It is widely believed that China's household consumption relative to GDP is exceptionally low. However, China's consumption seems to be undercounted, especially spending on housing.

China has made significant progress in its clean energy transition, improving energy security by reducing import dependency and lowering carbon emissions. However, China is likely to miss its near-term energy and carbon intensity targets. China needs to intensify its efforts in green transition.

Russia s fiscal breakeven price will decline to $77 bbl in 2025, supported by improvement in oil and gas revenues.

Revenue shortfalls will contribute to wider fiscal deficits in 2024-25. Meeting the targets will require sizable expenditure cuts, which seem tough to implement. Higher borrowing costs relative to regional norms further limit the maneuvering space.

The Emerging Europe region is heavily reliant on demand from Germany or the broader Euro area. Growth risks also stem from external demand from the Middle East, though less so. The region s growth momentum slowed in 2024Q2, primarily due to weak production in Germany.

This note uses data from the UN's Comtrade database to investigate trade in sanctioned goods from the Caucasus and Central Asia Region. We find that exports of sanctioned goods from the region to Russia increased substantially since February 2022, exposing the CCA to potential secondary sanctions.

Growth in the Caucasus is forecasted to ease, though it will remain above pre-2022 levels. Likewise, the external picture will continue to normalize towards pre-2022 levels, as the positive effect of inflows of Russian migrants, businesses, and capital diminishes. Risks will remain tilted downwards.

Divergent inflation outcomes have placed SSA-4 at different phases of monetary policy stance. Softer inflation in South Africa and Kenya appears to have created room for interest rate cuts. Central banks in Nigeria and Ghana will likely keep rates unchanged into 2025.

In this LatAm Views, we analyze Chile's fiscal outlook, emphasizing the need to prioritize fiscal discipline to meet the 2024 target and advance an ambitious social agenda, amid a polarized political environment.

A disinflation trend has ended in the CEE-4 region, limiting room for future interest rate cuts. Historic-low unemployment rates keep wage increases above inflation across the region. Renewed depreciation pressures pose a risk, should public debt concerns trigger a selloff.

The PBoC carried out a flurry of policy changes after the Governor's speech in mid-June. These moves signify PBoC's desire for a nimbler open market operation, a better interest rate transmission, and a steeper yield curve. We examine the implications of these changes.

Nonresident capital inflows will increase to $136bn (6% of GDP) in 2024, primarily driven by sovereign bond issuances in Saudi Arabia to finance its fiscal deficit. However, net resident outflows, largely GCC transfers to SWFs, will still far exceed net nonresident inflows.

This note explains how the PBoC is managing CNY using a wide range of tools and how such interventions offer arbitrage opportunities and thus attract capital inflows. Despite these tools helping to stabilize CNY, we think the cost of intervention is too high.

Positive developments in recent months, most notably the Ras El-Hekma, deal bode well for Egypt. The macroeconomic ramifications of these developments should help boost growth, reduce inflation, put public debt on a downward sustainable path, and improve the external position.

China s growth in 2024Q2 was disappointing as housing woes continue to weigh on the economy. The execution of fiscal deficit has been behind schedule and monetary policy has been unresponsive. We stand ready to lower China's growth forecast if there is no effective policy response in July.

The Bank of Korea (BOK) held its benchmark rate steady at 3.5% in July, despite the improving inflation situation. We see the BOK policy rate tracking the expected policy rate cuts in the USA, in order to reduce capital outflows and exchange rate volatility.

We recently brought ten IIF member institutions to Beijing and Shanghai. In the 17 meetings in three and half days, we met with policymakers, think tanks, local economists, and international institutions. This China Spotlight summarizes the takeaways from our investor trip.

We forecast sustained growth in the region this year and next, driven by strong services and remittances. Nearshoring opportunities have driven an upturn in foreign direct investment flowing into key countries. Addressing institutional shortcomings remains crucial for attracting broader investment.

This note summaries the main topics discussed during our online investor trip to Egypt. Overall, participants outlook on the Egyptian economy was broadly positive, with many citing the massive liquidity injection stemming from the Ras El-Hekma deal has the main upside development.

Kenya s outlook has improved on the back of reforms in the context of the IMF program. The recent Eurobond issuance, combined with multilateral support, has improved sentiment. Softer local food prices due to favorable weather supported disinflation, paving the way for rate cuts.

Orthodox policy continuation should lead to further investor interest in Turkish assets. The current tight monetary policy will help reduce inflation and narrow the current account deficit. Maintaining a sufficiently tight policy stance will also help attract nonresident capital flows.

This note gives our outlook on the oil market for 2024 and 2025. We expect oil prices to average $83/b in 2024 and $78/b in 2025 as global demand weakens and supply remains robust.

Despite a record-high trade surplus, China s foreign reserves haven t increased much due to service deficits and the deterioration in non-resident capital inflows, particularly in FDI. The PBoC is diversifying its FR holding by paring back US treasuries and increasing the holding of gold.

China s housing rout is already in its third year and is still unabated. The trajectory of home prices in China appears to be similar to the average of ten major housing crises in the world. More forceful policy response is needed before the housing rout causes greater damage, especially to banks.

After bottoming out over the past two years, the momentum of nonresident capital flows to emerging markets has shifted. This in large part due to a better EM outlook relative to advanced economies, with average EM output growth likely to be higher and EM interest rate spreads likely to widen.

There has been a growing international concern that China has been manufacturing beyond its capacity to absorb. While there is some cyclical evidence to support this claim, there doesn t appear to be structural evidence, and some of the evidence is mixed.

Despite painful corrective measures, public support for the government has remained strong. Fiscal consolidation, a deep recession, and exchange rate stability should further reduce inflation in 24H2. A stronger international reserve position is key for foreign exchange market liberalization.

Easing structural bottlenecks will gradually lift output growth in 2024 and 2025. However, higher for longer local rates will prevail as a result of sticky inflation. A narrower trade surplus will cause the current account deficit to widen further.

We examine the policy outlook for Panama and the Dominican Republic ahead of upcoming elections. In the Dominican Republic, policy continuity should bolster a growth recovery amid external headwinds. Panama s fiscal challenges, however, have risen given the loss of its investment grade status.

Growth will remain robust, the external position is strong because of large capital inflows and a small CA deficit, favorable demographics combined with reforms would raise potential growth to above 7%.

China is striving for an economy less built with steel and cement but more powered by batteries and chips. While helping lift productivity, the advanced manufacturing sectors cannot create enough jobs. China still needs a more balanced growth with a growing service sector for job creation.

We expect growth to slow to 3.5% in 2024, due to stagnant oil production and moderation in private consumption. Risks remain balanced, trade diversification and higher oil prices are the primary upside risks while a potential shutdown of the CPC and secondary sanctions are the main downside risks.

The PBoC's monetary easing is not straightforward as it works on both the pricing and quantity side with numerous policy tools. While overly cautious on the rate cuts, the PBoC's easing on the quantity side has been more aggressive than most realize. More PBoC easing is needed in 2024.

After a surprising election result, in which PTI-backed candidates won a majority, a fragile coalition government was formed. We expect appetite for reforms to be weak, which may hinder or prolong negotiations for a new IMF program. The biggest hindrance will come from fiscal consolidation.

Saudi Arabia's short-term macroeconomic outlook remains favorable, despite tighter global financial conditions. We expect non-oil growth to remain robust at 5%, driven by consumption and investment. The current account will continue to narrow, while capital outflows will outweigh capital inflows.

Sustained strong wage increases should lead to consumption-driven growth. We forecast inflation to decrease gradually, but to persist above target through 2025. Structural rigidities, such as sizable dividend payments, will keep the C/A deficit large.

The ANC has been losing popularity due to new parties coming on board and stagnant economic growth. Polls suggest some provinces will form coalitions, but the ANC will likely retain national power. The ANC s five-year plan hinges largely on a continuation of their current policy priorities.

Strong activity, supported by nearshoring opportunities, has lifted market sentiment. Pre-election public spending will complicate fiscal consolidation in 2025. Favorable external conditions should help sustain growth, but we remain cautious about medium-term prospects.

