imf,update

Dear MARIA, In today's edition, we highlight: The IMF at COP29 How property taxes can help low-income countries develop Growth in sub-Saharan Africa is diverging 25th Jacques Polak Annual Research Conference Branko Milanović on tackling inequality in Africa, and much more CLIMATE CHANGE The IMF at COP29 The IMF joined global leaders and innovators in Baku, Azerbaijan this week to kick off COP29. The Fund's Managing Director Kristalina Georgieva participated in a panel on unlocking financing for the green transition alongside World Bank President Ajay Banga.  In her remarks, the Managing Director noted the importance of effective policies in moving the needle. “The most important is good policies. If you have good policies, you attract more foreign direct investment,” she said. She also spoke of the “unprecedented cooperation” on a global level taking place on climate change. “There is a dramatic improvement in the way we work together...Why is this happening? Because of the urgency of what needs to be done.” Georgieva also met with leaders including Azerbaijan President Ilham Aliyev and U.K. Prime Minister Keir Starmer, emphasizing collaborative action in climate financing. The Fund's Deputy Managing Director Bo Li contributed to discussions on scaling up climate financing.  A number of other events with Fund participation have taken place, on topics including the global climate ambition gap, the potential impact of a carbon tax on aviation and shipping, and the role of the Bretton Woods institutions. Learn More TAX POLICY How Property Taxes Can Help Low-Income Countries to Develop (Credit: vuk8691/iStock by Getty Images) The world’s governments must raise an additional $3 trillion to achieve sustainable and inclusive economic growth goals this decade. The cost in emerging markets equals 4 percent of gross domestic product—and 16 percent for low-income countries, write the IMF’s Martin Grote, Mario Mansour, and Jean-François Wen in a new blog. How can countries finance such staggering price tags? Large cities such as Delhi and Lagos show a way forward: Taxing property more efficiently can play a meaningful role in raising revenue at the local level, allowing countries to invest more in their people, new IMF analysis shows. Previous IMF research has shown that countries have ample potential to raise more domestic tax revenue if they need it—up to 5 percentage points of GDP over two decades, the authors note. Read the Blog COUNTRY FOCUS Growth in Sub-Saharan Africa is Diverging (Credit: IMF Photo/Andrew Caballero-Reynolds) Over the past ten years, growth in sub-Saharan Africa’s resource-intensive countries (RICs)—and especially in fuel exporting economies such as Angola, Chad, and Nigeria—has slowed down sharply, falling far below growth in non-RICs (such as Ethiopia, Rwanda, and Senegal). Indeed, incomes in RICs have essentially stagnated. This marks a sharp contrast with the decade leading up to 2014, when RICs experienced rapid growth, in line with the region’s strong overall performance. In an IMF Country Focus article, the IMF’s Saad Quayyum, Nikola Spatafora, Sanghamitra Mukherjee and Hamza Mighri explain what’s behind this divergence and explore how policymakers can reignite durable growth. Read the Article IMF RESEARCH Jacques Polak Annual Research Conference Underway The 25th Jacques Polak Annual Research Conference: Rethinking the Policy Toolkit in a Turbulent Global Economy is currently underway at the IMF. This year’s conference will delve into the nuanced priorities for central banks and fiscal authorities across the world. “The profound shocks of COVID and war have left us with inflation and fragmentation, even as we need economic growth to address challenges from poverty to climate change, said IMF Managing Director Kristalina Georgieva in her opening remarks at the conference. “Yet the growth outlook, while stabilizing, remains much lower than pre-pandemic. Inflation has declined, but not been fully defeated. And elevated debt levels constrain fiscal space, especially in countries that most need to spend to educate their young populations, build infrastructure, and increase their climate resilience. This conference will focus on how to address these and other challenges," she said. Watch Here AFRICA PERSPECTIVES Branko Milanović on Tackling Inequality In the latest Africa Perspectives episode, Professor Branko Milanović, senior scholar at the Stone Center on Socio-Economic Inequality of the City University of New York, and Abebe Aemro Selassie, Director of the IMF African Department discuss practical strategies African policymakers can use to tackle inequality and how the IMF can support these efforts.  Watch Here With sub-Saharan Africa soon to have one of the largest working-age populations in the world, removing barriers to business growth and encouraging higher productivity industries will help provide the employment opportunities it needs. But reforms don’t come easy. Wenjie Chen and Andrew Tiffin are economists in the IMF’s Africa Department and produce the Regional Economic Outlook for sub-Saharan Africa. In this podcast, they say addressing development needs while realizing reforms that create sufficient jobs will help garner public support and improve regional prospects.  As the rest of the world grapples with aging populations, Africa’s population is booming. By 2030, half of all new entrants into the global labor force will come from sub-Saharan Africa, requiring the creation of up to 15 million new jobs annually. This challenge is particularly acute in fragile, conflict-affected, and low-income economies. They account for nearly 80 percent of the region’s annual job creation needs, but to date have struggled the most to create jobs. In our chart of the week blog, the IMF’s Athene Laws, Faten Saliba, Can Sever, and Luc Tucker explore the scale of this challenge, and suggest ways that policymakers can respond. Read the COTW Weekly Roundup   IMF CLIMATE RESARCH IMF Staff Climate Notes IMF Staff Climate Notes provide analysis related to the impact of climate change on macroeconomic and financial stability, including policies related to mitigation, adaptation, and the green transition. Additional IMF research on climate change issues and the environment can be found in our Climate Change Essential Reading Guide on the eLibrary. eLibrary Essential Reading Guides are curated lists of key publications focusing on specific subject areas that help researchers get a quick search on their research in these areas. REGIONAL ECONOMIC OUTLOOK NOTE Europe's Declining Productivity Europe’s large per capita income gap with the United States primarily reflects a rising productivity shortfall with deep firm-level roots. Compared to those in the United States, Europe’s large leading firms innovate and grow less, while young high-growth firms have a smaller footprint in the economy. With these productivity growth engines being muted, Europe also suffers from an overabundance of stagnant mature firms. This new Regional Economic Outlook note highlights the roles of smaller markets and limited equity financing as bottlenecks holding back Europe’s large leading firms from scaling up and innovating. MARK YOUR CALENDAR NOVEMBER 18, 2024, 9:30 AM ET Transforming Industries for Growth in a Fragmented World This event will elaborate on policy options to tackle barriers to diversification, including both broad-based and industrial policies. Speakers include Aleksi Aleksishvili, CEO of PMCG; Daouda Sembene, CEO of AfriCatalyst, and the IMF's Chris Papageorgiou. Watch Here NOVEMBER 20-21, 9:00 AM ET 12th IMF Statistical Forum At the 12th IMF Statistical Forum, Measuring the Implications of AI on the Economy, policymakers, researchers, the private sector, and regulators will come together to discuss cutting-edge issues in macroeconomic and financial statistics and to build support for statistical improvements. The two-day forum will feature speakers including the IMF's Managing Director Kristalina Georgieva, First Deputy Managing Director Gita Gopinath, Deputy Managing Director Bo Li, and Chief Statistician Bert Kroese, as well as Google’s Senior Director David Weller and Stanford University Professor Susan Athey. Find the full agenda and RSVP here. The opening and closing sessions will be live-streamed. Learn More Thank you again very much for your interest in the Weekend Read! Be sure to let us know what issues and trends we should have on our radar. Miriam Van Dyck Editor IMF Weekend Read mvandyck@IMF.org

