Though Nepal has very limited effect from the
global economy it is always interesting to see how international institutions
look into economy and what they prescribe for countries. The International
Monetary Fund (IMF) has come out with a policy paper on what should be the
agendas for the period of time ahead. The agendas varies from country to
country. Here, we can see some highlights of those policies and
priorities.
From the policy paper:
Advanced economies -
Macroeconomic policies should remain supportive, with gradual
fiscal
adjustment anchored by credible medium-term plans. The United States needs to
raise
the debt ceiling and agree on a medium-term fiscal adjustment roadmap,
carefully manage
the normalization of financial conditions, and strengthen
appropriate oversight of shadow
banks. The euro area requires more actions
to reduce financial fragmentation and address
architectural issues of the
union, as well as structural reforms to revive growth. In Japan,
reform
success hinges on ambitious fiscal medium-term adjustment and measures to
invigorate growth.
Emerging market economies
- Policy responses to recent financial turbulence should be
anchored by sound and credible monetary policy frameworks. Exchange rates should be
allowed to respond to changes in fundamentals, with buffers used to avoid excessive and
disorderly adjustment. Gradual fiscal consolidation should continue in countries with high
deficits and debt. Removing structural obstacles—including infrastructure deficits and entry
barriers in markets—will be critical to support high growth going forward.
anchored by sound and credible monetary policy frameworks. Exchange rates should be
allowed to respond to changes in fundamentals, with buffers used to avoid excessive and
disorderly adjustment. Gradual fiscal consolidation should continue in countries with high
deficits and debt. Removing structural obstacles—including infrastructure deficits and entry
barriers in markets—will be critical to support high growth going forward.
Note: Nepal is taken as one of the low
income countries
Low-income countries - While
growth has remained resilient in most countries, global
downside risks point to the need for proactive macroeconomic policies. Bolstering foreign
reserves and maintaining domestic fiscal space are priorities. Action on many fronts is
needed to promote inclusive growth.
downside risks point to the need for proactive macroeconomic policies. Bolstering foreign
reserves and maintaining domestic fiscal space are priorities. Action on many fronts is
needed to promote inclusive growth.
Globally - Addressing remaining external
imbalances requires further progress in closing
policy gaps in major economies. Pending regulatory reforms must be completed to ensure
that the global financial system will transition to a safer state.
policy gaps in major economies. Pending regulatory reforms must be completed to ensure
that the global financial system will transition to a safer state.