China's announced headline fiscal deficit of 3.0% of GDP is only the deficit of a narrow fiscal account. The consolidated fiscal deficit in 2024 can be as high as 8.2% of GDP, higher than last year's actual fiscal deficit of 7.0% of GDP.

Consumption remains strong, despite tighter monetary policy. Further monetary tightening and slower depreciation would help ease inflation. The current account deficit looks set to narrow in 2024, which should help authorities maintain Lira stability into 2025.

We maintain a cautious view on the impact of US sanctions relief on Venezuela's oil sector. Prospects hinge on the extent of sanctions reimposition, including licenses for private oil companies. We project real GDP growth of 4.2% in 2024, amid higher oil production and a decline in inflation.

China today bears uncanny similarities to 1990s' Japan in terms of demographics, housing correction, and debt overhang. On the other hand, there are also differences and the fate is not yet written. This note compares China's economy today with Japan's around 1990.

The historic Ras El-Hekma deal will bring in $35bn of immediate financing within the next couple of months. The cash windfall will help cover Egypt s external financing needs over the foreseeable future and, combined with an expanded IMF program, can boost gross reserves to over $50bn.

Despite the decent real GDP growth of 5.2% in 2023, Chinese investors and consumers are still gloomy. This is because deflation is hurting household incomes, corporate earnings, investor returns, and government taxes, which are all in nominal terms.

External accounts improved last year despite softer commodity prices. Key drivers were remittances, import compression, and services normalization. Manageable external financing needs in 2024 should limit vulnerability, helping attract foreign capital.

We estimate Ukraine s external financing needs at around $24 bn for 2024. Securing sufficiently large and timely funding is key for Ukraine s ability to battle Russia, while maintaining economic and financial stability. Rising defense spending will widen fiscal and current account deficits.

In this report we highlight the potential fallout to the global economy of a wider, prolonged, war in the Middle East. We focus on two scenarios, and see how each scenario affects commodity prices, trade disruption, and global inflation and growth.

We believe Beijing still has the policy capacity to push China s economy towards its growth potential. Though maintaining our above-consensus forecast for 2024 growth at 5.0%, we also caution the downside risk if the demand-side stimulus is inadequate.

Policy changes made by President Tinubu last year were deemed necessary, but acceleration and greater cohesion of orthodox policies across the board are needed. Continued devaluations, without appropriate policies, are most likely a fool s game.

Disinflation progress will prompt deeper policy-rate-cutting cycles regionwide in 2024. Against a backdrop of non-linear disinflation and sizable risks, the challenge for LatAm central banks will be normalizing the policy stance while maintaining hard-won credibility.

China's shadow banks, especially the trust companies, are hurt badly by the deflationary economy and housing recession. The financial risk would be much greater if the regulators had not tightened the shadow bank regulations.

On January 11, the IMF approved the first review of the 9-month SBA program, releasing US$ 700mn in much needed financing assistance. While financing needs for the remainder of the fiscal year should be covered, a successor IMF program will be needed after the SBA ends in March 2024.

The ongoing conflict in Gaza will widen the current account deficit. Gross financing needs will remain very high and available financing will be insufficient unless an IMF program resumes which would usher in additional official financing.

The new EU-friendly coalition government in Poland marks a significant shift in power. Investors maintain cautious optimism about some legislative changes, which would allow Poland to ramp up its withdrawals from the EU funds, improving the outlook.

Chinese banks are facing mounting challenges amid the below-potential growth. The risks posed by the housing and local government sectors are not systemic. However, the deflation and falling lending rates are hurting banks badly.

Gross foreign assets of the GCC countries are forecasted to grow to $4.4 trillion by the end of 2024, in this note we analyze where these petrodollars are being invested.

OPEC+ agreed on a 2.2 mb/d voluntary supply cut for 2024Q1, but prices continued to decline, as traders remained doubtful on whether the agreement will be fully implemented or extended beyond 2024Q1. We expect Brent oil prices to average US$80/b in 2024, as oil supply exceeds demand growth.

China s export machine remains competitive, judging from its stable market share, rising product sophistication, and market diversification. Suffering from overcapacity and anemic domestic demand, Chinese producers are lowering export prices and exporting deflation.

Private consumption expenditure and investment will underpin growth in 2024. But electricity and logistical challenges will continue to weigh on overall sentiment. With the trade surplus likely to narrow, we forecast the C/A deficit to widen in 2024.

China's local government debts have long been on people's worry list due to their rapid growth in size and opacity in structure. In this piece, we illustrate the size of the LG debt problem and discuss Beijing's attempts to defuse the bomb of the LG debt.

We analyze the impact of a potential spike in oil prices on advanced and developing countries, as well as the global economy as whole. We find that the overall effect is much less severe than in previous oil shocks due to structural changes including the reduction in the intensity use of oil.

Investors remain concerned about the authorities ability to maintain Lira stability. This is hindering more substantial investments in Lira-denominated assets. The $211 bn in short-term external rollover needs are also a cause for concern but repayments for bonds and loans appear to be manageable.

This report analyzes the possible political, social, and economic implications of the Israel-Hamas war on the MENA region.

Dollarization would require $30-40bn, but the central bank has run out of usable reserves. Raising dollars in the market looks unfeasible amid little foreign investor debt appetite. The bottom line is that rushing into unfunded dollarization would come at the expense of a painful recession.

We recently led an investor trip to China where people wanted to kick the tires on the ground. This piece summarizes some of the takeaways.

CCA growth continues to surprise, driven by strong domestic demand and inflows from Russian migrants. The dynamics seen since the invasion of Ukraine are forecasted to continue benefitting the region in 2024, however risks remain tilted to the downside.

We look at the expected impact of the recent earthquake on Morocco's economy. In the long-term, boosts from the planned reconstruction may offset the initial negative impact, as the Moroccan government seizes the opportunity to curb pre-existing technological disparities in the affected regions.

Colombia s large current account deficit has narrowed this year. Sharp import compression has been driven by monetary policy tightening. True FDI, among the highest in LatAm, has continued to finance the deficit.

China faces many structural challenges similar to Japan's during its 'lost decades'. However, we think China is facing income stagnation instead of a balance sheet recession like Japan in the 1990s.

Inflation momentum is fading in most of the CEE-7 region, except in Turkey. Rising oil price is a risk for the inflation outlook, so are currency depreciations. We expect restrictive stances into 2024 to keep inflation expectations in check.

We look into the issue of exchange rate misalignment in Egypt. We find that the current real effective exchange rate is overvalued by around 10%. The results support our view that Egypt's currency must be allowed to float, and that this must also be accompanied by tighter structural policies.

Capital inflows are set to rebound in 2023 as sovereigns, particularly Saudi Arabia, issue more debt to finance fiscal deficits. However, resident outflows, largely GCC transfers to sovereign wealth funds, will continue to far exceed nonresident inflows.

A hard-won agreement with the IMF puts off tough decisions until after the election. We estimate the external financing gap at $16bn in 2023. Thus, the primary election is critical. We expect the opposition to do better than expected, but the situation is highly uncertain and market sensitive.

This note is the third installment of our series of reports focusing on Egypt. We look at the composition of privatization proceeds in FY 2022/23 and then analyze potential prospects for privatization in FY 2023/24.

We continue our series of reports focusing on Egypt by analyzing the fiscal outlook for the next fiscal year.

The IMF recently agreed to a 9-month, US$ 3bn, program, providing Pakistan with a temporary financial lifeline. However, much needed fiscal measures and structural reforms will be put on hold in an election year. Increasing the risk that future tranches of the program may not be disbursed.

Brazil s trade surplus has been building steadily in recent years. The decomposition of trade flows shows agricultural export volume as the catalyst. We estimate the trend trade surplus at 2.2% of GDP, up from 1% a decade ago, given productivity and arable land potential driving agricultural growth.

China's recovery lost momentum in 2Q due to both cyclical and structural woes. We expect GDP to accelerate modestly in 2H thanks to extra fiscal firepower, yet remain below the growth potential.

