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Confronted with low prices and shortages of storage and transportation capacity for oil, several producers have recently announced production cutbacks. These low prices will have an impact on Alberta government revenues and on drilling activity, slowing growth in Alberta in at least. We do not expect such adjustment to have a material effect on overall Canadian growth but, if sustained, it will pose a growing downside risk to the Canadian outlook.

It is worth noting that crude bitumen and total oil production in Alberta reached record high levels in August, according to Statistics Canada. In our Spring Outlook we estimated that the government budgets tabled early in the year would stimulate Canadian growth significantly in and but have no effect on it afterwards.

The Review gave no indication of what measures the government might take in to restore fiscal balance. In the absence of definitive new fiscal plans from the federal government or the provinces, in this Outlook we have incorporated the same impact of fiscal policy for the next two years that we estimated in our Spring Outlook.

Also, going forward governments will be confronted with somewhat lower revenue growth, reflecting slowing nominal GDP growth, and rising debt service charges due to interest rate increases. These expected developments will restrain the room for manoeuver with respect to program spending.

Bennett Jones Fall Economic Outlook | Bennett Jones

In January, we plan to issue a prebudget analysis of federal and provincial revenue and expenditure planning issues. Based on our assumptions concerning oil prices, growth and policy interest rates in the United States and Canada, we judge that the Canadian dollar will continue to move in a band centered on slightly less than 77 U. The risks to our global outlook that were identified at the end of Section I represent risks to our Canadian outlook as well, given the strong trade and financial ties between the Canadian economy and the rest of the world.

In particular, escalating trade restrictions by the United States and China have materialized and could intensify further with potentially grave consequences for global growth, trade and commodity prices. They create negative risks to currently projected Canadian growth in and Our Canadian outlook is also at risk due to factors that apply more particularly to Canada.

Thus, as noted in the trade section, while the agreement on a new USMCA is an inferior arrangement to the current NAFTA for Canada, it nevertheless significantly reduces uncertainty about North American trade arrangements and, once it is confirmed, may contribute to a little more growth in Canadian investment and GDP than projected. Volatile oil and commodity prices, as always, constitute both upside and downside risks to our Canadian projection.

The price discount on Canadian heavy oil will also be volatile but it most likely will remain historically large until at least mid, and through this period it represents a small negative risk to Canadian aggregate growth. On the other hand, stronger-than-expected Chinese growth could buttress higher prices for commodities with a small upside risk to Canadian growth as a result. Finally, as mentioned earlier, the fiscal plans of the federal and provincial governments may differ significantly from those presented last spring.

On balance, risks are tilted to the downside. In the previous chapters, we discussed the outlook for economic growth and trade over the next couple of years. In this chapter, we shift our focus to the medium term, the decade to Our purpose is to outline briefly, some key trends which will shape the demographic, technological, trade and climate change challenges which Canadian businesses and governments will have to deal with in the decade ahead. Our objective is not to provide specific forecasts of future developments.

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Rather it is to paint a broad-brush landscape of some of the issues that must be considered in shaping a strategy to deal with the challenges and opportunities in the decade ahead. As the baby boom generation leaves the Canadian labour force during the next decade, the aggregate labour force participation rate will continue to fall. Based on current trends, total hours worked will likely increase by only 0. The implication of this demographic shift alone the aging effect in line 3 of Table 2 is that potential growth of Canadian GDP due to growing labour input would be a full 1.

Even more worrying, trend labour productivity for the total economy slowed from 1. Were this trend to continue in the twenties, real GDP growth would slow from 2. Real GDP growth per capita, which declined from 2. Normally, this dramatic slowing of per capita output growth would imply a comparable slowing of growth of real per capita incomes and consumption of workers barring significant changes in the terms of trade and in personal taxes and transfers.

But, as the fraction of the population over 75 years of age almost doubles from 6. This will leave little or no room for increase for the working population or for the education and support of children. In summary, the age structure of the Canadian population throughout the coming decade suggests that there may be almost no improvement in the real level of consumption enjoyed by Canadians of working age unless they either work more hours or add more valued output in each hour they work.

Before turning to the challenge of raising productivity and investment in the s, we consider the scope for increasing the growth of output by increasing total labour hours supplied. For males, it fell for many years before rising somewhat from the turn of the century onwards, while for females it has risen noticeably more since the turn of the century. This shift would raise potential growth of GDP per capita in the s from a projected 0.

The participation rate of this cohort has already been increasing in recent years. Further increase should be possible given the improved health of this cohort, the higher level of education of this cohort and the increasing demand for workers in the service sector especially the care sector where the physical requirement of work is less of a limiting factor on participation. This incentive for increased labour force participation of this age cohort, in our view, would constitute an efficient reallocation of public resources and an appropriate way for the baby boom generation as a whole to reduce their demand for income transfers from younger cohorts.

