International Monetary Fund update

Dear MARIA,   In today's edition, we highlight: Regaining Europe’s Productivity Edge How to Promote the Wealth of Nations Enhancing South Africa’s Business Environment Podcast: Why Africa is Keeping its Debt Closer to Home 2026 IMF MENA Research Conference Chart of the Week: Europe Can Regain Its Productivity Edge by Scaling Up Young Firms   Europe once led the world in productivity growth, but it now lags behind the United States—and the gap has widened significantly in recent years. Our Chart of the Week shows that this shortfall is largely due to the challenges European firms face in scaling up. In the European Union, young firms—those founded less than 50 years ago—have a combined stock market valuation of $5 trillion, against $42.9 trillion in the US.   This reflects more limited European integration. Its capital markets remain fragmented; labor mobility is constrained; and selling products and services across borders is often complex. As a result, the EU has too many small, low-growth firms: a typical European company that is more than 25 years old employs around 10 people, compared with 70 in the US.   Our research shows that closing this gap requires deeper integration of EU capital, labor, and consumer markets to help firms grow and compete at scale. Read the Blog F&D MAGAZINE How to Promote the Wealth of Nations On the 250th anniversary of The Wealth of Nations, Nobel laureate Michael Spence reflects on why Adam Smith’s ideas still matter for today’s global economy.   Prosperity, he writes in F&D, is driven by productivity gains rooted in specialization, innovation, and access to large markets—enabled by trade and strong institutions. As Spence puts it, “specialization is limited by the extent of the market and the probability that it will remain accessible.”   In a more fragmented and risk-prone global economy, sustaining growth means preserving openness, managing complexity, and adapting Smith’s framework to new technological and geopolitical realities. “Adam Smith lived at a time when the economy went from extremely local to the beginning of a rapid increase in specialization—and this journey continues in our lifetimes,” notes Spence. Read the Article COUNTRY FOCUS Enhancing South Africa’s Business Environment to Boost Growth and Create Jobs South Africa’s economy has shown resilience in 2025, but growth remains too weak to significantly reduce high unemployment, especially among young people. New IMF analysis highlights a key constraint: an overly complex and fragmented business environment.   Operating a business in South Africa—especially dealing with product-market regulations such as required licensing and permitting—is significantly more burdensome, fragmented, and costly than in peer economies. These constraints deter investment and stifle innovation.   And they are especially challenging for small-and-medium-sized enterprises, which have limited resources to cope with red tape while accounting for the lion’s share of job creation. Establishing a simplified and coherent national licensing and permitting policy will be critical to generate durable growth that decisively reduces unemployment. Read the Article PODCAST Amadou Sy on Why Africa is Keeping its Debt Closer to Home African economies began tapping into overseas markets for funding in the early 2000s, after debt burdens had been alleviated by the Highly Indebted Poor Countries (HIPC) Initiative. However, surging interest rates on dollar- and euro-denominated loans in recent years have prompted countries to turn to domestic markets for their borrowing needs. Amadou Sy heads the IMF Africa Department’s Regional Studies division. In this podcast, he says there are benefits to issuing debt in local markets and in local currency. Read the article in Finance & Development magazine. Listen to the Podcast MIDDLE EAST 2026 IMF MENA Research Conference: Call for Papers and Graduate Student Award Are you a graduate student researching economic issues in MENA countries? If so, here’s your chance to bring your research into IMF policy and academic discourse.   The IMF is accepting paper submissions for the 2026 MENA Research Conference in Rabat, Morocco. Selected presenters will have their travel expenses and accommodation covered. Moreover, a monetary prize will be awarded for the top submission.   The conference will explore how the region can respond to external shocks through macroeconomic and financial policies; harness digitalization and AI to boost productivity; and invest in energy and infrastructure. The deadline for paper submission is March 31st. Learn More SURVEY Asia-Pacific Perspectives: Survey on the IMF’s Work Do you live in the Asia Pacific region? If so, do you have a few minutes to share your views on the IMF’s work and communications in your country or in the region? Take our short survey by clicking the link below. Your feedback will help us improve our engagement ahead of the 2026 Annual Meetings in Thailand. After completing the survey, you will have the option to sign up for a free subscription to the IMF’s Finance & Development (F&D) magazine. Take the Survey 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