Bussière, Matthieu, Giovanni Callegari, Fabio Ghironi, Giulia Sestieri, and Norihiko Yamano. First, the portfolio-rebalancing effects of its asset purchases could be strengthened by increasing the share of private assets in purchases and extending the program to longer-maturity government bonds. Advanced economies are generally benefiting from lower oil prices. These increases are indicative of greater divergence in views about underlying prospects—clearly affected by substantial surprises in both variables during the past year. Bank credit growth has continued to slow, although it remains rapid in some economies. To some extent, the United States has the policy room to offset the adverse effects of the dollar appreciation. As shown in Chapter 3, potential growth in advanced economies was already declining before the crisis.
Emerging Market and Developing Economies Growth in emerging market economies has fallen short of expectations during the past few years after a decade of very rapid growth. Since Krylov methods can suffer from slow convergence, one can modify the original linear system in order to improve convergence properties. The main reasons are aging populations and the gradual increase in capital growth from current rates as output and investment recover from the crisis. High real debt burdens, impaired balance sheets, high unemployment, and investor pessimism about prospects for a robust recovery will continue to weigh on demand. Oil Production and Operating Costs by Country Scenario Figure 1.
The need for data standards was highlighted by the financial crises of the mid-1990s, in which information deficiencies were seen to play a role. Disruptions in energy and other commodity markets remain a particular concern, given the possibility of sharp price spikes, which, depending on their duration, could substantially lower real incomes and demand in importers. Asian emerging markets whose firms borrowed heavily in U. This version of the Guide supersedes the version of June 2007. Some countries view the manuals as universal compilation manuals i. Risks to potential growth stem from two sources.
And for those oil exporters with limited buffers, fiscal adjustment will be both inevitable and urgent. Navigating the Risks Posed by Lower Commodity Prices in Low-Income Countries Growth in low-income countries as a group has stayed high while growth in advanced and emerging market economies has weakened. There may be disagreements about the chosen price baskets and representative samples, but these are not readily apparent in the different databases. The boost to exports associated with currency depreciation is found to be largest in countries with initial economic slack and with domestic financial systems that are operating normally. In this paper perturbative expansions are used to solve the model instead of numerical dynamic programming. Country and Regional Perspectives 45 The United States and Canada: A Solid Recovery Europe Asia and Pacific: Moderating but Still Outperforming Other Regions Latin America and the Caribbean: Another Year of Subpar Growth Commonwealth of Independent States: Oil Price Slump Worsens Outlook The Middle East, North Africa, Afghanistan, and Pakistan: Oil, Conflicts, and Transitions Sub-Saharan Africa: Resilience in the Face of Headwinds Chapter 3. Identifying the shocks underlying the decline is challenging.
Some countries suffer from legacies, others do not. In subsequent years the effect of lower oil prices is expected to be phased out, but this effect is projected to be offset by a gradual decline in underlying inflation toward medium-term inflation targets. Further decomposition of global trade into components—manufacturing goods, commodities, and serωG,t ln Gt + ωI,t ln It + ωX,t ln Xt , in which ω is the weight capturing the import content of the corresponding component of final demand expenditure. In addition, oil demand could be somewhat higher with stronger economic growth after the oil price decline in 2014. Instead, a positive shock to inventory demand explains much of the observed actual increase in oil prices in the second quarter of 2014, plausibly as a result of increased geopolitical tensions in the Middle East and elsewhere at the time. In addition to macroeconomic policies to address protracted low demand, priorities include fewer tax disincentives to employment, among them lowering the labor tax wedge, as well as better-targeted training programs and active labor market policies. Data for Lithuania are not included in the euro area aggregates because Eurostat has not fully released the consolidated data for the group.
Please refer to Table G in the Statistical Appendix, which lists the latest actual outturns for the indicators in the national accounts, prices, government finance, and balance of payments indicators for each country. Indonesia and Vietnam are excluded because of data lags. Summary of Net Lending and Borrowing Table A15. Selected Euro Area Economies: Accelerator Model—Role of Financial Constraints and Policy Uncertainty Figure 4. Investment and exports tend to have high import components, so weaker demand for those elements of expenditure may lead to weaker demand for imports.
Priorities vary, but many of these economies would benefit from reforms to strengthen labor force participation and trend employment, given aging populations, as well as measures to tackle private debt overhang. Middle East, North Africa, Afghanistan, and Pakistan: Oil, Conflicts, and Transitions Figure 2. Add to this a couple of idiosyncratic developments, such as the economic troubles in Russia or the weakness of Brazil. Specifically, growth is expected to increase from 0. Second, more forecast-oriented monetary policy communication would increase the transparency of its assessment of inflation prospects and signal its com24 International Monetary Fund April 2015 mitment to the inflation target, mainly through the discussion of envisaged policy changes if inflation is not on track. Near-term growth risks in China: Investment growth slowed in China in 2014, including in the real estate sector, after a boom in 2009—12. Policies need to focus on bolstering economic stability and, where needed, short-term support to ailing economic growth.
In debtor economies, these changes would strengthen external competitiveness and help sustain gains in external adjustment while economies recover, whereas in creditor economies, they would primarily strengthen investment and employment. Alternative formulations of Levene's test statistic for equality of variances are found to be robust under nonnormality. Results from a simple panel distributed-lag regression including oil production as a dependent variable and oil investment as an explanatory variable suggest that a 1 percent reduction in investment is associated with a 0. Assessment of Source Data 3. Drivers of Oil Prices: Daily TwoVariable Model, 1986 and 2008 Cumulative change in log oil prices in percent 1.
After the peak of the financial crisis in 2008, the annual growth rate of equity holdings has exceeded substantially that for debt securities holdings. The evolution of global break-even prices—oil prices at which it becomes worthwhile to extract—shows that prices during the 2000s were hovering well above breakeven prices until the recent slump, when it became unprofitable for some fields to operate Figure 1. Such reforms are particularly relevant in the context of the ongoing economic and financial crisis, which once again underscores the role of statistics in guiding policymakers to strengthen defenses against future crises. More generally, risk spreads have risen and currencies have depreciated in a number of commodity exporters, and risk spreads on high-yield bonds and other products exposed to energy prices have also widened. For households, higher real debt service costs could crimp consumption spending.
Recent dollar appreciation largely reflects changing fundamentals and policies, as discussed earlier, including relative domestic demand strength, expected monetary policy divergence among major advanced economies, and changing external positions with lower oil prices. In Papua New Guinea, the coming on stream of a large natural gas project will provide a one-time boost to growth. National definitions of unemployment may differ. But it is safe to assume that reducing the discrepancies in the data and reporting better metadata will reduce reputational risk. Targeted macroprudential policies would help address high housing sector vulnerabilities. The Bank of Canada took preemptive action and cut its policy rate by 25 basis points in January as insurance against adverse effects of the oil price shock on the economy. Long-term interest rates have further declined, mainly reflecting weaker external conditions, excess demand for safe assets, and expectations of future dollar strength.