Fiscal and external breakeven oil prices are set to increase this year. This is due to both a fall in oil production as well as to increased government spending.

President Bola Tinubu took a bold policy stance since assuming office on May 29. Key was the removal of the fuel subsidy and adopting a managed float FX regime. The impact of the two changes will drive inflation but a unified FX is expected to provide medium to longer term macro-economic stability.

This note kicks off a series of reports focusing on Egypt, which we plan to release over the coming months. Today s note will discuss Egypt s external financing picture for FY23 and FY24.

The policy interest rate hike on June 22 was smaller than market expectation. Output growth appears to remain a key policy priority for Turkish authorities. If lending rates stay below expected inflation, strong credit demand will persist.

The real estate prices will continue to rise in the UAE and Saudi Arabia, albeit at lower pace.

China's exports are facing strong headwinds of weaker global demand. We expect the whole-year exports to fall, failing to drive economic growth this year.

Crisis risk is on the rise ahead of the October presidential elections. We put the 2023 external financing gap at $15bn amid negative net foreign reserves. Advancing IMF money could help but will require policy corrections. The next administration will be pressed to adopt a stabilization plan.

Oil prices have moderated, on the back of easing demand and improvements in supply. However, the range of uncertainty in the price of oil will remain significant throughout the rest of the year.

Following a controversial election, Nigeria s new President will be sworn in this month. The new administration faces persistently high fiscal deficits and growing external vulnerabilities. FX-denominated debt has grown substantially, making future debt service requirements daunting.

China s economy recovered robustly in 1Q at 2.2% q/q and 4.5% y/y, beating the consensus estimate. We believe the growth is still below potential and can continue expanding for the rest of the year. We revise the whole-year forecast by 0.4 pts higher to 6.0%.

Banks in China suffered from rising non-performing loan (NPL) formation in Covid years. Banks are still well-capitalized thanks to the aggressive capital raising in the past years, and business conditions are improving as the economy and loan demand recover.

We expect average oil prices to decline from $100 a barrel in 2022 to $85 in 2023 and $80 in 2024. The main downside risk to the oil price forecast is weaker than-expected global growth. Growth accelerated to 7.9% in 2022, driven by a substantial increase in hydrocarbon output and elevated oil prices.

The headline deficit reported by the official budget is nar-rowly defined and thus misleadingly low. We calculate and present the cash-basis consolidated deficit, which is more than twice as large. The large deficit helps to avoid a fiscal cliff like the one in 2021.

China s gigantic official foreign asset is still a black box. This note looks into the changing structures and management of China s foreign reserves and other foreign currency assets.

Kilicdaroglu is expected to win the presidential elections in the second round of votes on May 28, although the margin of error suggests that confidence in such a prediction should only be medium. The next government will face significant challenges, requiring but not necessarily leading to a pivot to orthodox policies.

GDP growth is expected to soften in 2023, weighed by weaker exports and domestic demand. Fiscal consolidation since 2020 helped improve the outlook for Romania s sovereign credit rating, while spending slippages ahead of the 2024 elections may pose upside risks to the fiscal deficit.

MENAP non-oil countries are facing unprecedented challenges. We expect growth to slow sharply, and the current account and fiscal deficits to remain large.

CCA countries have successfully managed to avoid any negative spillovers from Russian sanctions. Higher remittances and energy prices led to strong growth. However, risks of secondary sanctions remain, as Western officials begin to clamp down on countries potentially aiding sanction evasion.

Electricity shortages and logistical constraints are expected to weigh on growth. The drag will mainly stem from weakening export growth, while fixed investment and consumer spending should remain robust. Food inflation is proving stubbornly high, the greatest upside risk to inflation.

Authorities reluctance to implement the needed reforms has aggravated Tunisia s preexisting debt problems. In the absence of an IMF program, persistent fiscal and balance of payments financing shortfalls will jeopardize macroeconomic stability.

Reduced gas usage in Europe has helped ease demand pressures on gas prices, leaving the region somewhat less concerned about high energy prices in 2023. Growth and inflation in Hungary are expected to slow markedly in 2023, while monetary policy looks set to remain tight.

Peru s political and social crisis has continued, undermining governability. Social tensions sprout from idiosyncratic institutional fragilities. While macroeconomic policies have remained remarkably unscathed, we have downgraded our 2023-24 growth forecasts following recent developments.

Fiscal consolidation plans were affirmed, but spending targets are too optimistic. A host of tax relief measures were provided to households and businesses, while, the planned takeover of Eskom s debt by government, offers hope for electricity supply.

This report analyzes the determinants of inflation in Egypt, with emphasis on currency movements. Our model suggests that roughly 30% of currency movements are passed on to domestic prices. This finding is important given Egypt's high inflation and recent currency depreciation.

We expect China s GDP growth to rebound to 5%-5.5% this year, thanks to reopening and a low base last year. However, weaker exports, depressed housing, and tight local government finance are strong headwinds.

China experienced a record net portfolio outflow of $80 bln last year. The outflows were predominantly in bonds, suggesting Fed hikes were the main trigger for the outflows.

Given the weak export and housing prospect, consumption is crucial for economic recovery this year. Chinese households amassed almost 18 tln new deposits in 2022, 80% more than the previous year thanks to higher savings, fewer home purchases, and asset reallocation.

Growth across CEE-4 remained relatively resilient to external events. But rising inflation began to weigh on consumer confidence in late 22. Monthly indicators suggest further weakening in activity in 22Q4, while risks of a severe recession in the Euro Area in 23 look less likely.

Strong post-pandemic demand, along with supply constraints, supported base metal prices. These dynamics have since given way to recessionary fears, causing base metal prices to correct sharply in 2022H2. We forecast prices will continue to fall in 2023 before recovering slightly in 2024.

PBoC was restrained in terms of direct FX intervention amid the intense CNY depreciation this year. PBoC increasingly deploys monetary and regulatory tools to lean against the wind. These tools include required reserves on FX deposit and forward contracts, and macroprudential policies.

China's PPI is trending down and diverging from others, a sign of a weak domestic economy and deglobalization. CPI is subdued due to housing woes and lockdowns. Despite the domestic weakness, China is not exporting deflation. CPI may face moderate upward pressure late next year due to food and service prices after reopening.

Major SSA-4 countries remain vulnerable to the war and global recession. Ghana faces the highest risk of distress amid rising government debt, a depreciating currency, elevated inflation, and declining FX reserves. Softer commodity prices and tight financing conditions will help ease inflation.

RMB experienced a record pace of depreciation this year, driven by Fed hikes and interest rate arbitrage. The large current account surplus is partly offset by a record large portfolio outflow. However, the expectation of further depreciation is absent this time, unlike in 2015-16.

Elevated levels of inflation remain the biggest challenge for CEE-4. Meanwhile, concerns over a recession will likely weigh on demand. This leaves central bankers in a tricky position to strike a balance. The market anticipates interest rate cuts will begin sooner in 2023.

Elevated commodity prices deteriorated CA balances across CEE-4. Fiscal deficits will likely improve in 2022 from a year earlier for most CEE-4, while a higher imported energy bill is expected to widen CA deficits markedly. The region will likely end 2022 with sizable fiscal and CA deficits.

CCA countries have shown remarkable resilience in the face of external shocks. A sharp increase in tourism receipts and remittances, along with high energy prices, led to solid growth. While the terms of trade shock has had diverging effects on the region.

The IIF Sustainable Finance Monitor covers key developments in the global sustainable finance agenda in addition to policy and regulatory updates and a market snapshot.

Investor sentiment towards oil exporters in the region will remain favorable due to elevated energy prices. Total capital inflows will remain modest in 2023, as sovereigns issue less debt due to continued fiscal surpluses. FDI will become the main conduit for nonresident capital inflows.

We have increased our 2022 LatAm growth forecast to 3.1% amid a robust H1, despite recent drag from softer commodity prices and forceful monetary tightening. While policy adjustment and global headwinds will weaken activity in 2023, the external environment could encourage LatAm asset allocation.

