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IMF chief does not expect recession but it isn’t ‘out of the question’

International Monetary Fund Managing Director Kristalina Georgieva on Monday said she does not expect a recession for the world’s major economies but also cannot rule one out. Asked at a panel at the World Economic Forum whether she expected a recession, Georgieva said: “No, not at this point. It doesn’t mean it is out of the question.” The global economic outlook has darkened in the month since the IMF downgraded its 2022 growth outlook because of the war in Ukraine, China’s slowdown and global price shocks, particularly for food, she ...

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IMF sees tepid German recovery but risks skewed to the downside

The German economy is on track for a tepid economic recovery but risks are tilted to the downside and Berlin should focus on cushioning the impact of the war in Ukraine and on securing gas supplies, the International Monetary Fund said on Monday. Fiscal policy in Europe’s largest economy should be flexible in an uncertain environment, the IMF added in a statement after a mission to Germany. The IMF said it projected that growth in the German economy would slow to about 2% in 2022, picking up in 2023 to ...

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IMF urges Asia to be mindful of spillover risks from tightening

ASIAN economies must be mindful of spillover risks as a decade of unconventional easing policies by major central banks is withdrawn faster than expected, International Monetary Fund (IMF) deputy managing director Kenji Okamura said. This risk applied particularly to the most vulnerable economies, said Okamura, without naming them. Asian economies faced a choice between supporting growth with more stimulus and withdrawing it to stabilise debt and inflation, he said. While Bank of Japan policy runs counter to a global shift towards monetary tightening, central banks in the United States, Britain ...

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IMF’s Georgieva says finance leaders need to anticipate multiple inflation shocks

International Monetary Fund Managing Director Kristalina Georgieva said on Thursday that global finance leaders may need to become more comfortable with fighting multiple bouts of inflationary pressures. Georgieva told Reuters on the sidelines of a G7 finance ministers and central bank governors meeting in Germany that it is getting harder for central banks to bring down inflation without causing recessions, due to mounting pressures on energy and food prices from Russia’s war in Ukraine, China’s zero-COVID policies that have slashed manufacturing with lockdowns, and the need to reorder supply chains ...

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Reaping efficiency gains through product market reforms in China

The impressive emergence of China’s economy is set to lose some momentum as the country catches up with more advanced economies and its rapid ageing also weighs on it. However, China can still reap the “reform dividend”, especially with measures to keep up the sustained growth of productivity. Reforms that enhance competition in product markets are among those that can potentially bring about significant productivity gains. China has been lowering the burden on start-ups and simplifying administrative procedures for a while already, achieving significant progress, though more procedures could go ...

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IMF chief optimistic G7 funds for Ukraine can stave off hyperinflation

International Monetary Fund Managing Director Kristalina Georgieva said on Thursday she was “getting more optimistic” that a G7 agreement to provide new budget funding to Ukraine can be reached and can help the country avoid hyperinflation. Georgieva said on the sidelines of a G7 finance ministers’ and central bank governors’ meeting that the main issue for the funding would be its timing – avoiding delays that may push the country into monetary financing, where its central bank effectively funds the government. “You know, what happens if a country has to ...

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Unemployment rate in the OECD falls further to 5.1% in March 2022

The unemployment rate in the OECD fell further to 5.1% in March 2022, from 5.2% in February. This represents a continuation of a positive trend for the OECD and the 11th consecutive month of falling or stable unemployment, keeping it below the pre-pandemic rate of 5.3% recorded in February 2020 (Figure 1). Indeed, the unemployment rate was below the pre-pandemic rate in two-thirds of OECD countries in March, compared with just half of them in February (Figure 2). Moreover, the number of unemployed workers in the OECD continued to fall, ...

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Leading indicators continue to point to growth losing momentum in Europe

The OECD Composite leading indicators (CLIs) continue to point to growth losing momentum in Europe and to stable growth in the OECD area as a whole. In Europe, shaped by surging inflation and declining expectations in manufacturing, the CLIs continue to indicate growth losing momentum in the euro area as a whole, including in France, Germany and Italy, as well as in the United Kingdom. Outside Europe, the CLIs continue to point to stable growth in Canada, Japan and the United States. Stable growth also continues to be anticipated in ...