We thus conclude that raising labour force participation can increase the contribution of labour to Canadian potential GDP growth in the s from about 0. But, without significant improvement in productivity from current trend growth of 1. To maintain growth, and in particular to maintain growth relative to the United States, productivity must increase not only relative to our recent past performance but also relative to that of the United States.

This will require that Canada reverse the long downward trend in our relative performance to the United States, as shown in Chart 1, at a time when American businesses are making massive investments in AI and advanced technologies. Productivity improvement starts with investment in research and development of new processes and equipment, investment which has been seriously underfunded in Canada. But, on this front, Canadian business has been increasingly deficient this century. Similarly, investment in intellectual property products has dropped from a peak of 2.

Canadian investment in software and databases, the key component driving much of advances in AI and productivity enhancing production processes, is seriously deficient relative to the United States and many other OECD countries. For example, investment in ICT per worker has been only about half the level observed in the United States since This lack of investment in machinery, equipment and intellectual property products since is particularly disturbing in light of the relatively high level of profits in the Canadian economy since By corporate profits had almost doubled to The challenge facing governments is to put in place policies, which increase the incentive for business to make these productivity-enhancing investments.

In our Spring Outlook, we discussed key supply-side policies where governments could act to remove obstacles to investment and improve incentives to encourage investment:. While governments have the responsibility to do these things, ultimately it is the responsibility of businesses to invest, innovate and grow their businesses.

In the end, it is pressure from competition from other businesses that provides the ultimate incentive for any enterprise to make the investments which in the end will generate aggregate productivity growth and rising national income. It is competitive pressure the fear of failure and lure of future profit that drives change and innovation.

Hence, it is the demand side policies of government, not just the traditional supply-side policies listed above, that are equally important in promoting innovation and productivity growth. Policy in the form of providing and enforcing a level playing field at home and access to foreign markets is essential. At home, this involves effective traditional competition policy and IP protection.

The removal of anti-competitive barriers to competition across geographic and jurisdictional boundaries— however politically difficult—is very important. And, perhaps as important as these domestic policies aimed at creating domestic competition will be in the s, our future trade policies will be equally important in promoting innovation and domestic competition.

It is to the trade challenge we now turn in the next section. In Section II, we outlined the background for this challenge and explored some of the immediate actions required by the government to manage its various bilateral and regional relationships. But, it also needs to work on a longer term strategy to ensure that the international trade rules respond to the geostrategic challenge of managing a deteriorating global trade environment led by the confrontation between China and the United States.

We believe the challenge will increase over time. Canada needs to decide now on its basic approach.


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The last two years have shaken business confidence in the stability of the Canada-U. Canada needs to work to restore that confidence by addressing three major elements. First, Canada must secure ratification of the USMCA to ensure a continuing strong framework for the conduct of our bilateral trade. Second, Canada must effectively manage ongoing trade disputes, including protectionist threats from the Trump administration. This will involve working to remove tariffs on steel and aluminum and the related retaliatory measures put in place by Canada. Third, to rebuild confidence that business can consider the American market to be truly open to Canadian business the government should look for ways to strengthen further the bilateral relationship.

And, it must involve being prepared to consider what corresponding domestic reforms might be needed to support that objective and which at the same time would support efforts to spur innovation, raise domestic productivity and thus to make the Canadian economy more competitive. This must involve reducing the barriers to foreign competition in over-protected sectors of our domestic market. Canada should continue broad-based advocacy efforts, which recognize the diffuse nature of power in the United States and the importance of support across the nation.

We should also work with Mexico when that serves our interests, as it often will. This will mainly involve successfully implementing and negotiating free trade agreements and strengthening multilateral cooperation through the WTO. On the free trade front, the focus should be on agreements that can make a real economic difference to Canada. Of course, we also need to work with our second largest partner, China, but that will be addressed more fully below.

The government should continue the efforts initiated by Trade Diversification Minister Carr to work with others to revitalize and modernize the WTO.


  1. Saint Bartholomews Eve A Tale of the Huguenot WarS?
  2. Racing In The Street.
  3. World Economic and Financial Surveys?
  4. Assumptions and Conventions;
  5. The New International Economic Context for European Agricultural Research.
  6. ECB staff macroeconomic projections for the euro area, March .
  7. To See The Sky.
  8. Part of that will be identifying what issues, both new and old, need to be given priority in a 21st century WTO, issues that are important for increasing market access and competition in sectors undergoing rapid technological change. Additionally, it should involve devising ways in which the WTO can better serve as a platform for managing the trade relationship between the United States and China. The third trade challenge is how Canada conducts trade policy in an environment where are our two largest trade partners are engaged in a strategic battle about how economies should be organized and what international trade rules are appropriate.

    This competition is not just that which would be expected between the hegemon and the rising new super power. It also stems from the fact that China and the United States have very different models of how an economy should be organized, models which in important ways are not readily compatible.

    For Canada, finding its way in this environment is the biggest and most difficult trade challenge for the coming decade. Ten years from now the Chinese economy will be far larger than the American and the Chinese will have a much larger share of world trade, including in advanced technology products.

