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.
New policy tracker shows many governments pursuing costly responses to fuel and food price hikes, leaving less room to address future challenges
An overall resilient world economy masks significant differences among countries and regions. Energy importers and countries with limited policy space are most vulnerable
Economic thinking must evolve to account for a shift in how nations pursue security, growth, and influence
As governments intervene more, evidence shows that the benefits are modest and depend on thoughtful design
The region’s central banks have built significant credibility over two decades, anchoring price expectations and bolstering resilience against external shocks
Governments can protect vulnerable households, keep businesses open, and preserve price signals without straining public finances
Housing affordability is high on the economic, social, and political agenda in Europe. While the economic literature has mostly analyzed the drivers of housing unaffordability, this paper focuses on its consequences, quantifying, at the EU level, its impact on individuals’ well-being as well as its economic and demographic impact. We find that the impact of an increase in housing cost burden is large on housing adequacy as well as on poverty and health. It is somewhat smaller on fertility and labor force participation.
How does informality shape the impact of minimum wage policy? We study this question using evidence from Mexico’s 145% real increase in the minimum wage since 2016, together with a general equilibrium model featuring endogenous informality and household heterogeneity. Reduced-form estimates of the implemented increases indicate limited effects on employment and formalization, alongside modest wage gains at the bottom of the formal wage distribution that arguably reflect incomplete enforcement. The calibrated model reproduces these patterns but predicts that, under full enforcement, higher wage floors generate nonlinear effects: the share of firms reallocating toward informality rises sharply, lowering productivity and aggregate welfare. These losses fall disproportionately on low-skill households, who bear the brunt of the reduction in transfers caused by lower tax revenue yet, as predominantly informal workers, gain little directly from the minimum wage. The minimum wage’s effectiveness as a redistributive tool is therefore limited.
In a series of declarations throughout 2025 and into 2026, the United States announced higher tariffs on nearly all imports from most countries. The countries that make up the CAPDR region (Costa Rica, Dominican Republic, Guatemala, Honduras, Nicaragua, Panama and El Salvador) are affected through sizeable direct trade linkages with the United States, and through indirect trade linkages with third countries. This paper explores the potential long-term economic effects of these tariff increases on CAPDR using a multi-region multi-industry model of the global economy. The modelling exercises suggest that CAPDR member countries will experience falls in real GDP to varying degrees, with the severity of the effect closely linked to direct export exposure to the United States. The most vulnerable industries are heavily trade-exposed manufactures, although exemptions – most importantly for textiles & apparel – may provide some scope for trade diversion to offset some of the GDP losses. Although ongoing legal challenges have introduced additional uncertainty regarding the ultimate extent of tariff changes, the results in this paper will remain broadly valid providing the tariffs remain in place.
Cambodia requested technical assistance from the Fiscal Affairs Department regarding the design and implementation of carbon pricing. This is a summary of the technical assistance report and the recommendations provided to the authorities. It first explores the appropriate choice of carbon pricing instrument for Cambodia given key country characteristics, determining a tax to be the favored option, before delving into key design and implementation considerations for such a carbon tax. It undertakes an economic analysis of reform options using the Climate Policy Assessment Tool (CPAT) to estimate impacts of carbon pricing on emission reductions, fossil fuel use and energy prices, fiscal revenue, economic welfare, and distributional impacts on households as well as energy-intensive, trade exposed firms.
The Bangladesh Bank (BB), with IMF support, has made significant progress in developing a modern Forecasting and Policy Analysis System (FPAS). During 2021–25, Phase I of the technical assistance (TA) project focused on building staff capacity and establishing core analytical tools, including a Bangladesh-tailored Quarterly Projection Model (QPM), alongside initial steps toward integrating these tools into policy processes. Phase I successfully laid the technical foundations for forward-looking monetary policy analysis. Further progress will require strengthening institutional arrangements to fully embed FPAS into decision-making, including reinforcing the Forecasting Team, implementing regular forecast cycles, and enhancing the use of model-based narratives in policy deliberations and communication.