The NBU has financed roughly 30% of the fiscal deficit with monetization. Ukraine s deficit is $4 bn due to higher military and social spending. Fiscal dominance is undermining the monetary transmission mechanism. Cutting spending is neither possible nor prudent during the war with Russia. Small adjustments can be made on the revenue side and monetary framework. Ukraine needs more external financing and a sound macro framework.

Investors are pricing in more checks and balances post-election. The new political landscape could make the macroeconomic policy framework more resilient. Despite rising transition risk, we do not expect a full-blown crisis. We remain optimistic as incentives for moderate policies have increased.

The upcoming presidential election has become more contested. Yet despite rising transition risk, we do not expect full-blown institutional crisis, and a relatively smooth transfer of power could lift investor confidence. Regardless of who wins, the overall economic framework should stay unchanged.

Energy supply shortages will weigh on near-term growth prospects for the CEE-4 region. Covid-driven supply chain stress is off its peak, but a return to pre-Covid norms will take time. The CEE-4 region could help make global supply chains more resilient if the region can attract more FDI.

We expect oil prices to average $101/b in 2022 and $85/b in 2023. However, the range of uncertainty remains large, including the extent of production cuts in Russia and in major OPEC members, the impact of the G7 oil price cap, and the prospects of nuclear agreement with Iran.

ASEAN-5 is highly dependent on China for exports. The region is also an important indicator of global activity. External demand remained surprisingly robust in 1H2022. However, we expect some deceleration in 2H2022. China s slowdown remains the key risk for ASEAN-5.

We expect average food prices to peak in 2022 and then decline by 11% in 2023 as supply conditions improve. Base metal prices will decrease by 14% in 2023 weighed down by rising yields and slowing global growth.

Costa Rica s current account deficit remains manageable, and the external funding outlook is favorable. The real exchange rate has depreciated, favoring external adjustment. However, inflation pressure has intensified, and global bond issuance remains a challenge amid political resistance.

Potential IMF financial support would help meet the large financing needs and strengthen confidence in the economy more broadly.

Non-residents have cut their holdings of Lira-denominated bonds to historic lows, while still keeping sizable positions in Turkish Eurobonds. Turkey might need to attract more non-resident deposits going forward, unless external debt rollover ratios could be pushed higher.

Exchange rate flexibility has become a key tool to absorb external shocks in most large LatAm economies despite high inflation. Yet fear of floating remains pronounced in highly dollarized economies, increasing vulnerability in Argentina, Ecuador, and much of Central America and the Caribbean.

Higher inflation in Chile reflects multiple factors. Demand pressure has eased but remains high. Currency depreciation has offset falling global commodity prices and extended the tightening cycle. Inflation in 2022 is likely to remain above 10% y/y even with a more favorable sequential path in H2.

The Colombian peso has seen a plunge this year amid global and local factors. External and fiscal imbalances remain wide despite a windfall from commodity exports. Uncertain policy plans of the incoming administration have exacerbated FX pressure.

The impact of U.S. interest rate increases on the GCC will be limited in an environment of high oil prices.

Spiking commodity prices will dampen momentum in Frontier LatAm. We have lowered our 2022 growth projection amid the war in Ukraine. Recovery in tourism and still-high remittances would partly mitigate the drag. Higher oil prices and slowing external demand could worsen fiscal and external pressure.

The CEE-4 outperformed Euro area GDP growth in 2022Q1. Uncertainty and fallout from Russia’s invasion of Ukraine, as well as tighter policies are to blame. Central banks may need to tighten policies further should depreciation pressures rise. Energy supply shortages could trigger a severe recession.

Sanctions on Russia combined with supply shortages elsewhere may keep oil prices elevated despite lower global demand. Higher global oil supply combined with weaker demand growth could stabilize the oil market in H2 2022 and in 2023.

This note further updates IIF members on the most recent developments in digital assets policy, following on our member-only briefing notes of March 3 on global digital assets policy and March 18 on United States (U.S.) President Biden’s Executive Order on digital assets.

The adverse effect of the latest surge in oil prices is likely to be much smaller than those arising from previous shocks. Advanced and emerging economies have substantially reduced the amount of oil used per unit of output.

China’s total foreign assets doubled in the past 11 years to $9 tln by mid-2021. However, considering the size of China’s GDP and the investments in its own assets in HK, China’s financial integration with the world still has a long way to go.

If you would like to receive the Sticky Notes email, please send us an email' here ' with your information. This week is our "all politics" edition o.

OPEC and Russia have agreed to lift oil output starting July 2018.' The agreement is ambiguous with no concrete output targets and country level alloc.

High oil prices will provide a boost to economic activity through additional public spending. The external position will strengthen and the fiscal def.

For the second time this year, central banks in the region have raised their policy rates by 25 basis points. This tightening comes at a time when cre.

Recent large-scale protests over austerity measures have led to a new aid pledge from the Gulf. The recent tax bill, which focused on regressive measu.

Supply outages, extension of the OPEC production cuts, and geopolitical risks pushed oil prices higher. Continued supply disruption in Venezuela and p.

The impact could be muted if the main energy trading partners of Iran secure exemptions from the U.S. or can find a way.

Higher oil prices will widen the current account surplus from 2.5% of GDP in 2017 to 9.6% in 2018. The fiscal deficit, including investment income, wi.

Already this month, the Trump Administration sent a high-level trade delegation to China, announced its withdrawal from the Iran deal, moved the U.S.

On April 19, the IIF hosted the second annual Washington Policy Summit, bringing together U.S. administration officials, leading policy analysts, and.

We do not expect President Trump to sign Iran sanctions waivers on May 12th' However, this will not result in the immediate collapse of the JCPOA The.

The central banks of Saudi Arabia raised its policy rates by 25 basis points last Thursday The preemptive hike in policy rates may be partly due to co.

While political reforms may be delayed, a shift to private sector-led growth and diversification away from hydrocarbons would help to achieve sustaine.

The peso is among the weakest EM currencies year-to-date. This reflects a rapidly widening current account deficit, in part due to pent-up demand. Whi.

An ingrained decline in core inflation?' Core inflation fell to its lowest level since 2007, driven by items related to the food & beverage and trans.

The recent withdrawal of Hariri's resignation, as prime minister, and the commitment of the cabinet to stay out of regional conflicts, will ease the p.

Emerging markets are well positioned to scale up green finance, given strong growth prospects and rising demand for green products-with green bond iss.

The Principles incorporate voluntary, market-based, flexible guidelines for the behavior of sovereign debtors and private creditors with the aim of pr.

Congress and the Administration have pivoted to tax reform; many obstacles are in the way We think it's unlikely the President will sign comprehensiv.

Prolonged low oil prices and the need for further fiscal consolidation has shifted the economy to a lower growth path, which will not create sufficien.

The general government budget is likely to remain in surplus this year, as tax revenue grows robustly and capital expenditures remain at their lowest.

The fiscal deficit that narrowed to 2.2% of GDP last year is likely to widen to 2.9% this year, as the government increases pensions and spending on d.

Markets seemed to move last week based on President Trump's July 12th statement that his Administration would impose tariffs or quotas on steel. ' As.

PM May's snap election backfires spectacularly and a Conservative power struggle could follow. Hung parliament with the Northern Irish DUP providing C.

As expected, RBI kept the repo or policy rate at 6.25% at its June 7 MPC meeting, looking through below-target inflation since November 2016 to stress.

Saudi Arabia, UAE, Bahrain, Egypt, Jordan, and few other allied countries have cut diplomatic ties and transport links with Qatar, the largest LNG exp.

We expect GDP growth of 1.4% in 2017 and 0.0% in 2018 Reality is starting to bite as inflation is putting downwards pressure on consumption " " and.

We expect fiscal stimulus to fall short of lofty expectations We assume trade tension will stay shy of broad-based tariffs and more disruptive measure.

Stability in oil prices to be challenged in coming months OPEC seems to have adhered to production cut" " but US shale producers are ramping up prod.

Job growth accelerated in January and labor market appears strong Productivity growth has picked up and investment is likely to increase Disappointing.