    The Americans have already made it clear they are concerned about China playing a key role in the development of the next generation of information technology products including especially the development of 5G broadband networks. We have already seen signs that at least the current U. There are persistent reports that the United States and China may resolve their trade differences prior to the November 30 to December 1 G20 summit in Buenos Aires.

    Any announcement that might be made will not address the fundamental difference between the two countries. The government should work to put the bilateral trade relationship with China on a firmer footing. An FTA would do that. However, further deterioration in the China-U. At the same time, Canadians will not want to be disadvantaged in the Chinese market by competitor countries which have negotiated FTAs with China. The government needs to make a clear-eyed assessment of the situation, taking into account a range of factors, one of which should be consideration of which market might offer the best value-added opportunities for Canadians.

    In its analysis, the government should carefully consider whether a revitalized WTO might offer a way through this environment fraught with risk. A dynamic discussion on the future of multilateral trade triggered by middle powers might offer a platform on which the United States and China could engage in an effort to broker their trade differences. Certainly, promoting any process, which stands a real chance of helping to reduce tensions between the United States and China, would be a good investment for Canada.

    The last decade has provided many trade challenges for Canada. Managing the coming decade may be a lot more difficult. In confronting already difficult demographic, technological, and trade developments for the medium to long term, Canada must situate its policies within the frame of trends affecting the global climate and energy system. Climate change is a global problem that illustrates both the necessity and the limitations of national and provincial and local actions and global cooperation. The challenge of mitigating climate change and adapting to its consequences is compounded internationally by the desired pursuit of the United Nations Sustainable Development Goals and necessary efforts to deliver energy sustainably to a growing global population, including close to 1 billion individuals who still do not have access to electricity.

    Participants at the Paris Conference agreed to take action to hold global temperature rise to well below 2 degrees Celsius and indeed to pursue efforts to limit the increase to 1. The IEA identifies a range of ongoing structural transformations in the energy system, including a rising share of electricity in global energy demand and rapid growth in the deployment of solar and wind power.

    Nonetheless, demographic and economic growth in Asia dwarf the effects of other factors around the globe. In this scenario, demand for coal as a primary energy source only stabilizes. The demand for natural gas rises in both advanced and developing economies, with robust growth in LNG trade. As emissions in the energy system—the combustion of fossil fuels—represent by far the larger share of global emissions of GHGs, it is evident that the global community has not yet come close to resolving the problem of climate change. In the circumstances, in addition to adaptation to a changing climate, Canada must find the way to make the best and smartest possible contribution to global efforts to bend some of the curves while also realizing opportunities in an evolving global energy system.

    There are three key ways for Canada to do this:. The question is what policy instruments must be put in place to help Canada make the best contributions on these three fronts. We consider in an annex to this section, on page 28, the third point in more detail—how to curb our domestic emissions. Through this difficult decade from , business and governments have concentrated their efforts on recovery from the painful impact of the great financial crisis.

    The first objective was to recover the ground lost in the great recession and then to repair public private balance sheets that had been damaged in the recovery effort. Only in the last two years can we say that growth has been robust and that the output gap that opened up in has been closed in North America and a few other advanced economies. But, while business and governments have been focused on recovery and protection of existing jobs, knowledge has been advancing so that the economic and technological environment we will face in the s will present qualitatively different challenges than it did prior to In this section, we have tried to briefly address four of these challenges, not to provide solutions but rather to raise the questions that need to be addressed by business and governments as they formulate their strategic plans.

    Our list of challenges is far from complete, but we hope it is helpful in shifting the focus to longer term issues. But a policy framework to address these challenges must be set in order to provide businesses and households with the appropriate and efficient incentives to make decisions which will enhance their individual and collective welfare over the medium to long term. While there is general agreement that Canada must contribute its fair share of global efforts to address climate change, and reduce its emissions of GHGs, there is intense debate about how, and how fast, households, businesses and governments should make this contribution.

    There are sharply divided views about the policies that governments should put in place to induce consumers and businesses to reduce emissions and about the allocation of the short-run costs of emission reduction. Carbon pricing is a focal point of the debate. Economists generally agree that in a market economy, price signals constitute the lowest-cost way of inducing changes in behaviour such as needed over time to reduce emissions of GHGs.

    While any policy that aims to lower domestic emissions below a business-as-usual scenario will entail short-run costs to the economy, with the benefits of lower global emissions to be realized over the longer term, these adjustment costs can be minimized by creating the right market incentives.

    By raising the price of high GHG-creating activities relative to the price of activities that create no or little GHGs, businesses and households are given a financial incentive to voluntarily reduce demand for emissionintensive goods and services, shift demand to other activities, and invest, innovate and do things differently based on their own preferences and opportunities. In effect, the market decides where the GHG reductions can be achieved most cost effectively in the economy.