The Federal Government of Somalia solicited FAD support to ensure that the country’s petroleum fiscal regime, amid growing interest in oil and gas exploration, is robust from fiscal revenue and investment-attraction perspectives. To this end, a workshop was held in Nairobi in January 2026 with representatives from the Ministry of Finance, Ministry of Petroleum and Mineral Resources, the Somalia Petroleum Authority, the Office of the Prime Minister, and the Parliamentary Budget Office. It offered an opportunity to assess the current legal and fiscal framework governing petroleum activities, identify inconsistencies between existing agreements and legislation, and apply the Fiscal Analysis of Resource Industries (FARI) methodology to quantitatively evaluate Somalia’s fiscal regime. Key findings highlight the need to clarify fiscal terms across existing production sharing agreements, strengthen coordination between the Somalia Petroleum Authority and tax administration, and refine fiscal parameters such as state participation and the R-factor calculation.
[Please note this report is only available in French] An IMF technical assistance mission on Government Finance Statistics (GFS) was conducted in Antananarivo from March 16–20, 2026, to strengthen the compilation and expand the coverage of GFS. The mission focused on the sectoral classification of public sector units, expanding institutional coverage, and consolidation, while emphasizing challenges related to the application of legal criteria and limited access to comprehensive source data. The mission welcomed the adoption of the GFS decree and recommended the establishment of a GFS committee to improve coordination and data sharing, which are essential for producing consolidated statistics in line with international standards.
Hong Kong SAR is facing a sustained decline in labor force participation rate (LFPR), which accelerated in recent years, driven mainly by population aging and further exacerbated by a drop in participation among youth. While the decline in youth LFPR was partly attributable to the mechanical effect of rising share of non-local students in Hong Kong SAR, it also points to postponed labor market entry among the youth which largely reflects continued education. The underlying motivations may suggest shifting job market landscape and labor skill requirements amid structural sectoral shifts, the emergence of artificial intelligence, and more intense labor market competition with increasing labor force educational attainment.
Hong Kong SAR has faced persistent fiscal pressures amid declining fiscal revenue associated with changes in land use (land premiums), reduced stock market initial public offerings, headwinds to corporate profits, and weakness in the labor market. While recent revenue measures have provided partial relief, medium- to long-term pressures from population aging, rising social and healthcare spending, pensions, and large-scale public investment are expected to intensify. Maintaining strong fiscal buffers remains critical for monetary and financial stability. This paper examines options to strengthen revenue mobilization and broaden the tax base to support fiscal sustainability and long-term resilience.
New policy tracker shows many governments pursuing costly responses to fuel and food price hikes, leaving less room to address future challenges
An overall resilient world economy masks significant differences among countries and regions. Energy importers and countries with limited policy space are most vulnerable
Economic thinking must evolve to account for a shift in how nations pursue security, growth, and influence
As governments intervene more, evidence shows that the benefits are modest and depend on thoughtful design
The region’s central banks have built significant credibility over two decades, anchoring price expectations and bolstering resilience against external shocks
Governments can protect vulnerable households, keep businesses open, and preserve price signals without straining public finances
Housing affordability is high on the economic, social, and political agenda in Europe. While the economic literature has mostly analyzed the drivers of housing unaffordability, this paper focuses on its consequences, quantifying, at the EU level, its impact on individuals’ well-being as well as its economic and demographic impact. We find that the impact of an increase in housing cost burden is large on housing adequacy as well as on poverty and health. It is somewhat smaller on fertility and labor force participation.
How does informality shape the impact of minimum wage policy? We study this question using evidence from Mexico’s 145% real increase in the minimum wage since 2016, together with a general equilibrium model featuring endogenous informality and household heterogeneity. Reduced-form estimates of the implemented increases indicate limited effects on employment and formalization, alongside modest wage gains at the bottom of the formal wage distribution that arguably reflect incomplete enforcement. The calibrated model reproduces these patterns but predicts that, under full enforcement, higher wage floors generate nonlinear effects: the share of firms reallocating toward informality rises sharply, lowering productivity and aggregate welfare. These losses fall disproportionately on low-skill households, who bear the brunt of the reduction in transfers caused by lower tax revenue yet, as predominantly informal workers, gain little directly from the minimum wage. The minimum wage’s effectiveness as a redistributive tool is therefore limited.