Real GDP declined 0.2% in 2016, but growth resumed in the second half of the year.' Rising oil prices helped stabilize the ruble at RUB/$60 level, 20%.

Le Pen takes the lead from Fillon in the latest French first-round polls Macron is building momentum and is a serious contender SPD nominates Schulz a.

UK Supreme Court upholds parliamentary sovereignty More involvement from Parliament will not significantly alter course Hard Brexit from EU remains ba.

President Trump's economic team is taking shape, and we have compiled statements from the key players. As you'll see, there is some ideologically dive.

Core inflation remains weak, despite massive monetary stimulus We think the balance of risks to inflation and growth are no longer to the downside" ".

As a new U.S. Administration takes office and election risk looms in Europe, policy uncertainty has risen to remarkably high levels. To help assess th.

Green finance-which encompasses a broad range of financial services and investment activities that take into account environmental factors alongside r.

The 2017 budget envisages spending increase of 6% as compared to the 2016 budget. However, the settlement of arrears caused actual spending in 2016 to.

The proposed changes to the Basel III capital framework could further accentuate de-risking trends by global banks, with adverse impacts on cross-bord.

We've discussed previously the uncertainty around the impacts of the U.S. election and the course of U.S. policy . However, recent personnel announcem.

OPEC agrees to reduce production by 1.14 mb/d to 32.5 mb/d. Russia and other non-OPEC countries also chip in. Oil prices have spiked, but the continui.

The bold but controversial demonetization initiative is a political gamble and will adversely affect growth over several quarters, but should also hav.

Economic resilience is coming to an end. Uncertainty is the only certainty in the Brexit process. Trump p.

State-Owned Enterprises (SOEs) remain critical to China's economy. They dominate heavy manufacturing, financial services, utilities, telecom and defen.

The Trump transition operation remains a bit of a muddle to outside observers. In our latest Weekly Insight , we noted that it was unclear how Trump w.

President Duterte, who came into office on June 30, is stepping up macro stimulus and growth-enhancing reforms, while seeking to fulfill campaign prom.

Expansionary macroeconomic policies and buoyant consumer confidence are likely to propel near-term growth.' The widening trade deficit suggests that t.

Article 50 to be triggered before April 2017. UK priorities point towards a "hard" Brexit. Financial services are in the crosshairs. Initial calm, but.

PDVSA has proposed to exchange senior unsecured bonds maturing in 2017 ($7.1.

Political tensions reflect a deepening sense of disconnect between voters and officials and perceived intangible threats to national identity.

Corporate investment will be held back. Government can do little to undo damage from uncertainty. Winners and los.

After years of exploring unconventional approaches, space for increasing monetary support to address sluggish growth and sub-target inflation in the a.

Oil markets are moving slowly towards balance through a moderating increase in global supply and a steady increase in demand. We expect oil prices to.

This study examines the role of U.S. monetary policy in determining the incidence of emerging market crises. We analyze the determinants of currency c.

Today's flash PMI for the UK and the euro area confirms our view that the economic impact from Brexit is asymmetrical, with the UK bearing the brunt o.

Video of IIF - Accion -The Business of Financial Inclusion Insights from Banks in.

Europe is most affected by spillovers, the United States less so. More d.

With the economy sliding into recession and inflation surging, the Central Bank of Nigeria announced plans to abandon its fixed exchange rate policy a.

The consequences of a British vote to leave the EU would be felt across the global economy and financial markets. From the perspective of the pri.

Grappling with Adversity Our recent visit to Lusaka found an economy struggling in the aftermath of a collapse in copper prices, a hefty depreciation.

The oversupply of oil is slowly declining, helping to support prices. Growth in OPEC supply is likely to slow once Iran reaches pre-sanctions output.

Our recent visit for a Conference (held jointly with Exim Bank/NSE/IFC) on "Fulfilling India's Potential" found a generally positive mood with improvi.

Merkel is weakened domestically. France is entering a year of presidential elections. There is very little polit.

Fujimori wins first round. With 83% of the votes now counted, Keiko Fujimori (Fuerza Popular) won the presidential elections held on April 10 with alm.

The next step is mustering political support for wage ne.

Positive Policy Steps Amid Concerns Global uncertainties, weak oil prices and a challenging political backdrop have prompted the government to take m.

At the end of last week's "intense but civil" negotiations, Argentina offered three proposals to settle with its holdout bondholders. The offers will.

Government officials and bankers with whom we met painted a mixed picture of current conditions and prospects for the UAE economy. While most official.

Discussions during our recent visit to Kuwait highlighted improvement in the implementation of the five-year development plan and gradual fiscal conso.

The view from both official and private sector meetings in Frankfurt is that the Euro area economy maintains momentum for now but risks are rising, pa.

Unfavorable withholding tax regimes could reduce the attractiveness of local currency' government bonds for non-residential investors and hinder both.

Actual spending declined by 12.6% in 2015 due to better than expected cost control measures. Nonetheless, the sha.

The sharp decline in oil prices over the past 18 months has provided a major economic shock to oil-exporting countries. In our analysis, we focus on s.

The Russian government is trying to ensure a sustainable fiscal position in the face of dropping oil prices, while still allowing room for the economy.

A massiv.

Growth has strengthened, although there are pockets of weakness. Real GDP rose 7.4% in the July-September quarter from a year earlier. P.

A pivotal victory. Amid strong voter turnout (about 74%), the opposition candidates unified under the Democratic Unity Round Table (MUD) have thus far.

Growth remains soft. Real GDP rose 2.9% in the first nine months of 2015. The decline in farm.

Economic policy in Poland is likely to change after the socially conservative, but economically populist, Law and Justice (PiS) party won the October.

The economy is set to contract 3.2% this year and 2.0% in 2016 and grow somewhat in 2017. The recovery i.

With China's Fifth Plenum in focus this week, a key topic is promoting the international use of the renminbi. Internationalization has surged in recen.

The bedrock of policy corrections must be putting fiscal policy on a sustainable path after years of increased public spend.

Global and domestic challenges have led to further growth moderation and exchange rate weakness in Indonesia. The government has responded by redoubli.

Notwithstanding recently approved measures, overall p.

B arring an unexpected surprise, the opposition should seiz.

The shift in strategy pursued by the Saudis, from one of price stability to one of market share, was aimed at reining in high-cost producers and ultim.

Growth has continued to weaken under the weight of a political crisis and an ill-conceived reform drive, as well as the contained weakening of copper.

The Petrobras.

The macro policy framework is allowing a smooth adjustment of the economy to dollar strength, a low oil price and impending lift-off of interest rates.

The central bank is attempting to speed up the de-dollarization pace this year by requiring banks to reduce t.

The growth recovery is being driven by countercyclical support.

The recent decision by the Capital Market Authority to publish regulations governing direct ownership of shares listed on the stockmarket, Tadawul, by.

Despite major real GDP decline in the first quarter of 2015, a stronger ruble and recovering oil prices encouraged officials to proclaim the economic.

The policy response so far has mainly consisted of increasing external borrowing where it still can, but this life line runs the risk of being exhaus.

Uncertainty shrouding the copper mining industry has now been addressed. After negotiations earlier this year, the government modified its proposed ch.

The UAE is in a relatively strong position to withstand low oil prices. Ample public foreign assets will mitigate the adverse impact. Growth is expect.

Growth is projected to slow this year on account of weaker investment and less supportive fiscal conditions.' With public debt remaining high, the imp.

A rapidly slowing economy has prompted the government to reinforce policy easing using monetary, fiscal and administrative measures. Further broad-bas.

Lebanon's economic performance has been lackluster, reflecting policy inaction amid a protracted political crisis as well as the impact of rising regi.

Nigerians voted for change with the election of President Muhammadu Buhari, who campaigned on a platform to improve security and the economy. Although.

The recent framework agreement sets the stage for a final deal agreement this summer that would lift economic and financial sanctions once Iran is dem.

The economy is transitioning to lower sustained growth under the weight of the oil price plunge and tougher external conditions. The current account d.

" Malaysia, as the leading oil and gas exporter in Emerging Asia, was hit by heightened investor concerns in the wake of oil price weakness, but a ste.

