IMF:Weekend Read

 

Dear MARIA,   In today's edition, we highlight: Global imbalances widen in 2025 Peru's commodity boom   Africa in a fractured world

GLOBAL IMBALANCES Rising Global Imbalances Global current account imbalances widened in 2025 as China's surplus increased by about $300 billion, while the US deficit remained the world's largest despite narrowing by $69 billion.   China had the largest widening in over two decades, while the US balance exceeded the combined surpluses of China and the euro area. Each year, the IMF’s External Sector Report assesses the external positions and current account balances for the world’s largest economies.   Although countries routinely run trade and investment surpluses or deficits, according to the IMF’s report, unusually large and persistent imbalances can point to deeper economic distortions and create risks for financial stability, growth, and international economic cooperation.   The best solution to today’s elevated imbalances and their associated risks is simultaneous action across the world’s major economies. Mutually reinforcing policies in the US, China and the euro area could reduce global imbalances and boost economic growth, the report notes. Read the blog LATIN AMERICA Copper Windfall Gives Peru Chance to Reform Peru could permanently raise potential growth by up to 1 percentage point if it uses the opportunity provided by high copper prices to invest more efficiently, according to new IMF analysis.   “The real test is whether Peru can maintain strong and inclusive growth when commodity prices are no longer doing the heavy lifting,” according to Moya Chin, Sònia Muñoz, Giovanni Ugazio of the IMF’s Western Hemisphere department.    Peru is poised to benefit from high copper prices if the country implements reforms that raise productivity and increase trust in public spending. Reforming the mining sector, expanding non-mining industries, and improving the local sharing and investment of natural resources would support stronger growth in the long run.   With the energy transition and AI power equipment surge, global demand for copper is expected to stay high, which gives Peru the room to act before the commodity cycle turns.  Read the Country Focus FINANCE & DEVELOPMENT MAGAZINE Turning Global Fragmentation into Opportunity   Geopolitics is replacing globalization as the world’s governing philosophy, and economic decisions are increasingly subordinated to geopolitical calculations, Gedion Timothewos, Ethiopia’s foreign affairs minister, writes in Finance & Development magazine.   Timothewos argues that growing geopolitical rivalry is reducing development assistance and creating uncertainty that weakens trade and investment prospects across sub-Saharan Africa.   Africa, he writes, must learn from its modern history of division and substitute damaging competition with mutually beneficial collaboration. “With the right mix of policies, implemented with an experimental and adaptive mindset, Africa can turn this crisis into an opportunity.” Read the F&D story

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.

Jacqueline Deslauriers Senior Editor | IMF Weekend Read  jdeslauriers@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