emerging-Markets-Evidence-from-533847?utm_medium=email&utm_source=govdelivery ] finds that dollar exchange rate volatility reduces firm productivity growth in emerging markets. The results are driven by countries with low levels of financial development, high dollar invoicing, high bilateral trade with the US, widespread collective bargaining, and open capital accounts. Foreign exchange interventions dampen this impact on firm productivity. Younger firms, more likely to face financial constraints, are also found to be more vulnerable to dollar exchange rate volatility, as are firms with highly irreversible investment.
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