Helped by supportive macroeconomic policies, real GDP growth has been robust, and recovering demand for credit among corporations has boosted banks' p.

The impact of a strong dollar and falling oil prices has, thus far, remained manageable. Peso depreciation is acting as an automatic stabilizer while.

The 2015 budget stepped away from the previous countercyclical fiscal approach and introduced measures to address the structural deficit and stabilize.

As the top LNG exporter and the eighth largest exporter of petroleum related liquids in the world, the collapse in oil and gas prices will have a mate.

The sharp drop in oil prices since mid-2014 implies a sharp drop in capital outflows from oil exporters, including reserve accumulation. While in abso.

The extraordinary rise of U.S. shale oil producers has led the U.S. to record crude oil production, rising nearly 4 mbd since 2008 and altering the gl.

The oil price slump has stoked external default fears and heightened risks of social upheaval. The policy response, thus far, has consisted of seeking.

Although Tanzania continues to enjoy strong economic growth, it still faces many developmental challenges. Things are changing, however, and the gover.

The government is struggling to raise growth prospects which have been held back by slowing regional demand, increasing competition from Japan, advers.

The government has asked the IMF for a new and longer EFF arrangement that would help avoid a complete financial meltdown. To work, the new program wo.

Reforms that raise the corporate tax burden, strengthen unions' bargaining power, and increase political uncertainty have unsettled the business clima.

As negotiations between Iran and the P5+1 resumed recently, the stakes for Iran's economic future are high. Sanctions have inflicted heavy damage on I.

South Africa has come through a difficult year that was blighted by extended industrial unrest at a time when the authorities were having to navigate.

Small and medium-sized enterprises (SMEs), the backbone of the European economy, were particularly vulnerable to the crisis in Europe due to their dep.

President Jokowi's government raises hope for successful adjustment to the waning commodity boom and less favorable external financing conditions. Wit.

Trends in portfolio allocation of fund investors (both mutual funds and ETFs) show signs of increasing investor differentiation across emerging market.

A decision to bring forward the presidential election from February to December risks early parliamentary elections in January if the government canno.

Colombia is well-positioned to weather the recent sharp decline in oil prices. Prudent policies and resilient terms of trade have allowed the country.

The recent drop of the ruble and other Russian asset prices reflects changed fundamentals and it is unlikely to reverse unless oil prices recover or s.

This report examines the myriad global economic consequences of the $40/bbl fall in global oil prices since mid-2014. It argues that the price drop is.

The recent dramatic shift in the global oil market is taking its toll on Nigeria, the sixth largest net exporter of oil in the world.' With the rise.

Recent sanctions have inflicted heavy damage on Iran's economy. A broad interim agreement could allow Iran to resume global trade and develop its huge.

Economic growth is improving, but heightened regional security risks continue to dampen business sentiment. With reforms leading to reduced external a.

As the economy deteriorates rapidly amid ongoing tensions in the East and with the October elections having failed to reduce political uncertainty, fi.

The debt default, subsequent deepening of interventionist policies and declining agricultural export prices have weakened macro conditions ahead of th.

A more secure political order since the election of President El-Sisi has shored up investor sentiment, leading to a significant pickup in economic ac.

Oil prices have been retreating since peaking mid-year, driven by a confluence of excess supplies, downward revisions to global growth, and a rise in.

Real GDP growth has slowed sharply this year due to terms of trade losses and an erosion of confidence. To support economic activity, the central bank.

Policy inaction has further deepened macroeconomic imbalances. Meanwhile, stagflation, shortages of goods and public insecurity continue to brew socia.

Nigeria's economy, the largest in Africa, is performing remarkably well. Strong domestic demand is driving growth notwithstanding challenges which inc.

Spreads and yields for Euro Area periphery borrowers have fallen to remarkable lows on buoyant global risk appetite and expectations of QE-like bond p.

C te d'Ivoire has become one of Sub-Saharan Africa's fastest-growing economies since the recent return to political stability and efforts to improve.

Policy-making and economic performance have progressively strengthened since President Aquino came to office in mid-2010. An expansionary fiscal progr.

Real GDP growth has slowed in Poland during the second quarter and inflation has dropped. The crisis in Ukraine has already hit growth by restricting.

Market sentiment toward Portugal has remained mostly supportive since the exit from its EU-IMF program despite news of large losses at a leading bank.

The escalating conflict in eastern Ukraine deepened the economic crisis that follows years of economic mismanagement and widespread corruption. Output.

The policy environment has improved since the formation of the coalition government. Reform of the subsidy system will help to ensure fiscal sustainab.

The reelection of President Juan Manuel Santos has raised hopes for a conclusion to the peace negotiations with the FARC guerrillas. Success would lif.

Growth in nonoil economic activity is improving modestly after a period during which Kuwait has lagged behind peers as the implementation of the 2010-.

Concerned by the deteriorating political situation, the military mounted a peaceful coup in late May. The return to a functioning government should sp.

Slightly tighter market fundamentals and an overlay of increased geopolitical risks have led us to raise our forecast for the average Brent benchmark.

Qatar's economy is continuing to grow rapidly following a smooth leadership transition in mid-2013. 2015 will mark the completion of major hydrocarbon.

SMEs in Greece have been hit hard by the crisis, suffering from sharp declines in output and a marked fall in new lending from banks compared with the.

Algeria's growth model based on hydrocarbon-financed fiscal spending and heavy-handed government intervention in the economy is not sustainable. Softe.

Persistent social protests are threatening political stability and weighing on the economy's performance. Although the government has induced a 60% de.

President Michelle Bachelet is seeking the largest overhaul of the tax code in decades, aimed at raising revenues for greater education spending and i.

Saudi Arabia's economy is undergoing an important shift as oil surpluses-while still large-gradually decline and the government makes a new, big push.

Many observers expect the Fed's imminent policy tightening cycle to weigh on portfolio flows to emerging markets in coming years. The analysis present.

The current macroeconomic performance and near-term outlook remain favorable. Nonoil growth will remain slightly above 5% in 2014 and 2015, led by the.

Rebounding industrial production, exports and business sentiment suggest that the recovery has gained momentum this year. The near-term outlook has im.

The sharp increase in residential sales prices in the UAE has revived concerns that another real estate bubble could be emerging. The IIF's analysis s.

Following a decade of impressive growth propelled by high commodity prices, ample global liquidity and a credible macroeconomic policy framework, the.

Nigeria is now the largest economy in Africa in nominal $ GDP following the rebasing of its national income accounts. The rebasing revealed a more div.

The economy turned up in 2013, but remains subdued by structural impediments such as over-reliance on exports, public sector inefficiencies, excessive.

Growth has recovered thanks to resurgent exports, but it is likely to remain modest at around 2-3% in the near term, constrained by lingering structur.

The smooth transition to more democratic rule is improving economic prospects and growth is expected to accelerate in 2014, driven by rising investmen.

Following below-trend economic growth in 2013, the economy is poised for a strong rebound this year and next propelled by expansionary policies, a str.

Greece and the troika have been unable in three attempts to complete the fifth review of the EU-IMF program. Progress is evident but red lines remain.

South Africa's budget was drawn up in a particularly challenging macroeconomic environment against a background of intensified global financial market.

The government is persevering with measures to mitigate vulnerabilities and put the economy on a firmer macroeconomic footing. Monetary policy is bein.

Brazil is entering its fourth consecutive year of below-trend economic growth. Tightening global financing conditions find the country with a strong e.

Kenya looks set to enter a phase of higher growth and smaller deficits, but many challenges and risks remain. Reforms under the recently completed IMF.

Download PDF (204.59 KB) IIF Authors Z. Elif Aksoy.

Download PDF (177.09 KB) IIF Authors Z. Elif Aksoy.

The dramatic events that led to the formation of a new reformist majority in parliament have provided a second chance for Ukraine's battered economy.

University students-led protests have escalated challenging the administration of President Nicol s Maduro. Social unrest is being fueled by rampant.

