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.
Governments can protect vulnerable households, keep businesses open, and preserve price signals without straining public finances
Resilience, supervision, and international coordination are essential to safeguarding global financial markets as new AI tools enable attackers
Fiscal pressures in developing countries make stronger domestic revenue systems more important than ever
Shipping and flight disruptions highlight new fault lines in the global economy and their costs for growth and livelihoods
To weather the shock, policymakers should ensure that any near-term measures are time-bound and targeted at the most vulnerable, and maintain the focus on medium-term development objectives
Countries face vastly different exposure to higher oil prices and supply uncertainty, shaped by whether they import or export, and how much policy space they have to respond
At the request of the Royal Monetary Authority of Bhutan (RMA), an IMF Financial Sector Stability Review (FSSR) mission visited Thimphu, and this technical assistance (TA) report highlights the main FSSR findings. The mission conducted a diagnostic review of the financial sector and proposed a Technical Assistance Roadmap (TARM) to support the authorities’ efforts to strengthen the identification, analysis, and mitigation of risks to financial stability in Bhutan. The RMA has rapidly progressed prudential regulation for the banking sector and must now shift its focus to strengthening supervisory capacity. Non-bank financial institutions play an important role in the financial sector, and with growing digital innovation, it is important authorities develop tailored regulation for the insurance sector and crypto markets, while refining the approach to e-money. Payment systems are advanced with significant progress in modernizing domestic payment systems, but cross-border payments can be improved. More granular collection of financial sector statistics can also support more dynamic tools for analyzing and monitoring systemic risks. The mission’s diagnostic review supports a TA plan. The main recommendations are summarized and the comprehensive TARM is provided in this paper.
The Spanish economy has continued to outperform euro area peers, as a pickup in domestic demand has offset subdued exports. Notwithstanding the impact from the war in the Middle East, growth is projected to remain robust in the near term before slowing further as labor force gains, which have fueled growth in recent years, taper. Risks are predominantly to downside.
This paper develops high frequency trade estimates at the country level by applying nowcasting methodologies to satellite-based big data on vessel movements sourced from IMF PortWatch. The approach provides a timely estimate of monthly trade at the country level that can be produced and released within 7 working days. The paper validates the nowcasting trade estimates against official data for an initial wave of countries representing advanced economies, emerging markets and small island developing states: Brazil, Jamaica, Japan, Samoa, and the United States. The nowcasting methodology produces trade estimates that perform well compared to the official statistics, with the best fit for advanced economies and large emerging markets. The paper identifies key complimentary information to improve the presented nowcasting methodology to develop country trade estimates. The paper also considers an application to estimates of U.S. imports during a period of elevated trade tensions.
This paper investigates why the post-COVID inflation surge, though globally synchronized, led to widely divergent outcomes across countries. Using cross-country regressions for 130 economies and local projections methods for 70 advanced and emerging markets, we analyze the structural, institutional, and policy determinants of post-pandemic inflation dynamics. The results indicate that historical inflation and the scale of domestic energy price shocks account for most of the cross-country variation in cumulative post-COVID inflation. In contrast, many frequently cited country-specific, macroeconomic fundamentals and institutional features exhibit limited power to explain cross-country variation. The association between post-COVID inflation and domestic policy responses is also weak, although endogeneity complicates a clear causal interpretation. The analysis further reveals that pass-through from energy prices to headline inflation intensified markedly in the post-COVID period, particularly in emerging markets, in non-inflation-targeting regimes, and in countries that did not expand fossil fuel subsidies. These findings highlight the asymmetric transmission of supply shocks and underscore the importance of credibility, historical inflation experience, and energy policy design in shaping inflation persistence. Strengthening central bank credibility and anchoring expectations may be essential to bolster resilience against future global supply disruptions.
We study inference via heteroskedasticity in linear models commonly used for macroeconomic policy analysis, where covariate endogeneity must often be addressed with limited time and data. Our framework nests standard heteroskedasticity-based approaches, allows for new non-nested restrictions, and does not require ex-ante regime labelling. We propose an easily implementable weak-identification-robust test and derive sufficient conditions for its validity. Simulation results show good size and power properties in a wide range of settings. Empirical applications to the fuel-price passthrough in Sierra Leone, the effect of remittances on consumption in the Philippines, and exchange-rate passthroughs in many countries illustrate the versatility and scalability of our approach.
