Euro Area Policies: 2025 Annual Consultation-Press Release; Staff Report; and Statement by the Executive Director for Member Countries
July 11, 2025
Despite recurring shocks, Europe’s economy remains resilient with record-low
unemployment, declining inflation, and a stable financial system. However,
policymakers face mounting challenges, including trade tensions, rising demand for
defense spending, and the need to ensure energy security, all while addressing longstanding
productivity challenges, rapid aging, and weak medium-term growth.
Togo: Second Review Under the Arrangement Under the Extended Credit Facility, Requests for Waiver of Nonobservance of a Performance Criterion, Modification of Performance Criteria, Extension of the Arrangement, and Rephasing of Access-Press Release; Staff Report; and Statement by the Executive Director for Togo
July 11, 2025
Following the shocks of recent years starting with the COVID-19 pandemic,
fiscal expansion helped preserve robust growth but also pushed up Togo’s public debt
and contributed to a temporary drawdown of foreign exchange reserves in the West
African Economic and Monetary Union (WAEMU), while progress on the sustainable
development goals has slowed.
The Impact of Debt and Deficits on Long-Term Interest Rates in the US
July 11, 2025
We present new evidence on the impact of fiscal variables on long-term interest rates and term premia in the United States. To alleviate endogeneity problems, we follow the seminal methodology by Laubach (2009) and resort to long-term projections of interest rates and fiscal variables. After incorporating an additional 20 years of data into our sample, the estimated effects of debt and deficits on interest rates show little change from Laubach’s findings. However, we show that the link between longterm rates and fiscal variables is not stable over time. It was close to zero during the years of relative fiscal prudence around the turn of the century and it has been increasing since fiscal positions have started to deteriorate markedly.
Decrypting Crypto: How to Estimate International Stablecoin Flows
July 11, 2025
This paper presents a novel methodology—leveraging a combination of AI and machine learning to estimate the geographic distribution of international stablecoin flows, overcoming the “anonymity” of crypto assets. Analyzing 2024 stablecoin transactions totaling $2 trillion, our findings show: (i) stablecoin flows are highest in North America ($633bn) and in Asia and Pacific ($519bn). (ii) Relative to GDP, they are most significant in Latin America and the Caribbean (7.7%), and in Africa and the Middle East (6.7%). (iii) North America exhibits net outflows of stablecoins, with evidence suggesting these flows meet global dollar demand, increasing during periods of dollar appreciation against other currencies. Further, we show that the 2023 banking crisis significantly impeded stablecoin flows originating from North America; and finally, offer a comprehensive comparison of our data to the Chainalysis dataset.
Navigating Weather Shocks: Challenges and Investing to Strengthen Agriculture Resilience in Namibia
July 11, 2025
Namibia’s arid climate makes it highly susceptible to severe weather shocks. The prolonged drought in 2023–24 caused a sharp decline in crop yields and exacerbated food insecurity. This paper documents Namibia’s vulnerabilities to future weather shocks, including droughts and changes in rainfall patterns, discusses potential economic and fiscal implications, and explores public investment strategies. Investing in agricultural resilience, including water infrastructure, drought-resistant crops, and farmer insurance schemes, can mitigate climate-induced economic losses and improve food security.
Namibia: Labor Markets and Resource Dependence
July 11, 2025
With high unemployment, especially among the youth, Namibia lags behind the SSA region on labor market outcomes. Between 2012 and 2018, there was a structural shift in the economy from agriculture to services, as younger workers took up low-productivity service sector jobs. A shift-share analysis highlights that resources are not allocated to relatively more productive firms in the services sector, consistent with the weak real GDP per capita growth. The ongoing oil and gas exploration (and potential production in the future) offers an opportunity for economic growth and job creation, but also presents risks of worsened labor market outcomes.
Credit Developments and Macro-Financial Risks in Namibia: Namibia
July 11, 2025
This chapter examines the evolution of bank credit in Namibia over the past two decades. It highlights notable trends and the composition of credit growth, with a particular focus on the private sector. Additionally, it identifies potential macro-financial vulnerabilities and provides policy recommendations to mitigate associated risks. Furthermore, it underscores the importance of promoting access to credit by businesses.