    While economic theory is clear on the merits of carbon pricing, and while some examples such as the carbon tax in British Columbia have been implemented sustainably, there is, in practice, no easy or complete solution and no mechanism that does not involve some policy trade-offs. There are different ways to apply a carbon price, including a carbon tax at a rate set by the government or a cap-and-trade system where the government sets an emissions cap and lets the market establish the price at which emission permits will be traded. For a small open economy like Canada, theory would hold that a uniform structure of carbon pricing applying across the country would be the most efficient means of reducing GHGs, subject to a number of conditions:.

    It aims to ensure that application of a price to GHG emissions from a broad set of sources by implementing, effective in , a federal Backstop where provincial or territorial jurisdictions fail to meet a federal Benchmark. The approach is responsive to the conditions necessary for an effective carbon-pricing system but it illustrates some of the technical, legal and political difficulties of implementation.

    The Government has also determined that the carbonpricing systems in Nova Scotia, Newfoundland, and the Northwest Territories are on track to meeting the federal benchmark. In other jurisdictions, the federal Backstop will apply in whole or in part. The federal Backstop itself is structured as a hybridpricing system along the lines of the Alberta model. For consumers and small businesses, this will mean, for example, an added charge of 4. Fuel that is imported in the Backstop jurisdiction from another province or from outside Canada will be taxed and fuel that is exported will be exempt.

    This will have the effect of a border adjustment for this part of the pricing system. Some exemptions will apply, for example for farmers and fisherman. The OBPS will apply to industrial facilities that have reported emissions of 50, tonnes of CO 2 e or more per year during any calendar year between to Facilities that have reported emissions of at least 10, tonnes, and less than 50, tonnes, for any year starting with , can also opt-in to the OBPS and be exempt from the fuel charge.

    Firms with emissions below the standard will earn credits that they can bank or sell. Firms with emissions above the standard will pay the equivalent of the fuel charge on these emissions or else buy credits or use previously banked credits. The parameters of the OBPS are intended to mitigate potential damage to competitiveness for Canadian industrial producers in the absence of an international framework for application of border adjustments for carbon pricing in trade of goods and services. Under the federal backstop, the fuel charge will apply in Saskatchewan, Manitoba, Ontario and New Brunswick, effective April 1, The OBPS will apply partially in Saskatchewan to fill in gaps relative to the Benchmark for large emitters as well as in Manitoba, Ontario, New Brunswick and Prince Edward Island, effective January 1, retroactively since regulations will be finalized in the course of The federal Backstop will also apply in the Yukon and Nunavut later in Where the federal Backstop applies, revenue raised from the fuel charge will be returned to the same jurisdiction.

    Where the jurisdiction chooses to adopt the federal system Yukon and Nunavut , revenue will be returned directly to the governments. In other jurisdictions that do not meet the federal Benchmark i. The Government has also committed to return revenue from the OBPS to the respective jurisdictions through future climate actions, with details to be announced in The revenues derived from the fuel charge and the rebates paid will be substantial.

    The resulting division of the IMF's membership into borrowers and non-borrowers has increased the controversy around conditionality because the borrowers are interested in increasing loan access while creditors want to maintain reassurance that the loans will be repaid. A recent [ when? A study by Bumba Mukherjee found that developing democratic countries benefit more from IMF programs than developing autocratic countries because policy-making, and the process of deciding where loaned money is used, is more transparent within a democracy. The new Framework became fully operational in February and it was applied in the subsequent decisions on Argentina and Brazil.

    Such a reform was essential for ending the crisis atmosphere that then existed in emerging markets. The reform was closely related to, and put in place nearly simultaneously with, the actions of several emerging market countries to place collective action clauses in their bond contracts. In , the framework was abandoned so the IMF could make loans to Greece in an unsustainable and political situation.

    The staff was directed to formulate an updated policy, which was accomplished on 22 May with a report entitled "The Fund's Lending Framework and Sovereign Debt: Preliminary Considerations", and taken up by the Executive Board on 13 June. These reprofiling operations would "generally be less costly to the debtor and creditors—and thus to the system overall—relative to either an upfront debt reduction operation or a bail-out that is followed by debt reduction Collective action clauses , which now exist in most—but not all—bonds, would be relied upon to address collective action problems.

    Globalization encompasses three institutions: global financial markets and transnational companies , national governments linked to each other in economic and military alliances led by the United States, and rising "global governments" such as World Trade Organization WTO , IMF, and World Bank. The establishment of globalised economic institutions has been both a symptom of and a stimulus for globalisation.

    The development of the World Bank, the IMF regional development banks such as the European Bank for Reconstruction and Development EBRD , and multilateral trade institutions such as the WTO signals a move away from the dominance of the state as the primary actor analysed in international affairs. Globalization has thus been transformative in terms of a reconceptualising of state sovereignty. Following United States President Bill Clinton 's administration's aggressive financial deregulation campaign in the s, globalisation leaders overturned long standing restrictions by governments that limited foreign ownership of their banks, deregulated currency exchange, and eliminated restrictions on how quickly money could be withdrawn by foreign investors.

