ΙΜF,weekend read...

 

Dear MARIA,   In today's edition, we highlight: Gita Gopinath at the G20 meeting in South Africa Country Focus: Mauritius The debate over falling fertility in F&D magazine Podcast: Stefanie Stantcheva on thoughts that matter G20 Gita Gopinath at the G20 Meeting in South Africa (Credit: IMF Photo) IMF First Deputy Managing Director Gita Gopinath delivered remarks at the G20 Finance Ministers and Central Bank Governors meeting in KwaZulu-Natal, South Africa. She acknowledged the high levels of policy uncertainty but emphasized the collective objective to spur growth.   In the global outlook, the IMF's April forecast projected a global growth of 2.8% in 2025 and 3.0% in 2026, which is below the historical average. Significant downgrades were noted for major economies like the U.S. and China, driven by policy uncertainty, trade tensions, and softer demand. Global headline inflation is expected to decline to 4.3% in 2025 and 3.6% in 2026, she noted.   Recent economic indicators show a complex backdrop due to trade tensions, some front-loading before tariff increases, trade diversion, and improved global financial conditions due to selected trade deals. Cooling demand and falling energy prices are contributing to the decline in inflation, though variations exist across countries.   While an updated global forecast will be provided at the end of July, downside risks remain prominent, and uncertainty is high. The focus on policy priorities is on building resilience and boosting medium-term growth, she said. Read the Remarks COUNTRY FOCUS Mauritius' Economy Depends on Sustainable Public Finances (Credit: Dmitry_Chulov, steve goacher & AbdulKarim/iStock by Getty Images) The island of Mauritius was once the native habitat of the dodo—a striking, flightless bird that went extinct in the face of unsustainable practices. Today, the dodo is a national symbol for the country, representing the importance of conservation and sustainability efforts. The country has made a remarkable journey from an agricultural economy to a diversified upper-middle-income country. But new challenges have emerged: high public debt, rising public investment needs, low productivity, and an ageing society are straining the economy.   To stay on a sustainable course toward inclusive economic prosperity, Mauritius will need to recalibrate its fiscal policy, write the IMF’s Mariana Colacelli and Felix Simione in a new Country Focus article, based on findings from the Fund’s latest annual economic health check of Mauritius. They write that boosting revenue mobilization, reforming the country’s pension system, and spending more efficiently will help the country achieve sustainable fiscal policy. Read the Article F&D MAGAZINE The Debate Over Falling Fertility (Credit: Hadley Hooper) Global fertility rates have been falling for decades and are reaching historically low levels. While the human population now exceeds 8 billion and may top 10 billion by 2050, the momentum of growth is dissipating because of declines in its most powerful driver—fertility. Over the next 25 years, East Asia, Europe, and Russia will experience significant population declines.   What this will mean for the future of humanity is rather ambiguous, David E. Bloom, Michael Kuhn, and Klaus Prettner write in F&D. On one hand, it could hinder economic progress as there will be fewer workers, scientists, and innovators. On the other hand, fewer children and smaller populations will mean less need for spending on housing and childcare, freeing resources for other uses such as research and development and adoption of advanced technologies.   Clearly, policymakers face crucial choices in managing the unfolding demographic trends. Responses may include measures to encourage fertility, adjustments to migration policies, expansion of education, and efforts to encourage innovation, the authors say.   “Together with advances in digitalization, automation, and artificial intelligence, the coming declines in population pose a significant challenge but also a potential opportunity for the world’s economies.” Read the Article Public resistance to new policies often leaves policymakers scratching their heads. What seems a perfectly reasonable policy to a government is often perceived by its citizenry as regressive. Stefanie Stantcheva’s multidisciplinary approach to research digs deep into the minds of people at the receiving end to help design better policies. Stantcheva is a professor of economics at Harvard University, and this year’s recipient of the prestigious Clark Medal, awarded by the American Economic Association for the most significant contributions to economic thought by an economist under 40. She sat down with journalist Rhoda Metcalfe to discuss how tax policy impacts innovation for the IMF series on extraordinary Women in Economics. Listen to the podcast Thank you 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:       This email was sent to politikimx@gmail.com on behalf of: International Monetary Fund 1900 Pennsylvania Ave NW · Washington, DC · 20431