The escalation of the political tensions into a full-blown violent conflict has caused the near-term outlook to deteriorate sharply. Policy inaction h.

Debt markets in the Euro Area periphery have been buoyant this year thanks to recovery and some reversal of the financial market fragmentation trigger.

Supported by stronger foreign demand, improving confidence and accommodative policies, output growth is likely to extend the strong momentum from late.

South Africa, like other emerging market countries, is experiencing a new set of global headwinds as financial markets adjust to the start of Fed tape.

Download PDF (332.02 KB) IIF Authors.

Chinese banks have established a growing presence in international lending, both to support Chinese domestic firms abroad, and to move into areas such.

Download PDF (441.84 KB) IIF Authors Emre Tiftik.

Download PDF (358.54 KB) IIF Au.

Ample supplies will trump revived demand in 2014 creating a looser market based on fundamentals. Non-OECD oil demand is expected to drive the total gl.

Peace negotiations between the government and the FARC have gained momentum following agreement on rural development and political participation, ther.

The worsening of the security situation and spillover from the Syrian crisis depressed growth to 0.9% and widened the fiscal deficit to 11% of GDP in.

The worsening of the security situation and spillover from the Syrian crisis depressed growth to 0.9% and widened the fiscal deficit to 11% of GDP in.

Increasing fiscal deficit monetization has fueled inflation, eroded international reserves and deteriorated the central bank's balance sheet. The gove.

Politics have taken a turn for the worse to precipitate a drop in the baht, slippage in the stock market and further slowdown in economic activity. Ad.

Even though the external environment has improved markedly for Emerging Europe, recent performance and the near-term outlook have become increasingly.

Download PDF (387.2 KB) IIF Authors Emre Tif.

Download PDF (493.09 KB) IIF Authors Emre Tifti.

Ukraine has avoided a looming default by accepting a $20' billion bailout from Russia. With no explicit policy conditions, the bailout should enable t.

The additional sanctions imposed by the U.S. and the EU in the past year have caused severe damage to an economy already suffering from the cumulative.

Policy mismanagement in the context of stabilizing oil prices has exposed Venezuela's deep macroeconomic imbalances. Seeking to restart growth, the go.

The near-term growth outlook has improved due to markedly expansionary policies. Sharp fiscal tightening last year and record low inflation leave scop.

Inflexible economic policies have caused the recession to deepen and macroeconomic imbalances to swell as financing pressures have intensified with ac.

Chile stands at a turning point as it goes into presidential elections on November 17, 2013. Well-designed policies to address income inequality could.

The limitations of dependence on commodity exports and domestic credit growth were evident in acute external pressures over the summer, exacerbated by.

This research note looks at banking systems in 10 leading Emerging Market economies, gauging their inner strengths and their ability to raise the capi.

Peru has weathered well the increased global financial volatility over the last few months. However, growth has softened below-trend under the weight.

Progress has been made at the national level reducing fiscal and external deficits, improving competitiveness and stabilizing activity. Progress has a.

Emerging markets are experiencing a broad-based slowing of growth which contrasts with the gradual pick-up of advanced economy growth momentum. This w.

Emerging markets are experiencing a broad-based slowing of growth which contrasts with the gradual pick-up of advanced economy growth momentum. This w.

The financial sector has remained resilient, including to the recent financial turmoil in the Euro Area. Progress has been made in adopting internatio.

Sound policies have allowed Mexico to weather increased global volatility and provide policy support to the economy. We forecast real GDP growth to ac.

Policy has responded aggressively to currency pressures to stem depreciation of the real and contain inflation. Monetary policy has been further tight.

Financial market pressures have intensified in Poland recently despite a much-improved economic outlook. Real GDP is likely to grow by 2% by the end o.

Tanzania has gained access to international markets, but rising reliance on nonconcessional funding with a persistent deficit raises concerns. In the.

The five years since the global financial crisis has witnessed a striking divergence in performance between advanced economies and the emerging market.

President Nicol s Maduro is struggling to boost growth and stem inflation. With very limited policy scope, we expect the government to devalue the bo.

The good news: Euro Area unemployment fell for the first time in two years in June-July. The bad news: Unemployment is likely to decline only very gra.

Despite its substantial oil wealth, Nigeria has recorded federal budget deficits for the past four years. Our projections suggest that the deficit wil.

The U.S. Court of Appeals has reaffirmed the verdict of a lower court regarding payment to holdout creditors. It has, however, stayed its ruling pendi.

Large macroeconomic imbalances and increased political tensions have left Turkey among the hardest hit emerging markets as global market sentiment wor.

The turmoil in the region has aggravated the twin deficits in 2012. The removal of fuel subsidies combined with a surge in grants will narrow the fisc.

Economic activity is expected to recover gradually in 2013 and 2014, helped by sizable multilateral and bilateral support in the form of loans and gra.

After May's narrow election victory, the government is likely to target greater fiscal adjustment in the upcoming budget for 2014, while monetary poli.

Real GDP growth should remain buoyant, at around 8% in 2013 and 2014. Strong FDI inflows are likely to continue over the medium term. Offshore gas pro.

With sharply reduced external imbalances likely to be sustained and government deficit set to remain less than 3% of GDP, near-term risks appear well.

Real GDP growth recovered in the second quarter and short-term indicators suggest further firming in the third quarter. Domestic demand remains very w.

Authorities have taken advantage of relatively robust growth and rising oil revenues to strengthen the fiscal framework. The 2011 structural fiscal ru.

Growth is expected to accelerate from 2.8% in 2012 to 4.4% in 2013 driven by a strong rebound in agricultural output. Nonagricultural growth slowed to.

With the fiscal deficit set to widen to 4.5% of GDP this year, the government has proposed another downsizing of the funded pension pillar. The propos.

The restoration of macroeconomic balance has helped insulate domestic conditions from recurring global financial turmoil and volatile capital flows. T.

Confidence has weakened under the weight of sluggish growth, increased political uncertainty and policy inconsistency. Confidence erosion augurs that.

Real GDP growth stalled in 2013, alongside high inflation, and a narrowing current account surplus, suggesting that the economy is operating near its.

Popular discontent with the political establishment has increased pressure to reform the electoral system. Both the government and opposition have adv.

Draconian controls on foreign exchange outflows have failed to ease strains on external accounts. International reserves have declined and underlying.

The belated hike in administered domestic fuel prices and monetary tightening should help foster the correction of macroeconomic imbalances and bolste.

Risks of a sudden outflow appear contained at present given still high nominal forint yields, the prevalence of a few large institutional investors an.

The government sought to attract large capital flows to provide time for the twin deficits to adjust at a gradual pace, but the strategy came unstuck.

The fiscal deficit narrowed to 3.1% of GDP in 2012 with a rebound in economic activity boosting revenue. C te d'Ivoire will continue to run small and.

Robust growth, a sizable current account surplus that is anchoring a stable exchange rate, and high yields have attracted foreign investors to Nigeria.

Social protests have coincided with higher U.S. Treasury yields, increasing pressure on policymaking already struggling to revive growth and rein in i.

Terms of trade losses and higher U.S. Treasury yields have taken a toll on growth momentum. However, policy prudence in the years of the commodity boo.

Diminished sensitivity of the banking system to changes in global liquidity conditions has helped limit the impact of the latest bout of global financ.

The current macroeconomic performance and near-term outlook remain favorable. Nonhydrocarbon real GDP growth is expected at 4.5% and the external and.

Improved financing conditions have led the government to leave its macroeconomic policies unchanged, despite the deepening recession and excessively h.

The sharp global market reversal over the past month is positive for the economy by taking the froth out of the financial markets. While pressure is o.

Concerns about the possible winding down of monetary accommodation in the U.S. had already brought the lira and Turkish asset prices under downward pr.

Downside risks predominate in the Euro Area periphery. Slack order books, substantial unused capacity and rising unemployment continue to dampen senti.

Prior to the recent shift in market sentiment, abundant liquidity and renewed efforts by the ECB to support growth (including a rate cut on May 2) had.

Nonhydrocarbon growth is expected to remain robust. The increased total factor productivity in recent years reflected the efficiency gains from the im.