Dear MARIA, We just published a new blog—please find the full text below.  New European Wealth Gauge Helps Policymakers Address Inequality (Credit: IMF Photo/Oliver Bunic) By Henning Ahnert, Francien Berry, Darja Milic, and Jorrit Zwijnenburg Economists monitor income disparities because they can harden into more structural wealth inequalities that concern policymakers. Wider wealth gaps may also impact monetary policy transmission and financial stability. Accordingly, the European System of Central Banks developed new experimental Distributional Wealth Accounts for the euro area and most European Union countries. Combining wealth information drawn from household surveys with broader economic indicators, the new data offer an integrated picture of wealth across groups that match national accounts figures. This year’s release also marked a significant advance in addressing the Group of Twenty’s recommendation on household wealth results, as part of the third phase of the Data Gaps Initiative, a G20-led partnership involving the IMF, the Inter-Agency Group on Economic and Financial statistics, the Financial Stability Board, and statistical authorities, working to enhance economic and financial data quality worldwide. As the Chart of the Week shows, net wealth in the euro area rose 27 percent over the past five years—accompanied by a slight decrease in inequality, partly because homeowners benefited from increasing housing prices. The share of wealth held by the top 10 percent stood at 56 percent in the fourth quarter of 2023, while the bottom half held just 5 percent. By comparison, the top 10 percent on a global basis holds about three-quarters of total wealth, according to the World Inequality Lab. These Distributional Wealth Accounts far surpass the scope of standard distribution data. They are crucial because they detail not only who owns what—from real estate to savings—but they also align these figures with the broader economic metrics of an entire country. This integration provides more timely estimates and allows for a deeper understanding of how wealth distribution interacts with overall economic health. Moreover, maintaining consistency across different countries enables more meaningful comparisons and informed policymaking. Essentially, these accounts provide policymakers with a clearer, richer picture of economic trends, helping to tailor policies that address inequality and promote economic fairness. The G20’s recommendation will broaden this kind of analysis beyond Europe. Thirty-three countries, including 13 in the G20, have joined a new expert group convened by the Organisation for Economic Co-operation and Development to collaborate and develop internationally harmonized wealth distribution estimates. These would complement existing data on income, consumption, and saving, providing a unique and consistent picture of economic inequality across countries. Harnessing household distributional data helps policymakers foster economic growth that benefits all, and better understand how their policies affect people. And that in turn lays the groundwork for crafting more equitable policies in the future. —This blog is by Francien Berry and Darja Milic, economists in the IMF Statistics Department, Henning Ahnert, the European Central Bank’s head of financial accounts and fiscal statistics, and Jorrit Zwijnenburg, the acting head of national accounts at the OECD. Jeff Kearns Managing Editor IMF Blog jkearns@IMF.org   Thank you again for your interest in IMF Blog. Read more of our latest content here.

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