These countries will suffer the most devastating impacts of climate change even though they’re not responsible for causing it.
IMF
Consensus on the need to build a greener economy often founders on concern over potential job losses. The change can be difficult. The IMF proposes a mix of policies to ease the pain of workers.
When was the last time you used cash? In his latest book, Eswar Prasad looks at a world, not that far off, where using cash will no longer be an option. Prasad is a professor of economics at Cornell University, and his book, The Future of Money, describes how digital currencies and other financial technologies are reshaping everything from consumer banking to monetary policy and international payments.
In this IMF podcast, he discusses the book with Finance and Development Magazine editor Chris Wellisz.
Growth slows as economies grapple with supply disruptions, higher inflation, record debt and persistent uncertainty, according to the IMF’s latest World Economic Outlook.
E-money is already a vital part of daily life for billions of people, especially in many developing countries, where many lack access to the banking system.
While the world has been focused on the pandemic for the past two years, the rapid rise of Alzheimer’s disease and related dementias pose another threat to global public health.
Nathaniel Counts is Senior VP for Behavioral Health Innovation at Mental Health America and Assistant Professor at Albert Einstein's School of Medicine. In this IMF podcast, Counts says dementia will vastly increase across the globe as the population age rises with increasing life expectancy and have profound impacts on welfare and economic growth, especially in low- and middle-income countries.
Photo: An old lady at her window in a Nepalese village. ©UN Photo/John Isaac
With inflationary pressures intensifying and Omicron generating new uncertainties, monetary policymakers face new and challenging tradeoffs. As the IMF warned a more frontloaded Fed response to dampen inflation risks could result in market volatility and create difficulties elsewhere—especially in emerging and developing economies. To avoid that, policy shifts need to be telegraphed well, as has so far been the case. Emerging market and developing economies should also prepare for increases in advanced economy interest rates through debt maturity extensions where feasible.
The IMF brings us the daunting picture, which emerges from International Energy Agency “Net Zero by 2050” report: the energy sector needs a complete overhaul. To succeed, governments must act immediately and decisively to end fossil fuel consumption and craft a resilient energy economy dominated by renewables such as solar and wind power. The pathway to success is narrow, but the IEA report makes it clear that it is achievable. Decisive climate action now will put the global economy on a stronger and more sustainable footing over the long run.
Without resolute measures to address this growing divide, COVID‑19 will continue to claim lives and destroy jobs, inflicting lasting damage to investment, productivity, and growth in the most vulnerable countries. The pandemic will further disrupt the lives of the most vulnerable with rising extreme poverty and malnutrition, shattering all hope of attaining the SDGs. The IMF suggests narrowing the pandemic divide through collective action to boost access to vaccines, secure critical financing, and accelerate the transition to a greener, digital, and more inclusive world.
The global economic recovery continues, but with a widening gap between advanced economies and many emerging market and developing economies, IMF reports. Growth prospects for advanced economies this year have improved by 0.5 percentage point, but this is offset exactly by a downward revision for emerging market and developing economies driven by a significant downgrade for emerging Asia. Faster-than-expected vaccination rates and return to normalcy lead to upgrades, while lack of access to vaccines and renewed waves of COVID-19 cases in some countries, notably India, lead to downgrades.
Since March 2020, governments have spent $16 trillion providing fiscal support amid the pandemic. Deficits are the highest they have been since World War II. This was absolutely necessary — IMF research indicates that if policymakers had not acted, last year’s recession, which was the worst peacetime recession since the Great Depression, would have been three times worse. The world lost $15 trillion in output as a result of COVID-19. The same energy that is being put into vaccination and plans for recovery spending also needs to be put into growth measures to make up for this lost output.
Sub-Saharan Africa faces the task of trying to boost its economy while simultaneously dealing with repeated COVID-19 outbreaks. The IMF explains the three challenges finance ministers in sub-Saharan Africa are facing today: Firstly, to meet increased spending needs; secondly, to contain a pronounced increase in public debt, and finally, to mobilize more tax revenues. How policymakers navigate this trilemma will have a huge bearing on economic and social outcomes in the coming years.
The new reality, due to the pandemic, has left many mothers scrambling. With schools and day-cares closed, many were forced to leave their jobs or cut the hours they worked. New IMF estimates confirm the outsized impact on working mothers, and on the economy. Within the world of work, women with young children have been among the biggest casualties of the economic lockdowns. Three countries—the United States, the United Kingdom, and Spain—illustrate the varied impact of the pandemic on workers.
The race to vaccinate against COVID-19 continues, but the pace of inoculation varies across countries, with access unavailable to many. Global cooperation must be stepped up to produce and distribute vaccines at affordable costs. The sooner vaccinations curb the pandemic, the faster economies can return to normal. Many low-income countries, even after doing their part, face challenges in dealing with the pandemic, in the near term and for development over time, as indicated in recent IMF research. They will need additional assistance.
The crisis has hit small and medium enterprises especially hard, causing massive job losses and other economic scars. Among these—less noticeable, but also serious—is rising market power among dominant firms as they emerge even stronger while smaller rivals fall away.