## eng-october-2018-mcd-reo-cca-presentation

## Source details

**Canonical URL:** [eng-october-2018-mcd-reo-cca-presentation](https://www.imf.org/-/media/files/publications/reo/mcd-cca/2018/november/en/cca/eng-october-2018-mcd-reo-cca-presentation.pdf)

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### A Changing Environment
- Global growth prospects are weakening (slide caption: "Global growth prospects are weakening").
- The recent surge in commodity prices is expected to fade (slide caption: "The recent surge in commodity prices is expected to fade").
- Metals index shown (Index, 2005 = 100) and Crude Oil APSP (US dollars per barrel) presented as projections (charts labeled Oct 17, Apr 18, Current; includes Copper, Aluminum, Iron Ore, Tin, Nickel, Zinc, Lead, and Uranium Price Indices; crude oil: Simple average of three spot prices; Dated Brent, West Texas Intermediate, and the Dubai Fateh).

### Regional Outlook
- Modest growth underway, with some variation across countries (slide caption: "Modest growth underway, with some variation across countries").
- Real GDP Growth presented as weighted average, percent (Oil Exporters / Oil Importers) across 2010-13 through 2020-23 (country codes shown: ARM GE O K G Z T J K; AZE KAZ TKM UZB).
- Improved external and fiscal balances, thanks to higher oil prices and fiscal consolidation (slide caption).
  - Overall Fiscal Balance (Weighted average, percent of GDP) and Current Account Balance (Weighted average, percent of GDP) shown for 2015–16, 2017–18–19, and 20–23, split Oil Exporters / Oil Importers.
  - Note: "For Kazakhstan, the overall fiscal balance excludes the one-time fiscal transfer to the financial sector in 2017."
- Weak banking sectors hold back credit growth (Credit to the Private Sector, Percent of GDP, Index:2014 = 100; Oil Exporters / Oil Importers).
- The region faces multiple and intertwined risks: Commodity prices; Tighter financial conditions; Reform fatigue; Trade tensions & sanctions.

### Exposures and Risks
- Direct impact from trade tensions potentially small, but indirect effects could be large (slide caption).
  - Exports of Goods 2017 shown as Percent of GDP (Oil Exporters / Oil Importers; country codes AZE KAZ TKM UZB ARM GEO KGZ TJK).
  - Exchange rate versus Turkish Lira chart indexed to September 2017 = 100 (Lira Depreciation).
  - Source: IMF DOTS, Haver Analytics and IMF staff calculations.
- Fiscal risks rising in some countries (slide caption).
  - Gross General Government Debt (Percent of GDP) and Syndicated Loans and Bonds Maturing in 2019-23 (Percent of GDP, US$ billion) displayed.
  - Source: National authorities, Dealogic and IMF staff calculations.
  - Charts separate debt in local currency and debt in foreign currency or linked to the exchange rate; public corporations and government shares of credit highlighted.

### Addressing near-term challenges
- External developments will limit monetary policy choices (slide caption).
  - Federal Funds Rate: "Sep-18, 2.25" and "Market Expectations for 2020: 2.72".
  - Exchange rate and inflation changes (Annualized percent change) shown for ARM, GEO, KGZ, TJK, AZE, KAZ, TKM, UZB.
  - Consumer Price Index 2015 data point "-17 (Annualized percent change)" and Nominal Effective Exchange Rate (Annualized percent change, 2015-17) with note "Depreciation 100% pass through".
- Fiscal adjustment should be more equitable and growth-friendly (slide caption).
  - Composition of taxation items (Averages 2017, percent of non-oil GDP) and Composition of expenditure items (Averages 2017, percent of non-oil GDP) displayed for Oil Exporters, Oil Importers, OECDEMsLICs.
  - Note: "Other expenses include defense, consumption of fixed capital, subsidies, grants and other expenses."
- Need to focus on high-quality investment in human and physical capital (slide caption).
  - Sources: EBRD Transition Report 2017-18, IMF FAD Expenditure Assessment Tool (EAT), TIMSS and PISA evaluations, and IMF staff calculations.
  - Note: "TIMSS and PISA scales are different but both are centered around 500 with a standard deviation of 100."
  - Health Efficiency Frontier (Last available value) and Student Performance (Latest Available TIMSS or PISA scores, simple averages) presented.
  - Total Investment Needs, 2018—22 (Percent of GDP per year) shown for Oil Importers, Oil Exporters, EM Europe.

### Higher and More Inclusive Growth
- Catching up will take nearly twenty years at forecast growth rates (slide caption: "Catching up will take nearly twenty years at forecast growth rates").
  - Time to Achieve Emerging Europe or Low-Income Threshold per capita GDP (Years) chart for AZE ARM GEO TKM KAZ TJK KGZ UZB and comparators EM Europe, LIC; labeled "Average".
  - Source: National authorities, United Nations and IMF staff calculations.
- Need to create a more dynamic private sector (slide caption).
  - Credit to Government and Public Non-Financial Sector and Total Credit in 2017 (Percent of total banking credit, in percent of GDP) and Business Entry Density Rate (Number of newly registered firms with limited liability per 1,000 working-age people, average) shown for AZE KAZ UZB ARM GEO KGZ TJK and comparators CCA, LAC, EM Europe.
  - Specific data point displayed: "57.5" (positioned on slide alongside business entry density scale).
  - Source: IMF, International Financial Statistics; and, World Bank Doing Business Report.
- Structural reforms key to boosting private investment (slide caption).
  - Contribution to Real GDP Growth (Simple averages, percentage points) for 00-09, 10-17 and components Private investment / Other / Real GDP growth (percent) for Oil Exporters and Oil Importers.
  - Financial Development (Financial Development Index, 2015) and Rule of Law (From –2.5 (weak) to 2.5 (strong) governance performance, 2016) presented; note: "Index ranges from 0 to 1."

### The IMF’s role and policy implications
- The IMF supports reform via Policy Advice, Fund Financing, and Technical Assistance (Person-Days of Field Delivery).
  - Since 2012: "Six programs" and "Nearly $1 billion dollars lent".
  - Charts show averages for FY2011—15, FY2016, FY2017 and Person-Days for Oil Importers and Oil Exporters.
- Takeaways (slide list):
  - "Growth has recovered, but needs to be higher"
  - "Policy should focus on managing risks in the near term..."
  - "... and reforms to raise growth in the long term"

*Source: eng-october-2018-mcd-reo-cca-presentation (IMF PDF content).*

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_Source: https://www.imf.org/-/media/files/publications/reo/mcd-cca/2018/november/en/cca/eng-october-2018-mcd-reo-cca-presentation.pdf_