Emerging from the Global Crisis: Macroeconomic Challenges Facing Low-Income Countries
Departmental Papers, February 22, 2011
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Bibliographic details
- Published: February 22, 2011
- Series: Departmental Papers
- DOI: https://doi.org/10.5089/9781616350734.087
Key findings and observations
- Although the impact of the global crisis has been severe, real per capita GDP growth stayed positive in two-thirds of low-income countries (LICs), unlike in previous global downturns, and in contrast to richer countries.
- The paper reviews:
- the impact of the crisis on LICs,
- domestic policy responses to the crisis,
- precrisis conditions of select countries,
- prospects and challenges facing LICs.
- The authors "stress-test" LICs' exposure to further volatility using a hypothetical "downside" recovery scenario.
Major themes covered
- Growth prospects for LICs.
- Policy recommendations to support recovery and resilience.
- The general macroeconomic outlook for LICs after the global crisis.
- Rebuilding of fiscal buffers and public debt considerations.
- Balance of payments and current account dynamics in LICs.
- Exchange rate and fiscal stance implications.
Policy recommendations and analytical focus
- Emphasis on domestic policy responses to mitigate crisis impact and support recovery.
- Rebuilding fiscal buffers and strengthening public financial management (PFM).
- Guidance on government debt management and fiscal stance to manage vulnerabilities revealed by the crisis.
- Use of stress-testing (hypothetical downside recovery scenario) to assess exposure to further volatility.
Subject classifications and keywords (as listed)
- Subject: Balance of payments, Current account balance, Fiscal policy, Fiscal stance, Government debt management, Public debt, Public financial management (PFM)
- Keywords: a number of LICs, baseline LIC inflation, Caribbean, current account, Current account balance, DP, DPPP, Eastern Europe, exchange rate, Fiscal stance, Global, Government debt management, IMF staff estimate, LIC WEO projection, Middle East, Policy buffer, real GDP, Sub-Saharan Africa