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Household income falls slightly in OECD area in Q4 2021, despite continuing GDP growth

In the OECD area, GDP per capita rose by 1.2% quarter-on-quarter in the fourth quarter of 2021, but real household income per capita fell by 0.3% (Figure 1). Real household income per capita has stagnated during the past six months and trailed growth in GDP per capita for the third consecutive quarter. While the trend in GDP per capita reflects the recovery in economic activity after sharp declines in the early stages of the pandemic, the trend in household income per capita reflects, among other things, reductions in pandemic-related government ...

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Inflation in the OECD area surges to 8.8% in March 2022 as energy prices continue to rise

Consumer prices in the OECD area rose by 8.8% year-on-year in March 2022, compared with 7.8% in February 2022, and just 2.4% in March 2021; it was their sharpest increasesince October 1988. Around one fifth of OECD countries recorded double-digit inflation, with the highest rate in Turkey at 61.1%. Energy price inflation in the OECD soared to 33.7% year-on-year in March, up from 26.6% in February, its highest rate since May 1980. Excluding food and energy, year-on-year inflation increased to 5.9% in March, after 5.6% in February 2022. Year-on-year inflation ...

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Inflation to be Elevated for Longer on War, Demand, Job Markets

The war in Ukraine will quicken inflation, which we now expect to remain elevated for longer than previously forecast on higher commodity costs and broader price pressures. As the Chart of the Week shows, our latest World Economic Outlook now projects faster consumer-price increases this year for advanced economies as well as in emerging market and developing economies. These forecasts also have a high degree of uncertainty. Russia’s invasion of its neighbor will likely have a protracted impact on commodities, affecting oil and gas prices more severely this year and ...

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Navigating the Economic Obstacle Course while Addressing Long-Term Challenges: The Role of IMF Capacity Development

Thank you, Dominique. I am very pleased to chair today’s important event, which is already becoming a semi-annual tradition. This dialogue, as you know, aims to further strengthen our partnership in capacity development to respond to countries’ immediate and long-term needs. We look forward to hearing from you as much as sharing with you our experience and priorities, particularly at a time when policymakers face immense challenges. As we enter the third year of the pandemic, the global economy is facing a combination of shocks and policy challenges rarely seen ...

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Ukraine war to curb Central Asian economy, oil cushions Middle East -IMF

The war in Ukraine will sharply reduce economic growth in the Central Asian region in 2022, although higher oil prices will lessen the impact for the Middle East and North Africa, the International Monetary Fund said. Both regions will still feel the effect of surging commodity prices, and higher wheat prices alone could increase the Middle East and Central Asia’s combined external financing needs by up to $10 billion, the IMF said. “The war in Ukraine will be the dominant factor shaping the outlook, compounding global headwinds from faster-than-expected normalisation ...

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G20 debt relief talks should take three months, says IMF Africa head

Debt restructuring talks between creditor countries should take three months, the head of the IMF’s Africa Department told Reuters, amid criticisms of the slow speed of negotiations and calls for China to show leadership in tackling debt issues. South Africa has offered to co-chair Zambia’s creditor committee, following China’s pledge to do so at IMF meetings last week, but Zambia’s debt sustainability analysis has yet to be finalized, Abebe Aemro Selassie said in an interview. Zambia, which became the first pandemic-era default in 2020, Ethiopia and Chad all sought debt ...

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OECD countries advancing slowly on sustainable development targets by 2030

Despite progress made since the adoption of the 2030 Agenda for Sustainable Development and its 17 Goals (SDGs), OECD countries have met or are close to meeting only a quarter of the targets for which performance can be gauged, according to a new OECD report. Virtually all OECD countries are already securing basic economic needs and implementing the policy tools and frameworks mentioned in the 2030 Agenda. But progress towards 21 targets on issues such as ensuring no one is left behind, restoring trust in institutions and limiting pressures on ...

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