International Monetary Fund :Weekend Read

 

Dear MARIA,   In today's edition, we highlight: Georgieva on deepening the European Single Market Gopinath on lessons from Sri Lanka's recovery Europe's innovators are waking up G20 Data Gaps Initiative global conference Podcast on growth prospects in an aging world, and more EUROPE Georgieva on Deepening the European Single Market (Credit: IMF Photo) Across the globe, countries and regions are on the move, pushing toward higher competitiveness, more dynamism, and faster technological transformation. For Europe it is very simple: either act, or risk getting sidelined, said IMF Managing Director Kristalina Georgievain Luxembourg this week.   Addressing the Eurogroup Meeting, Georgieva warned that there is no time for delay. “Europe has defined a strategic agenda with single market integration at its core, yet also bringing in national reforms and a bolder vision for the EU budget. Today I will sum this up in a three-point approach—single market, national reforms, and the EU budget—where the strength of each piece rests on the strength of the others.” “Europe has all the assets it needs—the savings, the skills, and the technology,” Georgieva continued. “It falls to Europe’s policymakers to push—nationally, collectively, and decisively—to mobilize these assets to their full potential. The people want a Europe that creates high-value jobs, innovates, and generates cutting-edge products and services. They want opportunity. It is within reach,” she said, noting her confidence that this could be done, because Europe has done it before. Read the Managing Director’s remarks at the press conference following the Eurogroup meeting. Read the Speech SRI LANKA First Deputy Managing Director Gita Gopinath on Lessons from the Country's Recovery (Credit: Kim Haughton/IMF Photo) Sri Lanka has made remarkable progress in a very short time given the severity of the crisis the country experienced three years ago, said IMF First Deputy Managing Director Gita Gopinath in Colombo this week. Speaking at a conference organized by the IMF and the Central Bank of Sri Lanka, Gopinath urged the authorities to sustain the reform momentum in a manner that is inclusive and accountable. “Thanks to bold reforms and the commitment of the Sri Lankan people, substantial progress has been made to restore macroeconomic stability and reduce hardships faced by people. Fuel, cooking gas, and medicines are available again," said Gopinath. "Inflation has been brought under control and economic growth has returned—expanding by 5 percent in 2024. On the fiscal front, the government has achieved an extraordinary adjustment and tax revenues have increased by more than two-thirds as a share of GDP." The government has also put a strong emphasis on improving governance, which is fundamental for establishing trust with citizens and ensuring sustained growth, she noted. Important milestones have been achieved including central bank independence, improving public financial management, and strengthening the legal framework for anti-corruption. Sri Lanka also took the difficult but necessary decision to default on its public debt and pursue a sovereign debt restructuring, she said, noting that these decisive actions on debt have helped ease the burden on the country. Read the Speech F&D MAGAZINE Europe's Innovators are Waking Up (Credit: John Hersey) “The US innovates, China replicates, Europe regulates” is how critics summarize the continent’s approach to innovation. Exhibit A of the European Union’s regulatory overreach is the now infamous Artificial Intelligence Act, which governs AI—even though the region has not yet produced a single major player. Productivity in US technology firms has surged nearly 40 percent since 2005 while stagnating among European companies. US research and development spending as a share of sales is more than double what it is in Europe. No European company ranks among the 10 largest tech companies by market share. Yet reality, as usual, is more nuanced, according to Alessandro Merli, an associate fellow at the Johns Hopkins University School of Advanced International Studies Europe,writing in F&D. Europe’s innovation scene comes in various shapes and sizes. Many of its tech companies are now global household names: Spotify and the 'buy-now, pay-later' fintech firm Klarna, from Sweden, and the British digital bank Revolut. Skype, which owner Microsoft recently retired, was founded in London by four Estonians, a Dane, and a Swede. One of its first employees, Estonian Taavet Hinrikus, cofounded Wise, a money transfer company. “For the first time, the EU Commission has a commissioner dedicated only to start-ups, research, and innovation,” says Francesco Cerruti, director general of Italian Tech Alliance. “But there is a need for translating words into action. And fast.” Read the Article DATA TECHNOLOGY G20 Data Gaps Initiative Global Conference Over 130 officials from G20 and non-G20 economies, the IMF, and other international organizations gathered in Cape Town, South Africa, from June 17–19 for the G20 Data Gaps Initiative (DGI) Global Conference. The event highlighted the significant progress achieved under the third phase of the DGI in addressing critical data gaps. IMF Chief Statistician and head of the Statistics Department Bert Kroese highlighted the DGI’s pivotal role in equipping policymakers with timely and essential data since its inception in 2009, made possible through robust international collaboration. He also emphasized the importance of building on the initiative’s strategic value to produce timely, comparable, and policy-relevant data that meets the evolving needs of the global statistical system. Read More Most advanced economies are witnessing their populations age and labor forces shrink, and the same trend is expected to hold for the largest emerging economies within the decade. So the largely touted demographic dividend of previous decades is making way for a demographic drag. Diaa Noureldin is an economist in the World Economic Studies division in the IMF Research Department. In this podcast, he says healthy aging and policies that keep people in work longer could offset the demographic drag on growth.  Listen to the Podcast 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 Stay connected with the International Monetary Fund: