Despite significant progress in recent decades, labor markets across the world remain divided along gender lines. Female labor force participation has remained lower than male participation, gender wage gaps are high, and women are overrepresented in the informal sector and among the poor. In many countries, legal restrictions persist which constrain women from developing their full economic potential. While equality between men and women is in itself an important development goal, women's economic participation is also a part of the growth and stability equation. In rapidly aging economies, higher female labor force participation can boost growth by mitigating the impact of a shrinking workforce. Better opportunities for women can also contribute to broader economic development in developing economies, for instance through higher levels of school enrollment for girls.
The costs of fragility are high, but judicious economic policies can help foster trust and support economic stability and growth
Capital markets integration, expanding opportunities for workers, and bigger consumer markets will allow companies to grow faster
Building foreign exchange reserves requires sound policies and takes time, but global efforts to lower the cost of holding them can help
There are few elegant, easy, or politically attractive ways to reduce debt
Diversification has become harder since 2020 as stocks and bonds tend to move in tandem during sharp selloffs, adding to financial stability concerns
But risks are rising, including from the concentration of tech investment and the negative effects of trade disruptions, which may build over time
Growth slowed sharply in 2025, complicating efforts to reduce the fiscal deficit and put debt on a sustainable path. Meanwhile, structural headwinds related to geoeconomic fragmentation and aging weigh on medium-term growth and raise concerns about Slovakia’s ability to converge to living standards in more advanced EU countries. The key objectives now are to put in place a multi-year strategy for restoring debt sustainability, while implementing structural reforms to strengthen productivity and support medium-term growth.
The paper updates IMF staff views on deposit insurance policy issues, which were last comprehensively addressed in 2006 before the global financial crisis and prior to the international standard. Effective deposit insurance systems must be integrated into the financial safety net, have strong governance arrangements, and adequate funding with a public backstop. Coverage should protect most retail deposits and membership must be mandatory for all banks. Funding targets should be informed by expert judgment, and foreign currency deposits should be insured if widely used. The paper recommends that deposit insurance funds should be available to support the resolution of banks (subject to safeguards), enabling prompt depositor compensation and the continuity of depositor services. It also recommends close coordination with resolution authorities and adopting depositor preference. Key challenges include the need for shorter depositor payout timeframes, the evolution of fintech products, and ensuring credible funding arrangements.
The authorities remain committed to the ECF-supported program focused on fiscal consolidation and strengthening fiscal governance, amid challenges posed by insecurity, poverty, extreme weather events, and their interactions. The economic outlook for 2026–28 is positive with real GDP growth projected at close to 5.0 percent and inflation below target; however, the balance of risks is tilted to the downside.
This public sector pay mission scoped the available data and presents an indicative baseline and scenarios for reform. There is limited room for major increases in personnel spending and careful prioritization is needed. If implemented in 2025, adjustments to pension benefits, expanded military and security sector recruitment, and a higher minimum wage for commercial public institutions would leave limited space, over the forecast horizon, for significant across-the-board increases in real wages.
The IMF-Caribbean Regional Technical Assistance Centre (CARTAC) conducted a technical assistance mission to St. Kitts and Nevis during September 22–October 1, 2025, at the request of the Statistics Division, to support the rebasing of Gross Domestic Product (GDP) and strengthen national accounts statistics. The mission reviewed data sources and compilation methods for production based GDP, identified methodological issues affecting the consistency and transparency of estimates, and assisted in developing preliminary rebased estimates using available data. Key areas of focus included construction, accommodation services, manufacturing activities, and government services, as well as the treatment of contract manufacturing and under coverage adjustments. The mission also provided guidance on improving the use of the Household Budget Survey, the Visitor Expenditure Survey, administrative data, and on strengthening volume measurement. Priority recommendations were formulated to support completion of the rebasing exercise, enhance documentation of sources and methods, and improve the sustainability and quality of St. Kitts and Nevis’s national accounts program.
