Borrowing by Low and Middle-Income Economies More than Tripled in 2017, World Bank International Debt
November 13, 2018--Statistics Show External Debt Stocks Rose 10 percent in 2017 to $7.1 trillion
Borrowing by low and middle-income economies from external official and private creditors surged to $607 billion in 2017 from $181 billion the previous year, the highest level in three years, as net debt inflows surpassed equity inflows for the first time since 2013' the World Bank's International Debt Statistics 2019 shows.
Net financial inflows-including debt and equity-jumped to $1.11 trillion, the highest level in four years, the report indicates.
Source: World Bank
World Economic Forum-Regional Risks for Doing Business
November 12, 2018--The World Economic Forum has been publishing The Global Risks Report since 2006, highlighting each year the vulnerability of our increasingly networked and interconnected world to volatility and disruption. The relevance of the risk perspective has only increased with time. Globally, we have been living through a period of unprecedented improvements in living standards, but this period is also unsettled and unsettling.
We can see signs of how vulnerable many of the complex systems that make up our world are: from the environmental to the financial and the societal to the geopolitical, the signs of strain are evident.
In The Global Risks Report 2018 we noted that this is now a multipolar and multiconceptual world-not only has global power shifted, but differences in norms and values among the world's powers have become more important. Predictions-particularly in the West-that global systems would converge have not stood the test of time and we are moving into uncharted international waters.
view the World Economic Forum Insight Report Regional Risks for Doing Business 2018
Source: World Economic Forum
IMF Working Papers-Is Inflation Domestic or Global? Evidence from Emerging Markets
November 8, 2018--Summary:
Following a period of disinflation during the 1990s and early 2000s, inflation in emerging markets has remained remarkably low and stable. Was this related to a global disinflation environment triggered by China's integration into world trade and the broader globalization in these economies, or to better domestic policies?
In this paper, we review the inflation performance in a sample of 19 large emerging markets in the past couple of decades and quantify the impact of domestic and global factors in determining inflation. We document that the level, volatility, and persistence of inflation declined significantly, albeit not uniformly. Our results suggest that longer-term inflation expectations, linked to domestic factors, were the main determinant of inflation. External factors played a considerably smaller role. The results are a useful piece of evidence as emerging markets craft their monetary policies to navigate the future shift in global financial conditions.
view the IMF Working Papers-Is Inflation Domestic or Global? Evidence from Emerging Markets
Source: IMF
Emerging, Developing Economies to Face Challenges if Global Inflation Rises
November 7, 2018--Further upward acceleration of global inflation from record low levels may impair efforts in emerging and developing economies to sustain the low inflation environment achieved over the past several decades, the World Bank said in a groundbreaking examination of inflation in the emerging and developing world.
The adverse effects of high inflation can fall disproportionately on the poor, who hold most of their assets in cash and rely heavily on wage income, welfare benefits, and pensions, the World Bank said in Inflation in Emerging and Developing Economies: Evolution, Drivers, and Policies. High inflation has historically also been associated with slower economic growth, making efforts to maintain low and stable inflation crucial for reducing poverty and inequality, the World Bank said.
view the World Bank Inflation in Emerging and Developing Economies: Evolution, Drivers, and Policies
Source: World Bank
IMF-Regional Economic Outlook: Middle East and Central Asia November 2018
November 6, 2018--CCA Highlights
Growth in the Caucasus and Central Asia (CCA) region exceeded expectations in 2017, but momentum is set to fade, according to the IMF's latest Regional Economic Outlook (REO).
he report highlights the importance of raising medium-term growth in the CCA region, outlining how growth-friendly fiscal policies, increased private activity, and improved resilience to global shocks are essential to delivering this goal.
view the IMF-Regional Economic Outlook: Middle East and Central Asia November 2018
Source: IMF
Smart beta growth engine sputters as investors question strategy
November 4, 2018--Active-passive hybrid funds on course for lowest level of inflows in five years.
Smart beta funds take an ordinary index and tweak it based on so-called factors , such as comparing prices of the underlying stocks with earnings. There are growing concerns, however, about the quality of some smart beta strategies.
Source: FT.com
IMF Working Papers-The Limits of Meritocracy
November 1, 2018--Summary:
We show that too much meritocracy, modeled as accuracy of performance ranking in contests, can be a bad thing: in contests with homogeneous agents, it reduces output and is Pareto inefficient.
In contests with sufficiently heterogeneous agents, discouragement and complacency effects further reduce the benefits of meritocracy. Perfect meritocracy may be optimal only for intermediate levels of heterogeneity.
view the IMF Working Papers-The Limits of Meritocracy
Source: IMF
Investors turn to ETF options for safety amid turmoil
November 1, 2018--A chastening October reminds some investors about the risks of a further drop
Source: FT.com
IMF Working Papers-An Algorithmic Crystal Ball: Forecasts-based on Machine Learning
November 1, 2018--Summary:
Forecasting macroeconomic variables is key to developing a view on a country's economic outlook. Most traditional forecasting models rely on fitting data to a pre-specified relationship between input and output variables, thereby assuming a specific functional and stochastic process underlying that process.
We pursue a new approach to forecasting by employing a number of machine learning algorithms, a method that is data driven, and imposing limited restrictions on the nature of the true relationship between input and output variables. We apply the Elastic Net, SuperLearner, and Recurring Neural Network algorithms on macro data of seven, broadly representative, advanced and emerging economies and find that these algorithms can outperform traditional statistical models, thereby offering a relevant addition to the field of economic forecasting.
view the IMF Working Papers-An Algorithmic Crystal Ball: Forecasts-based on Machine Learning
Source: IMF
World Gold Council-Gold Demand Trends Q3 2018
October 31, 2018--Q3 demand steady; up 6.2t y-o-y
Gold demand was 964.3t in Q3, just 6.2t higher y-o-y. Robust central bank buying and a 13% rise in consumer demand offset large ETF outflows.
Bar and coin demand jumped 28% to 298.1t as retail investors took advantage of the lower gold price and sought protection against currency weakness and tumbling stock markets. Jewellery demand rose 6% in Q3 as lower prices caught consumers' attention. A growing number of central bank buyers saw demand in this sector rise 22% y-o-y to 148.4t, the highest level of quarterly net purchases since 2015. Technology registered its eighth consecutive quarter of y-o-y growth, up 1%. Sharp outflows in gold-backed ETFs offset growth across much of the gold market.
Source: World Gold Council (WGC)