After going through a soft patch, the economy appears to be gradually gaining momentum driven by monetary easing, fiscal stimulus and a depreciation o.

Growth rebounded last year and will remain strong in 2013 and 2014, close to 8%. Increasing the investment rate will be essential to make high growth.

After several decades of significant progress, Chile's path forward will require tackling head-on politically-sensitive structural reforms (education.

U.S. households hold close to half of their financial assets in equities compared to around one-fifth in the Euro Area and less than one-tenth in Japa.

In 2012, Qatar ended a six-year period in which real GDP growth was in double digits. LNG production has capped out at capacity, inducing stagnation i.

Growing market fears that slowing economic growth amidst abundant liquidity presents a threat to financial stability and risks triggering a hard landi.

The economic slowdown, restrictions on IPOs and tougher regulations have curbed private equity activity. While the recent downswing will run its cours.

Kuwait continues to generate record fiscal and current account surpluses, driven by the hydrocarbon sector. This in turn has led to larger increases i.

Investor-friendly measures and greater global appetite have precipitated a surge in foreign purchases of domestic stocks and bonds. The economy will b.

Following decades of an energy sector controlled by the state, we remain confident that the Pe a Nieto administration will be able to secure politica.

A low ratio of investment to GDP is weighing on trend growth. Despite lower interest rates, investors remain in a cautious, wait-and-see mode amid hei.

Slow growth, low inflation and weak external demand finally prompted the central bank to cut the policy rate after a seven-month hiatus. The latest mo.

The fiscal breakeven oil price increased further to $130/b in 2012, driven by a decline in hydrocarbon output and a large increase in public spending.

A new parliament that is less antagonistic toward the government has raised hopes for progress on the development plan. This will boost the nonhydroca.

The reinstatement of the ambitious railway investment program in mid-2012 after the crash of a high-speed passenger train and the resolution of public.

High oil prices and an increase in production pushed the budget surplus up to an estimated 4.2% of GDP in 2012. Expenditure has risen sharply over the.

An increase in oil and gas production and robust activity in the nonhydrocarbon sector pushed growth to an estimated 7.1% in 2012. The biggest challen.

Although tarnished by opposition allegations of electoral irregularities, as well as the failure to secure a majority of the popular vote, the recent.

President Nicol s Maduro faces the daunting task of addressing rapidly growing fiscal challenges while avoiding political upheaval stemming from the.

Nonhydrocarbon growth remained strong, supported by government spending. Hydrocarbon output is expected to continue declining at least until 2015. Str.

The return to trend growth and supportive policies leave the Barisan Nasional (BN) government of Prime Minister Najib Razak well placed to win the clo.

Broad political consensus has enabled President Enrique Pe a Nieto to make substantial and rapid progress on reform implementation, auguring higher t.

Subdued domestic demand, falling commodity prices and improving agricultural supply are contributing to a decline in the high inflation rate. The cent.

The policy response to quantitative easing in mature economies has, thus far, relied heavily on the floating exchange regime and heightened fiscal res.

Hopes are high that the new Japanese economic policy will finally end deflation. In the short-term, forceful monetary and fiscal stimulus will support.

External and fiscal deficits widen, driven by higher imports and large increases in current government spending, respectively. We expect both deficits.

A new coalition government was formed in March. Tunisia's political transition by end-2013 hinges on agreement on a constitution followed by general e.

A rising ratio of current primary spending to GDP, driven by rigid spending items such as salaries and entitlements, has narrowed fiscal policy flexib.

Banking issues differ greatly from Cyprus, with Slovenian bank assets only one-third the EU average of 3.5 times GDP. The largest banks are state-owne.

The government's renewed commitment to containing the large fiscal imbalance is underscored by stepped-up spending restraint since September, although.

The March 24 agreement with the Troika put an end to a prolonged period of uncertainty, but is likely to have a lasting adverse effect on the economy.

After a week of messy negotiations and flawed proposals, default and devaluation were avoided in Cyprus. Looking ahead, it remains to be seen whether.

This note sheds light on the circumstances that have led to the current crisis and the vulnerabilities related to public finances and domestic banks.

The five-fold increase in the size of the domestic bond market during the past decade underscores the enormous potential for the capital market, but f.

The regional turmoil has imposed substantial costs on the Jordanian economy, which we attempt to estimate. Our results show that in the absence of the.

Even as headline inflation slowed and real GDP growth softened, the central bank was reluctant to cut interest rates until late 2012, emphasizing its.

Three years into Europe's crisis, and with output falling in Italy, Spain and Portugal, the different experiences of Ireland and Greece are instructiv.

Subsidies have become a pressing problem in the current context of the emergence of an external constraint for the first time in more than a decade. I.

The honeymoon most newly-elected candidates enjoy on first taking office has eluded President Park Geun-hye. Financial markets are taking the latest d.

Political uncertainty in Syria continues to pose a major threat to Lebanon's political order and economic stability. Growth decelerated to 0.6% and th.

Market sentiment remains volatile in light of the uncertainty surrounding the final verdict on litigation with holdout creditors. While the appeals co.

External financing needs look set to increase with the current account shortfall likely to widen through 2014. Heavy reliance on short-term capital in.

The Ukrainian economy is on a very volatile path. Real GDP growth slumped in 2012 but the aggressively expansionary fiscal policy fueled a consumption.

Inflation has moderated due to easing food and energy prices, but is still above target. Core inflation remains sticky at around 8-9%. Activity is rob.

The government is persevering with its generous rice price-support program. Falling exports, rising stocks and large fiscal costs suggest that the gov.

President Rafael Correa has won reelection and secured a commanding legislative majority. Correa's tighter grip on power increases the likelihood of a.

Last year's boost in public expenditures helped spur domestic demand and revive the economy. The ability to use the budget as a discretionary policy t.

Ahead of the February 24-25 elections, opinion polls show tightened margins among the four main political groupings and a senate majority in doubt. Un.

Despite high growth rates over the past decade, poverty, inequality and unemployment remain high. In order to achieve higher and more inclusive growth.

The large current account deficit along with easy monetary conditions, rising energy subsidies and recent trade and investment policy missteps brought.

Despite Nigeria's hydrocarbon wealth and robust growth over the past decade, unemployment is high, governance poor, and poverty widespread. Human deve.

An agreement between Ireland's government and central bank replaces high-interest amortizing promissory notes with lower interest floating rate bonds.

Currency appreciation pressures have intensified, reflecting the country's strong growth prospects and a reduction in global risk aversion. Seeking to.

The oil market will continue to be well-supplied in 2013 as production capacity, especially outside of OPEC, will grow faster than demand, which will.

The domestic stock market is distinguished from the rest of the region and most of the world by its poor performance so far this year. The fundamental.

Bulgaria has weathered the Euro Area sovereign debt crisis well, with external imbalances reducing markedly and the fiscal deficit narrowing on the ba.

Fiscal measures boosting public infrastructure investment, an easing in monetary policy and an upturn in exports helped stabilize growth during 2012.

While state and local government debt is still low by international standards, a rapid increase in the last few years is a development worth watching.

The new government has adopted a more expansionary fiscal stance, but the laudable objective of increasing investment spending relative to current exp.

A revival of reforms curbing subsidies, reinstating fiscal adjustment and attracting investment is lifting the economy, bolstering financial markets a.

Iraq's economy grew at an exceptionally high rate of 11% of GDP in 2012, driven by oil output, which rose to record levels. Oil revenue also provided.

Despite signs of a tenuous stabilization of the housing market, mortgage arrears have continued to increase, and forbearance has done little to resolv.

With inflation converging to a demanding target of 2% (' 1%), real GDP is on track to grow about 6% this year driven by strong investment. While prese.

Judging from the evolution of key financial variables, there has been steady progress in helping resolve the Euro Area debt crisis in recent months. F.

ECB efforts to reduce the redenomination risk in the Euro Area have met with success in Spain. Net foreign purchases of Spanish government securities.

The shooting deaths at the Marikana platinum mine last August grabbed international attention and raised questions about the progress made in addressi.