In light of recent global shocks and rising external volatility, there is a growing need to effectively monitor short-term economic fluctuations, especially in countries with limited access to high-frequency growth data. This paper examines the application of the Bayesian Structural Time Series (BSTS) model to the case of nowcasting quarterly economic growth in Tanzania, leveraging a range of high-frequency economic indicators. The BSTS model provides a flexible framework that incorporates trends, seasonal variations, and regression effects, while its spike-and-slab variable selection helps identify relevant indicators. This paper outlines a framework for model selection and evaluation, including robustness checks and sensitivity analysis, and demonstrate the model’s relative performance. Additionally, the model’s capacity to adapt to longer forecast horizons and dynamic regressors enhances its utility for understanding growth trends in changing economic environments.
This paper estimates debt overhang thresholds separately for 105 countries using a Kalman Filter approach applied to a standard growth model. The results reveal pronounced heterogeneity in the estimated thresholds, both within and across country groups but limited time-variation. In a second step, we explore the structural factors underlying this heterogeneity. The empirical results underscore that a strong payment track record, high quality institutions and governance, public debt composition (currency, maturity, and creditor base), and financial market size and development are associated with higher pubic debt overhang thresholds.
Europe’s defense spending is undergoing a historic shift. With NATO members expected to reach 2% of GDP and discussions underway to increase targets to 5% by 2035, this paper examines the possible macroeconomic consequences of such rearmament using two complementary approaches. First, using an annual panel dataset covering 27 EU countries over the period 1989–2023, we show that past national defense spending has stimulated economic activity in the short term, and entailed sizable cross-border spillovers. Importantly, we find that spending multipliers varied considerably across countries and over time: they tended to be larger when import intensity is low, fiscal space (captured by sovereign yields spread) is ample, and public investment efficiency is high. Second, a novel high-frequency dataset of monthly defense procurement contracts from Opentender, covering EU-27 countries from 2009 to 2023, allows for improved causal identification using fiscal news and instrumental variables based on European aggregate defense procurement and each country’s geographic proximity to major adversaries. The estimates corroborate the positive effects of defense spending on output and show that equipment procurement has the strongest relative impact. Given the larger and more synchronized nature of the current European defense buildup relative to past national episodes in our sample, multipliers might fall below historical estimates, especially if monetary policy is not accommodative.
The costs of fragility are high, but judicious economic policies can help foster trust and support economic stability and growth
Capital markets integration, expanding opportunities for workers, and bigger consumer markets will allow companies to grow faster
Building foreign exchange reserves requires sound policies and takes time, but global efforts to lower the cost of holding them can help
There are few elegant, easy, or politically attractive ways to reduce debt
Diversification has become harder since 2020 as stocks and bonds tend to move in tandem during sharp selloffs, adding to financial stability concerns
But risks are rising, including from the concentration of tech investment and the negative effects of trade disruptions, which may build over time
Growth slowed sharply in 2025, complicating efforts to reduce the fiscal deficit and put debt on a sustainable path. Meanwhile, structural headwinds related to geoeconomic fragmentation and aging weigh on medium-term growth and raise concerns about Slovakia’s ability to converge to living standards in more advanced EU countries. The key objectives now are to put in place a multi-year strategy for restoring debt sustainability, while implementing structural reforms to strengthen productivity and support medium-term growth.
The paper updates IMF staff views on deposit insurance policy issues, which were last comprehensively addressed in 2006 before the global financial crisis and prior to the international standard. Effective deposit insurance systems must be integrated into the financial safety net, have strong governance arrangements, and adequate funding with a public backstop. Coverage should protect most retail deposits and membership must be mandatory for all banks. Funding targets should be informed by expert judgment, and foreign currency deposits should be insured if widely used. The paper recommends that deposit insurance funds should be available to support the resolution of banks (subject to safeguards), enabling prompt depositor compensation and the continuity of depositor services. It also recommends close coordination with resolution authorities and adopting depositor preference. Key challenges include the need for shorter depositor payout timeframes, the evolution of fintech products, and ensuring credible funding arrangements.
