Académique Documents
Professionnel Documents
Culture Documents
Economic contractions that follow financial crises are longer and deeper than contractions that do not (Reinhart, Rogoff)
usually larger than for downturns without major financial stress but adjustment is almost always needed.
global economy: the long-term solution is in addressing global imbalances, i.e. increase in US saving rates
The past drivers of growth in emerging markets will likely be
weaker as private capital will be scarcer and more discriminating, and export growth slower
A second wave of financial turbulence is possible if quality of
banking sector loans deteriorate substantially: this will further suppress global capital flows and delay their recovery
Small open economies gained heavily from global growth and integration but are exposed to global shocks
Small open economies gained from key transmission
their shores
4
Policy responses
Fiscal stimulus through own resources (fiscal space permitting)
external environment
Fiscal adjustments (lower expenditures or higher taxes) as
2. Global volatility is going to be normal in an integrated world DEVELOP MACRO RISK MANAGEMENT SYSTEMS
3. Smart countercyclical policies can help create jobs in the short term and strengthen competitiveness in the medium term BE PROACTIVE 4. Recovery will be slow and more prolonged than in larger markets PLAN
FOR THE MEDIUM-TERM 5. Balance between financing and adjustment has to be found EXTERNAL ADJUSTMENT AND MEDIUM-TERM FISCAL CONSOLIDATION IS INEVITABLE 6. Even with properly manager public finances, the fight against poverty will be set back SCALE UP EFFECTIVE ANTI-POVERTY PROGRAMS 7. External resources will continue to be scarce specially in the post-crisis world STRENGTHENING COMPETITIVENESS AND ECONOMIC DIVERSIFICATION IS KEY