    The measurement accounts for the unpaid costs that polluters impose on governments by the burning of coal, oil, and gas. The projected impacts of fossil fuel subsidies on populations—air pollution, health problems, floods, droughts, and storms driven by climate change—account for over half of the reported global expenditure. Overseas Development Institute ODI research undertaken in included criticisms of the IMF which support the analysis that it is a pillar of what activist Titus Alexander calls global apartheid.

    ODI conclusions were that the IMF's very nature of promoting market-oriented approaches attracted unavoidable criticism. On the other hand, the IMF could serve as a scapegoat while allowing governments to blame international bankers. Argentina, which had been considered by the IMF to be a model country in its compliance to policy proposals by the Bretton Woods institutions, experienced a catastrophic economic crisis in , [93] which some believe to have been caused by IMF-induced budget restrictions—which undercut the government's ability to sustain national infrastructure even in crucial areas such as health, education, and security—and privatisation of strategically vital national resources.

    The current—as of early —trend toward moderate left-wing governments in the region and a growing concern with the development of a regional economic policy largely independent of big business pressures has been ascribed to this crisis. In , a senior ActionAid policy analyst Akanksha Marphatia stated that IMF policies in Africa undermine any possibility of meeting the Millennium Development Goals MDGs due to imposed restrictions that prevent spending on important sectors, such as education and health.

    He criticised IMF for praising the monetary policies of the US, which he believed were wreaking havoc in emerging markets. Countries such as Zambia have not received proper aid with long-lasting effects, leading to concern from economists. Since , Zambia as well as 29 other African countries did receive debt write-offs, which helped with the country's medical and education funds. However, Zambia returned to a debt of over half its GDP in less than a decade.

    American economist William Easterly , sceptical of the IMF's methods, had initially warned that "debt relief would simply encourage more reckless borrowing by crooked governments unless it was accompanied by reforms to speed up economic growth and improve governance," according to The Economist. The IMF has been criticised for being "out of touch" with local economic conditions, cultures, and environments in the countries they are requiring policy reform.

    Jeffrey Sachs argues that the IMF's "usual prescription is 'budgetary belt tightening to countries who are much too poor to own belts'". Conditionality has also been criticised because a country can pledge collateral of "acceptable assets" to obtain waivers—if one assumes that all countries are able to provide "acceptable collateral". One view is that conditionality undermines domestic political institutions. Political instability can result from more leadership turnover as political leaders are replaced in electoral backlashes.

    Another criticism is that IMF programs are only designed to address poor governance, excessive government spending, excessive government intervention in markets, and too much state ownership. On top of that, regardless of what methodologies and data sets used, it comes to same the conclusion of exacerbating income inequality. With Gini coefficient , it became clear that countries with IMF programs face increased income inequality. It is claimed that conditionalities retard social stability and hence inhibit the stated goals of the IMF, while Structural Adjustment Programs lead to an increase in poverty in recipient countries.

    Countries are often advised to lower their corporate tax rate. Stiglitz , former chief economist and senior vice-president at the World Bank , criticises these policies. Stiglitz concludes, "Modern high-tech warfare is designed to remove physical contact: dropping bombs from 50, feet ensures that one does not 'feel' what one does. Modern economic management is similar: from one's luxury hotel, one can callously impose policies about which one would think twice if one knew the people whose lives one was destroying.

    The researchers Eric Toussaint and Damien Millet argue that the IMF 's policies amount to a new form of colonization that does not need a military presence:.

    Section I: Global Growth to 2021

    Following the exigencies of the governments of the richest companies, the IMF, permitted countries in crisis to borrow in order to avoid default on their repayments. Caught in the debt's downward spiral, developing countries soon had no other recourse than to take on new debt in order to repay the old debt. Before providing them with new loans, at higher interest rates, future leaders asked the IMF, to intervene with the guarantee of ulterior reimbursement, asking for a signed agreement with the said countries.

    The IMF thus agreed to restart the flow of the 'finance pump' on condition that the concerned countries first use this money to reimburse banks and other private lenders, while restructuring their economy at the IMF's discretion: these were the famous conditionalities, detailed in the Structural Adjustment Programs. The IMF and its ultra-liberal experts took control of the borrowing countries' economic policies. A new form of colonization was thus instituted. It was not even necessary to establish an administrative or military presence; the debt alone maintained this new form of submission.

    International politics play an important role in IMF decision making. The clout of member states is roughly proportional to its contribution to IMF finances. The United States has the greatest number of votes and therefore wields the most influence. Domestic politics often come into play, with politicians in developing countries using conditionality to gain leverage over the opposition to influence policy. The IMF is only one of many international organisations , and it is a generalist institution that deals only with macroeconomic issues; its core areas of concern in developing countries are very narrow.

    Jeffrey Sachs argues in The End of Poverty that the IMF and the World Bank have "the brightest economists and the lead in advising poor countries on how to break out of poverty, but the problem is development economics". He also notes that IMF loan conditions should be paired with other reforms—e. The scholarly consensus is that IMF decision-making is not simply technocratic, but also guided by political and economic concerns.