In a series of declarations throughout 2025 and into 2026, the United States announced higher tariffs on nearly all imports from most countries. The countries that make up the CAPDR region (Costa Rica, Dominican Republic, Guatemala, Honduras, Nicaragua, Panama and El Salvador) are affected through sizeable direct trade linkages with the United States, and through indirect trade linkages with third countries. This paper explores the potential long-term economic effects of these tariff increases on CAPDR using a multi-region multi-industry model of the global economy. The modelling exercises suggest that CAPDR member countries will experience falls in real GDP to varying degrees, with the severity of the effect closely linked to direct export exposure to the United States. The most vulnerable industries are heavily trade-exposed manufactures, although exemptions – most importantly for textiles & apparel – may provide some scope for trade diversion to offset some of the GDP losses. Although ongoing legal challenges have introduced additional uncertainty regarding the ultimate extent of tariff changes, the results in this paper will remain broadly valid providing the tariffs remain in place.
Cambodia requested technical assistance from the Fiscal Affairs Department regarding the design and implementation of carbon pricing. This is a summary of the technical assistance report and the recommendations provided to the authorities. It first explores the appropriate choice of carbon pricing instrument for Cambodia given key country characteristics, determining a tax to be the favored option, before delving into key design and implementation considerations for such a carbon tax. It undertakes an economic analysis of reform options using the Climate Policy Assessment Tool (CPAT) to estimate impacts of carbon pricing on emission reductions, fossil fuel use and energy prices, fiscal revenue, economic welfare, and distributional impacts on households as well as energy-intensive, trade exposed firms.
The Bangladesh Bank (BB), with IMF support, has made significant progress in developing a modern Forecasting and Policy Analysis System (FPAS). During 2021–25, Phase I of the technical assistance (TA) project focused on building staff capacity and establishing core analytical tools, including a Bangladesh-tailored Quarterly Projection Model (QPM), alongside initial steps toward integrating these tools into policy processes. Phase I successfully laid the technical foundations for forward-looking monetary policy analysis. Further progress will require strengthening institutional arrangements to fully embed FPAS into decision-making, including reinforcing the Forecasting Team, implementing regular forecast cycles, and enhancing the use of model-based narratives in policy deliberations and communication.
The Federal Government of Somalia solicited FAD support to ensure that the country’s petroleum fiscal regime, amid growing interest in oil and gas exploration, is robust from fiscal revenue and investment-attraction perspectives. To this end, a workshop was held in Nairobi in January 2026 with representatives from the Ministry of Finance, Ministry of Petroleum and Mineral Resources, the Somalia Petroleum Authority, the Office of the Prime Minister, and the Parliamentary Budget Office. It offered an opportunity to assess the current legal and fiscal framework governing petroleum activities, identify inconsistencies between existing agreements and legislation, and apply the Fiscal Analysis of Resource Industries (FARI) methodology to quantitatively evaluate Somalia’s fiscal regime. Key findings highlight the need to clarify fiscal terms across existing production sharing agreements, strengthen coordination between the Somalia Petroleum Authority and tax administration, and refine fiscal parameters such as state participation and the R-factor calculation.
[Please note this report is only available in French] An IMF technical assistance mission on Government Finance Statistics (GFS) was conducted in Antananarivo from March 16–20, 2026, to strengthen the compilation and expand the coverage of GFS. The mission focused on the sectoral classification of public sector units, expanding institutional coverage, and consolidation, while emphasizing challenges related to the application of legal criteria and limited access to comprehensive source data. The mission welcomed the adoption of the GFS decree and recommended the establishment of a GFS committee to improve coordination and data sharing, which are essential for producing consolidated statistics in line with international standards.
Hong Kong SAR is facing a sustained decline in labor force participation rate (LFPR), which accelerated in recent years, driven mainly by population aging and further exacerbated by a drop in participation among youth. While the decline in youth LFPR was partly attributable to the mechanical effect of rising share of non-local students in Hong Kong SAR, it also points to postponed labor market entry among the youth which largely reflects continued education. The underlying motivations may suggest shifting job market landscape and labor skill requirements amid structural sectoral shifts, the emergence of artificial intelligence, and more intense labor market competition with increasing labor force educational attainment.
Hong Kong SAR has faced persistent fiscal pressures amid declining fiscal revenue associated with changes in land use (land premiums), reduced stock market initial public offerings, headwinds to corporate profits, and weakness in the labor market. While recent revenue measures have provided partial relief, medium- to long-term pressures from population aging, rising social and healthcare spending, pensions, and large-scale public investment are expected to intensify. Maintaining strong fiscal buffers remains critical for monetary and financial stability. This paper examines options to strengthen revenue mobilization and broaden the tax base to support fiscal sustainability and long-term resilience.
