IMF Weekend Read

 

Dear MARIA,   In today's edition, we highlight: Georgieva: Opportunity in a Time of Change Good Policies (and Good Luck) Helped Resist Shocks Spending Smarter to Boost Growth Economic Uncertainty Can Test the Foreign Exchange Market Podcast: Swati Bhatt on Startups Explaining Strong Credit Growth in Brazil  GLOBAL ECONOMY Georgieva: Opportunity in a Time of Change “The average person today is much better off than, say, 30 years ago, but the averages conceal deep undercurrents of marginalization, discontent, and hardship,” said IMF Managing Director Kristalina Georgieva in her Curtain Raiser speech at the Milken Institute in Washington. How is the world economy coping? “Better than feared, but worse than we need,” she added. Uncertainty has shot up and continues to climb. Georgieva highlighted the sobering reality that global public debt is projected to exceed 100 percent of GDP by 2029, led by advanced and emerging market economies. She also stressed that in this “multi-polar world of rapid change, it is paramount that policymakers do much more to capture and deliver opportunity so they can meet the aspirations of their citizens, especially young people.” Read the Speech MONETARY POLICY Good Policies (and Good Luck) Helped Emerging Economies Better Resist Shocks Emerging market economies have held up remarkably well in recent years, even after periods of global financial turbulence. While favorable external conditions (in other words, good luck) often helped, it’s clear that good policies matter. The new World Economic Outlook shows that improved policy frameworks contributed to smaller output losses and lower inflation. Yet risks remain: external conditions can quickly deteriorate, recent global shocks have eroded fiscal space, the post-pandemic inflation surge has pushed up inflation expectations, and political pressures could undermine hard-won credibility.  Read the Blog FISCAL POLICY Spending Smarter to Boost Growth New IMF analysis in the latest Fiscal Monitor shows that governments could gain one-third more value from their spending, on average, by adopting best practices. By spending more efficiently and better allocating existing resources, emerging markets and developing economies can increase output by 11 percent, and advanced economies by 4 percent, over the long term. Spending smarter is more than a fiscal tactic—it’s a growth strategy. Read the Blog FOREIGN EXCHANGE Economic Uncertainty Can Test the Resilience of the Foreign Exchange Market The latest Global Financial Stability Report shows that rising global financial or economic uncertainty typically increases investor risk aversion and boosts demand for safe-haven assets, leading to volatility and liquidity strains in foreign exchange markets. For example, dollar purchases by non-US residents tend to increase by 24 percentage points following a sharp spike in financial uncertainty. However, comprehensive surveillance, stronger safeguards, and modernized platforms can reduce risk, enhance efficiency, and better position foreign exchange markets to support global finance.   Read the Blog PODCAST Podcast: Swati Bhatt on Where Startups Roam The US is a breeding ground for startups, and California has been the center of that universe since the dot-com boom in the late 1990s. But rising costs, tighter quarters, and increasing bureaucracy have many tech innovators seeking greener pastures, well beyond Silicon Valley. Princeton University’s Swati Bhatt has been studying the evolution of America’s startup boom in recent years and has uncovered a surprising trend toward rural communities, better known for raising cattle than for high-tech infrastructure. In this podcast, Bhatt talks to journalist Rhoda Metcalfe about these new entrepreneurs opting for a different lifestyle.  Listen to the Podcast COUNTRY FOCUS Explaining Strong Credit Growth in Brazil Despite High Policy Rates   (Credit: IMF Photo/Tuane Fernandes/Alfribeiro-wsfurlan/iStock by Getty Images) At 15%, Brazil's interest rate (Selic) is one of the highest among major economies. Yet in 2024, bank credit grew by 11.5% and corporate bond issuance surged 30%. This paradox has sparked debate: is monetary policy not doing its job? Not quite. New IMF analysis shows that Brazil's central bank remains effective. Inflation is cooling (albeit slowly), and monetary policy transmission is working. Meanwhile, two powerful forces are driving credit growth: rising incomes and expanded financial inclusion, especially through fintechs.These forces boosted both the demand and supply of credit, helping households and businesses thrive—even as borrowing costs rose. Read More MARK YOUR CALENDAR OCTOBER 13-18, 2025    2025 World Bank Group/IMF Annual Meetings   The 2025 Annual Meetings will be held from Monday, October 13 through Saturday, October 18 at the IMF and World Bank Group headquarters in Washington, DC.  More Information 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.     Noha Elbadawy  Editor | IMF Weekend Read   NElbadawy@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