    Reforms to give more powers to emerging economies were agreed by the G20 in Critics also claim that the IMF is generally apathetic or hostile to human rights, and labour rights. The controversy has helped spark the anti-globalization movement. An example of IMF's support for a dictatorship was its ongoing support for Mobutu 's rule in Zaire , although its own envoy, Erwin Blumenthal , provided a sobering report about the entrenched corruption and embezzlement and the inability of the country to pay back any loans. Arguments in favour of the IMF say that economic stability is a precursor to democracy; however, critics highlight various examples in which democratised countries fell after receiving IMF loans.

    A study found no evidence of IMF lending programs undermining democracy in borrowing countries. A number of civil society organisations [] have criticised the IMF's policies for their impact on access to food, particularly in developing countries. We need the World Bank, the IMF, all the big foundations, and all the governments to admit that, for 30 years, we all blew it, including me when I was president. We were wrong to believe that food was like some other product in international trade, and we all have to go back to a more responsible and sustainable form of agriculture.

    The FPIF remarked that there is a recurring pattern: "the destabilization of peasant producers by a one-two punch of IMF- World Bank structural adjustment programs that gutted government investment in the countryside followed by the massive influx of subsidized U. A study concluded that the strict conditions resulted in thousands of deaths in Eastern Europe by tuberculosis as public health care had to be weakened.

    In the 21 countries to which the IMF had given loans, tuberculosis deaths rose by In , a book by Rick Rowden titled The Deadly Ideas of Neoliberalism : How the IMF has Undermined Public Health and the Fight Against AIDS , claimed that the IMF's monetarist approach towards prioritising price stability low inflation and fiscal restraint low budget deficits was unnecessarily restrictive and has prevented developing countries from scaling up long-term investment in public health infrastructure.

    IMF policies have been repeatedly criticised for making it difficult for indebted countries to say no to environmentally harmful projects that nevertheless generate revenues such as oil, coal, and forest-destroying lumber and agriculture projects. Ecuador, for example, had to defy IMF advice repeatedly to pursue the protection of its rainforests , though paradoxically this need was cited in the IMF argument to provide support to Ecuador.

    The IMF acknowledged this paradox in the report that proposed the IMF Green Fund, a mechanism to issue special drawing rights directly to pay for climate harm prevention and potentially other ecological protection as pursued generally by other environmental finance. While the response to these moves was generally positive [] possibly because ecological protection and energy and infrastructure transformation are more politically neutral than pressures to change social policy. Some experts [ who? In the context of the European debt crisis , some observers [ who?

    Both Lagarde and her two predecessors Strauss-Kahn and Rato have been investigated by the authorities and have either faced trial or are scheduled to go on trial for a variety of offences. Lagarde had been accused of giving preferential treatment to businessman-turned-politician Bernard Tapie as he pursued a legal challenge against the French government.

    At the time, Lagarde was the French economic minister. Rato was arrested on 16 April for alleged fraud , embezzlement and money laundering. Life and Debt , a documentary film, deals with the IMF's policies' influence on Jamaica and its economy from a critical point of view. Debtocracy , a independent Greek documentary film, also criticises the IMF.

    In the film, Our Brand Is Crisis , the IMF is mentioned as a point of political contention, where the Bolivian population fears its electoral interference. From Wikipedia, the free encyclopedia. International organisation. For other uses, see IMF disambiguation. Headquartered in Washington, D. Further information: Structural adjustment.

    IMF member states. This section needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. Retrieved 14 October Retrieved 1 December Retrieved 1 August Retrieved 15 December Harvard Business Review. Cultural Anthropology 3 4 : — International Monetary Fund. Retrieved 12 March New York: Cambridge University Press.

    Journal of Conflict Resolution. Theory and Society. Review of World Economics. Springer Publications. About the IMF. Retrieved 8 April Independent Office of the International Monetary Fund. International Tax and Public Finance. G Discussion Papers. United Nations Conference on Trade and Development Retrieved 18 March IMF Institute. UC Atlas of Global Inequality. Economic Crises.

    Archived from the original on 22 April International Financial Management. Imf Survey No. Journal of Economic Perspectives. The Washington Post. Retrieved 2 April Retrieved 25 March The Kosovo Times. No Downloads. Views Total views. Actions Shares. Embeds 0 No embeds. No notes for slide. World economic outlook oct - by imf 1. The global growth forecast for and —3. Notable pickups in investment, trade, and industrial production, coupled with strengthening business and consumer confi- dence, are supporting the recovery.

    With growth outcomes in the first half of generally stronger than expected, upward revisions to growth are broad based, including for the euro area, Japan, China, emerging Europe, and Russia. However, the recovery is not complete: although the baseline outlook is better, growth remains weak in many countries. The outlook for advanced economies has improved, notably for the euro area, but in many countries inflation remains weak, indicating that slack has yet to be eliminated, and prospects for growth in GDP per capita are held back by weak productivity growth and rising old-age dependency ratios.

