Dear MARIA, In today's edition, we highlight: |
“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.” |
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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. |
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. |
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. |
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(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. |
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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. |
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| | Editor | IMF Weekend Read |
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