Macrofinancial Linkages and Growth at Risk in the Dominican Republic

Macrofinancial Linkages and Growth at Risk in the Dominican Republic PDF

Author: Olga Bespalova

Publisher: International Monetary Fund

Published: 2019-11-13

Total Pages: 19

ISBN-13: 1513520083

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This paper uses the Growth-at-Risk (GaR) methodology to examine how macrofinancial conditions affect the growth outlook and its probability distribution. Using this approach, we evaluate risks to GDP growth in the Dominican Republic using quarterly data for 1996-2018. We group macrofinancial conditions in five principal determinants, based on 32 indicators. The Dominican Republic’s growth distribution appears most vulnerable to negative shocks to domestic financial conditions, domestic leverage, domestic demand, and external demand, with additional repercussions from the external cost of borrowing in the longer run. Our findings show that domestic monetary policy plays a particularly important role in reducing growth vulnerabilities when the economy is weak.

Dominican Republic

Dominican Republic PDF

Author: International Monetary

Publisher: International Monetary Fund

Published: 2022-07-08

Total Pages: 104

ISBN-13:

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As in the past, the Dominican Republic’s dynamic economy continued to show remarkable resilience to shocks, rebounding strongly from the impact of the pandemic. Sound policies, a nimble vaccination campaign and a well-attuned reopening—including international travel—allowed the economy to make the most of the global rebound. The recovery has been broad based; GDP was about 5 percent above pre-pandemic levels as of end-2021. The country maintained sound market access and benefitted from Fund support through the Rapid Financing Instrument (RFI).

Macrofinancial Linkages

Macrofinancial Linkages PDF

Author: Mr.Christopher W. Crowe

Publisher: International Monetary Fund

Published: 2010-08-25

Total Pages: 617

ISBN-13: 1589069390

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Macrofinancial linkages have long been at the core of the IMF's mandate to oversee the stability of the global financial system. With the advent of the economic crisis, the Fund has drawn on this research in order to contribute to critical debates on the nature of appropriate policy responses at both the national and multilateral levels. The current juncture offers a good opportunity to take stock of this body of research by IMF staff and to share it with a wider audience, particularly since few collections have been published in this area. This volume brings together some of the best writing by IMF economists on macrofinancial issues, and highlights the issues and approaches that have guided IMF thinking in an area that makes up an increasingly important component of the IMF's overall remit. The chapters in the volume fit into three broad themes: financial crises and boom-bust cycles; financial integration, financial liberalization, and economic performance; and policy issues relating to macroeconomic policy and the corporate and financial sectors-including domestic and external financial liberalization.

Growth at Risk: Concept and Application in IMF Country Surveillance

Growth at Risk: Concept and Application in IMF Country Surveillance PDF

Author: Mr.Ananthakrishnan Prasad

Publisher: International Monetary Fund

Published: 2019-02-21

Total Pages: 39

ISBN-13: 1484397010

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The growth-at-risk (GaR) framework links current macrofinancial conditions to the distribution of future growth. Its main strength is its ability to assess the entire distribution of future GDP growth (in contrast to point forecasts), quantify macrofinancial risks in terms of growth, and monitor the evolution of risks to economic activity over time. By using GaR analysis, policymakers can quantify the likelihood of risk scenarios, which would serve as a basis for preemptive action. This paper offers practical guidance on how to conduct GaR analysis and draws lessons from country case studies. It also discusses an Excel-based GaR tool developed to support the IMF’s bilateral surveillance efforts.

Macro-Financial Linkages in Shallow Markets

Macro-Financial Linkages in Shallow Markets PDF

Author: International Monetary Fund. African Dept.

Publisher: International Monetary Fund

Published: 2018-07-23

Total Pages: 53

ISBN-13: 1484361490

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This paper assesses and disseminates experiences and lessons from low-income countries (LICs) in Sub-Saharan Africa that were selected by the Africa Department in 2015-16 as pilots for enhanced analysis of macro-financial linkages in Article IV staff reports. The paper focuses on the common characteristics across the pilot countries and highlights the tools used in the analysis, the challenges encountered, and the solutions deployed in overcoming them.

Global Waves of Debt

Global Waves of Debt PDF

Author: M. Ayhan Kose

Publisher: World Bank Publications

Published: 2021-03-03

Total Pages: 403

ISBN-13: 1464815453

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The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.

Panama

Panama PDF

Author: International Monetary Fund. Western Hemisphere Dept.

Publisher: International Monetary Fund

Published: 2019-01-17

Total Pages: 74

ISBN-13: 1484394011

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Panama has had the longest and fastest economic expansion in recent Latin American history. The economy has expanded at an average rate of about 6 percent per annum over the last quarter of a century, with Panama achieving one of the highest per capita income in Latin America. More recently, GDP grew by about 51⁄2 percent in 2017 (driven by the expanded Canal), and then slowed to 33⁄4 percent (y/y) in H1-2018. Inflation remained subdued, reaching almost 1 percent (y/y) in September 2018. The external current account deficit stayed at 8 percent of GDP in 2017, mostly covered by FDI. The fiscal position continued to be strong, with the overall deficit of the non-financial public sector (NFPS) at about 11⁄2 percent of GDP. Credit growth has decelerated as financial conditions have started to tighten.

Dominican Republic

Dominican Republic PDF

Author: Ms.Svetlana Cerovic

Publisher: International Monetary Fund

Published: 2016-10-17

Total Pages: 37

ISBN-13: 1475545495

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This paper examines the financial position of the key sectors of the Dominican Republic. It contributes to macroeconomic surveillance by identifying financial interlinkages and vulnerabilities through the balance sheet approach. The balance sheet of the economy has been weakening, particularly in foreign currency, due to persistent fiscal deficits. Risks arising from weaker foreign currency position, however, seem to be mitigated by long-term maturities on government debt and increasing accumulation of foreign currency assets. Given the strong links of the rest of the economy with the public sector, network analysis suggests that while the financial position of the other sectors of the economy is stronger, they could be adversely affected in an external stress scenario. Exposures to public sector are particularly pronounced in the domestic financial system (directly) and households (indirectly, through pension funds).

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