    Prospects for many emerging market and developing economies in sub-Saharan Africa, the Middle East, and Latin Amer- ica are lackluster, with several experiencing stagnant per capita incomes. Fuel exporters are particularly hard hit by the protracted adjustment to lower commodity revenues.

    Risks to the baseline are broadly balanced in the short term but skewed to the downside in the medium term. Short-term growth could increase further, as stronger confidence and favorable market conditions unleash pent-up demand, but setbacks are also possible. With high policy uncertainty, missteps—which the baseline assumes will be avoided—or other shocks could materialize, taking a toll on market confidence and asset valuations, and tightening financial conditions. Over the medium term, dealing with financial sector challenges will be essential.

    Minimizing the risk of a sharp slowdown in China will require the Chinese authorities to intensify their efforts to rein in the credit expansion. A decom- pression of risk premiums and higher long-term interest rates would expose fragilities, including by worsening public debt dynamics.

    Although progress has been made in addressing European banking sector issues, remaining problems need to be addressed forcefully to avoid weak- ening confidence and fears of adverse feedback loops between low demand, prices, and balance sheets in parts of the euro area. Although the chances of advanced economy policies turning inward appear to have diminished in the near term, pressures for increased protectionism have not disappeared and ought to be resisted.

    A host of noneconomic risks, including intensified conflict and geopolitical tensions, also remain salient. The welcome cyclical upturn after disappointing growth over the past few years provides an ideal window of opportunity to undertake critical reforms, thereby staving off downside risks and raising potential output and standards of living more broadly. Structural reforms and growth-friendly fiscal policy measures are needed to boost productivity and labor supply, with varying prior- ities across countries.

    In advanced economies, monetary policy should remain accommodative until there are firm signs of inflation returning to targets. At the same time, stretched asset valuations and increasing leverage in some market segments bear close monitoring, including through proactive micro- and macroprudential supervi- sion, as necessary. Fiscal policy should be aligned with structural reform efforts, taking advantage of favorable cyclical conditions to place public debt on a sustain- able path while supporting demand where still needed and feasible. In many emerging market and developing economies, fiscal space to support demand is limited, especially in commodity exporters.

    But monetary policy can generally be supportive because inflation appears to have peaked in many countries. Exchange rate flexibil- ity helps the adjustment to external shocks. Efforts to improve governance and the investment climate would also strengthen growth prospects. Recent Developments and Prospects World Economy Keeping Its Momentum The pickup in global activity that started in gathered steam in the first half of , reflecting firmer domestic demand growth in advanced econo- mies and China and improved performance in other large emerging market economies.

    The continued recovery in global investment spurred stronger man- ufacturing activity Figures 1. World trade growth moderated in the second quarter after expand- ing very briskly in the first. Global purchasing manager indices and other high-frequency indicators for July and August suggest that global growth momentum continued into the third quarter of Among advanced economies, domestic demand and output grew faster in the first half of than in the second half of In the United States, weakness in consumption in the first quarter turned out to be temporary, while business investment continued to strengthen, partly reflecting a recovery in the energy sector.

    In the euro area and Japan, stronger private consumption, investment, and external demand bolstered overall growth momentum in the first half of the year. Growth in most of the other advanced economies, with the notable exception of the United Kingdom, picked up in the first half of from its pace in the second half of , with both domestic and external demand contributing.

    Among emerging market and developing economies, higher domestic demand in China and continued recovery in key emerging market economies supported growth in the first half of Higher external demand boosted growth in other emerging market economies in East Asia. In Brazil, strong export perfor- mance and a diminished pace of contraction in domes- tic demand allowed the economy to return to positive growth in the first quarter of , after eight quarters of decline. Mexico maintained growth momentum, despite uncertainty related to the renegotiation of the North American Free Trade Agreement and significant 0 1 2 3 4 H1 H1 H1 H1 H2 4.

    Global Activity Indicators 1. Emerging Market and Developing Economies 2. Manufacturing PMI Three-month moving average; deviations from 50 90 95 13 14 15 16 Aug. Recovering domestic and external demand supported rebounding growth in Russia and Turkey. Internal and cross-border conflict in parts of the Middle East still weighed on economic activity, while Venezuela faced a political and humanitarian crisis amid a deepen- ing recession.

    The main drivers of lower prices were higher-than-expected US shale produc- tion and stronger-than-expected production recov- eries in Libya and Nigeria. In addition, exports from OPEC countries remained at relatively high levels, even with lower production. The decline was mostly tied to seasonal factors and robust supply from the United States and Russia, and lower oil prices, which some natural gas prices are indexed to.

    Following the end of the disruption to coal transportation in Australia caused by Cyclone Debbie in late March, coal prices declined until June. Strong demand from Figure 1. Real Merchandise Imports Seasonally adjusted quarter-over-quarter annualized percent change China Other countries2 World Investment began to pick up in the third quarter of Global trade accelerated as well, before moderating more recently.

