Entries for 'COVID-19'

Total global debt rose by $3.3 trillion in Q1 2022 to a new record of over $305 trillion-mostly due to China and the U.S.

Some $10 trillion was added to the global debt mountain last year, bringing the total to a new record high of $303 trillion.

China's post-Covid stimulus was more restrained than after the great financial crisis (GFC) even though the Covid shock was about twice that by GFC in terms of the damage to GDP growth.

The pandemic combined with the current political paralysis have exacerbated vulnerabilities in the economy. Tunisian policymakers face difficult choices in stimulating growth while reducing macroeconomic imbalances. 

Some $4.8 trillion was added to the global debt mountain in Q2 2021, bringing it to an all-time high of $296 trillion. Better news: the global debt/GDP ratio declined significantly in Q2 2021, though this follows a large spike in 2020.

We expect real GDP growth to remain around 4% in FY2021/22. Monetary policy remains accommodative. Adequate net capital inflows will offset the widening CA deficit, increasing FX reserves. We expect further fiscal consolidation supported by ongoing reforms under the IMF EFF arrangement. 

Higher oil prices will lead to modest growth, shift the CA to a surplus, and narrow the fiscal deficit. The resurgence of COVID-19 has set the recovery back, but progress on vaccination has improved resiliency. Key reforms to reduce oil dependency and promote private sector growth are needed. 

Domestic consumption lagged export growth in China’s post-COVID-19 recovery. This is in part because stimulus policies have targeted businesses instead of households. Surging household debt, uneven income and wealth distribution across China have tamped down consumption rates.

Growth prospects have improved, spurred by copper prices and public spending; Chile is on track to be one of the first LatAm countries to return to pre-pandemic output. However, political uncertainty weighs on investment, clouding the medium-term outlook. Doubt is rising on the rollback of spending.