The authorities remain committed to the ECF-supported program focused on fiscal consolidation and strengthening fiscal governance, amid challenges posed by insecurity, poverty, extreme weather events, and their interactions. The economic outlook for 2026–28 is positive with real GDP growth projected at close to 5.0 percent and inflation below target; however, the balance of risks is tilted to the downside.
This public sector pay mission scoped the available data and presents an indicative baseline and scenarios for reform. There is limited room for major increases in personnel spending and careful prioritization is needed. If implemented in 2025, adjustments to pension benefits, expanded military and security sector recruitment, and a higher minimum wage for commercial public institutions would leave limited space, over the forecast horizon, for significant across-the-board increases in real wages.
The IMF-Caribbean Regional Technical Assistance Centre (CARTAC) conducted a technical assistance mission to St. Kitts and Nevis during September 22–October 1, 2025, at the request of the Statistics Division, to support the rebasing of Gross Domestic Product (GDP) and strengthen national accounts statistics. The mission reviewed data sources and compilation methods for production based GDP, identified methodological issues affecting the consistency and transparency of estimates, and assisted in developing preliminary rebased estimates using available data. Key areas of focus included construction, accommodation services, manufacturing activities, and government services, as well as the treatment of contract manufacturing and under coverage adjustments. The mission also provided guidance on improving the use of the Household Budget Survey, the Visitor Expenditure Survey, administrative data, and on strengthening volume measurement. Priority recommendations were formulated to support completion of the rebasing exercise, enhance documentation of sources and methods, and improve the sustainability and quality of St. Kitts and Nevis’s national accounts program.
In light of recent global shocks and rising external volatility, there is a growing need to effectively monitor short-term economic fluctuations, especially in countries with limited access to high-frequency growth data. This paper examines the application of the Bayesian Structural Time Series (BSTS) model to the case of nowcasting quarterly economic growth in Tanzania, leveraging a range of high-frequency economic indicators. The BSTS model provides a flexible framework that incorporates trends, seasonal variations, and regression effects, while its spike-and-slab variable selection helps identify relevant indicators. This paper outlines a framework for model selection and evaluation, including robustness checks and sensitivity analysis, and demonstrate the model’s relative performance. Additionally, the model’s capacity to adapt to longer forecast horizons and dynamic regressors enhances its utility for understanding growth trends in changing economic environments.
This paper estimates debt overhang thresholds separately for 105 countries using a Kalman Filter approach applied to a standard growth model. The results reveal pronounced heterogeneity in the estimated thresholds, both within and across country groups but limited time-variation. In a second step, we explore the structural factors underlying this heterogeneity. The empirical results underscore that a strong payment track record, high quality institutions and governance, public debt composition (currency, maturity, and creditor base), and financial market size and development are associated with higher pubic debt overhang thresholds.
Europe’s defense spending is undergoing a historic shift. With NATO members expected to reach 2% of GDP and discussions underway to increase targets to 5% by 2035, this paper examines the possible macroeconomic consequences of such rearmament using two complementary approaches. First, using an annual panel dataset covering 27 EU countries over the period 1989–2023, we show that past national defense spending has stimulated economic activity in the short term, and entailed sizable cross-border spillovers. Importantly, we find that spending multipliers varied considerably across countries and over time: they tended to be larger when import intensity is low, fiscal space (captured by sovereign yields spread) is ample, and public investment efficiency is high. Second, a novel high-frequency dataset of monthly defense procurement contracts from Opentender, covering EU-27 countries from 2009 to 2023, allows for improved causal identification using fiscal news and instrumental variables based on European aggregate defense procurement and each country’s geographic proximity to major adversaries. The estimates corroborate the positive effects of defense spending on output and show that equipment procurement has the strongest relative impact. Given the larger and more synchronized nature of the current European defense buildup relative to past national episodes in our sample, multipliers might fall below historical estimates, especially if monetary policy is not accommodative.