    Average petroleum spot price Food Metals Figure 1. Starting July 1, China imposed coal import restrictions on several ports to limit the adverse impact of lower international prices on production. Together with the cutback of coal production in China and sporadic labor disputes in coal mines in Australia, these restrictions have put renewed upward pressure on prices.

    By June, the metal price index had reached its lowest point in eight months as demand projections especially from the United States and China were revised down. However, prices rebounded since and remained on an upward trajectory in August with the improvement in mac- roeconomic sentiment, especially in China.

    Cereal prices rallied in June amid concerns over hot and dry weather in the Northern Hemisphere, but then declined substantially in August as fore- casts for grain stocks at the end of the —18 season increased unexpectedly. Meat prices increased on stronger-than-expected demand and tighter supplies. Expectations of consumer price inflation for the year have therefore diminished, especially in emerging market and devel- oping economies.

    Core inflation—inflation rates when fuel and food prices are excluded—has been generally soft. In most advanced economies, core inflation has failed to decisively increase toward central bank targets, even as domestic demand has gathered pace and unemploy- ment rates have fallen compared with the previous —10 —5 0 5 10 15 20 14 15 16 Jul.

    Panel 6 is equalized to in by shifting the level. Advanced Economies 2. Emerging Market and Developing Economies Unemployment rate right inverted scale Wage rate two-quarter moving average; percent change from a year ago —1 0 1 2 3 4 Jan. While unemployment rates have continued to decline, wage growth remains subdued.

    Core inflation in the euro area has been stuck in low gear at about 1. This decline in part reflected one-off factors including a reduction in prices of cell phone plans and prescription drug prices. Many other advanced economies, including Australia, Canada, Denmark, Korea, Norway, and especially Taiwan Province of China, are also experiencing weak inflation pressure.

    The United Kingdom, where the strong depreciation of the pound since last summer has passed through into higher consumer prices, is an exception to this pattern.

    IMF World Economic Outlook, April 2018

    The corollary of this finding is that, once firms and workers become more confident in the outlook, and labor markets tighten, wages should accelerate. In the short term, higher wages should feed into higher unit labor costs unless productivity picks up , and higher 1The part of the wage-inflation weakening attributable to lower productivity growth would likely have little or no pass-through into weaker price inflation, given that the changes would have no net effect on conventionally measured unit labor costs.

    A broad slowdown in total factor productivity and an interrelated decline in capital accu- mulation have been the drivers of the slowdown in labor productivity Adler and others Shifts in the composition of the labor force since the global financial crisis may also have exerted downward pressure on productivity and wages. New entrants tend to be paid less than exist- ing workers Daly, Hobijn, and Pedtke A larger share of older workers has also been linked to slower productivity growth Feyrer ; Aiyar, Ebeke, and Shao ; Adler and others In many emerging market and developing econo- mies, the waning of pass-through effects from earlier exchange rate depreciations and, in some cases, recent appreciations against the US dollar, have helped moderate core inflation rates.

    However, much of the softening of core inflation in emerging market econo- mies in recent months can be attributed to India and Brazil, where a one-off drop in food price inflation in June and high excess capacity in the economy after two years of recession, respectively, have also contributed to weaker inflation. In con- trast, some other countries in the Commonwealth of Independent States and the Middle East, North Africa, Afghanistan, and Pakistan region are experiencing continued inflationary pressures in as a result of exchange rate depreciations, the removal of subsidies, or increases in excise or value-added taxes.

    Supportive Financial Conditions Market sentiment has remained strong and vol- atility low since the publication of the most recent April WEO, even as expectations of US fiscal easing have dimmed. Long-term sovereign bond yields have remained broadly stable in Japan and Germany, risen by some 10 basis points in the United Kingdom, and declined by 20—30 basis points in France, Italy, and Spain, as spreads relative to German bund yields compressed sharply, particularly in the aftermath of the French presidential election.

    Equity markets in advanced econ- omies have continued to rise in recent months amid strong earnings, further improvements in consumer 6. Market volatility indicators remain low. In emerging market economies, financial conditions since March generally have been supportive of a pickup in economic activity. Capital flows to emerging market economies have remained resilient in recent months, continuing their recovery after a sharp decline in late and early Data are through September 15, Figure 1.

    World Economic Outlook

    Price-to-Earnings Ratios3 0 20 40 60 80 14 15 16 Aug. Compared with the spring, a more gradual normalization of US monetary policy is anticipated and credit spreads remain compressed. With growth generally above potential out- put, economic slack is gradually being reduced. Positive revisions to growth have also come with some upward revisions to the estimated path of potential out- put.

    Indeed, despite an upward revision to the cumula- tive growth rate over —18 relative to the October WEO forecast of about 0. The difference is explained by slightly higher projected potential growth during this period about In real effective terms, the US dollar weakened by about 7 percent and the euro strengthened by 6 percent from March to August Changes in most emerging market currencies have been moderate.