Argentina: 2026 Article IV Consultation, Second Review Under the Extended Arrangement Under the Extended Fund Facility, Requests for a Waiver of Nonobservance of a Performance Criterion, Modification of Performance Criteria, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Argentina
This paper empirically reassesses monetary policy transmission in emerging and frontier market economies in Sub-Saharan Africa (SSA EFMs). Using the identification approach of Romer and Romer (2004), we construct measures of monetary policy shocks and provide evidence on transmission mechanisms in the region. We show that monetary policy shocks pass through quickly to short-term market interest rates and lead to persistent increases in bank deposit and lending rates in most economies, indicating an operative bank-based interest rate channel. By contrast, exchange rates generally do not appreciate and, in many cases, depreciate following monetary tightening, consistent with the exchange rate puzzle—suggesting that interest rate hikes alone may be insufficient to systematically influence exchange rate movements. We also find that contractionary monetary policy reduces both output and inflation, with effects that are modest and notably weaker than in more developed economies. In addition, we find that transmission is stronger in economies that have adopted, or are transitioning toward, inflation-targeting regimes. Finally, we show that cross-country heterogeneity in transmission largely reflects differences in monetary policy transparency, financial development, and, to a lesser extent, fiscal dominance.
Governments can protect vulnerable households, keep businesses open, and preserve price signals without straining public finances
Resilience, supervision, and international coordination are essential to safeguarding global financial markets as new AI tools enable attackers
Fiscal pressures in developing countries make stronger domestic revenue systems more important than ever
Shipping and flight disruptions highlight new fault lines in the global economy and their costs for growth and livelihoods
To weather the shock, policymakers should ensure that any near-term measures are time-bound and targeted at the most vulnerable, and maintain the focus on medium-term development objectives
Countries face vastly different exposure to higher oil prices and supply uncertainty, shaped by whether they import or export, and how much policy space they have to respond
At the request of the Royal Monetary Authority of Bhutan (RMA), an IMF Financial Sector Stability Review (FSSR) mission visited Thimphu, and this technical assistance (TA) report highlights the main FSSR findings. The mission conducted a diagnostic review of the financial sector and proposed a Technical Assistance Roadmap (TARM) to support the authorities’ efforts to strengthen the identification, analysis, and mitigation of risks to financial stability in Bhutan. The RMA has rapidly progressed prudential regulation for the banking sector and must now shift its focus to strengthening supervisory capacity. Non-bank financial institutions play an important role in the financial sector, and with growing digital innovation, it is important authorities develop tailored regulation for the insurance sector and crypto markets, while refining the approach to e-money. Payment systems are advanced with significant progress in modernizing domestic payment systems, but cross-border payments can be improved. More granular collection of financial sector statistics can also support more dynamic tools for analyzing and monitoring systemic risks. The mission’s diagnostic review supports a TA plan. The main recommendations are summarized and the comprehensive TARM is provided in this paper.
The Spanish economy has continued to outperform euro area peers, as a pickup in domestic demand has offset subdued exports. Notwithstanding the impact from the war in the Middle East, growth is projected to remain robust in the near term before slowing further as labor force gains, which have fueled growth in recent years, taper. Risks are predominantly to downside.
This paper develops high frequency trade estimates at the country level by applying nowcasting methodologies to satellite-based big data on vessel movements sourced from IMF PortWatch. The approach provides a timely estimate of monthly trade at the country level that can be produced and released within 7 working days. The paper validates the nowcasting trade estimates against official data for an initial wave of countries representing advanced economies, emerging markets and small island developing states: Brazil, Jamaica, Japan, Samoa, and the United States. The nowcasting methodology produces trade estimates that perform well compared to the official statistics, with the best fit for advanced economies and large emerging markets. The paper identifies key complimentary information to improve the presented nowcasting methodology to develop country trade estimates. The paper also considers an application to estimates of U.S. imports during a period of elevated trade tensions.
This paper investigates why the post-COVID inflation surge, though globally synchronized, led to widely divergent outcomes across countries. Using cross-country regressions for 130 economies and local projections methods for 70 advanced and emerging markets, we analyze the structural, institutional, and policy determinants of post-pandemic inflation dynamics. The results indicate that historical inflation and the scale of domestic energy price shocks account for most of the cross-country variation in cumulative post-COVID inflation. In contrast, many frequently cited country-specific, macroeconomic fundamentals and institutional features exhibit limited power to explain cross-country variation. The association between post-COVID inflation and domestic policy responses is also weak, although endogeneity complicates a clear causal interpretation. The analysis further reveals that pass-through from energy prices to headline inflation intensified markedly in the post-COVID period, particularly in emerging markets, in non-inflation-targeting regimes, and in countries that did not expand fossil fuel subsidies. These findings highlight the asymmetric transmission of supply shocks and underscore the importance of credibility, historical inflation experience, and energy policy design in shaping inflation persistence. Strengthening central bank credibility and anchoring expectations may be essential to bolster resilience against future global supply disruptions.
We study inference via heteroskedasticity in linear models commonly used for macroeconomic policy analysis, where covariate endogeneity must often be addressed with limited time and data. Our framework nests standard heteroskedasticity-based approaches, allows for new non-nested restrictions, and does not require ex-ante regime labelling. We propose an easily implementable weak-identification-robust test and derive sufficient conditions for its validity. Simulation results show good size and power properties in a wide range of settings. Empirical applications to the fuel-price passthrough in Sierra Leone, the effect of remittances on consumption in the Philippines, and exchange-rate passthroughs in many countries illustrate the versatility and scalability of our approach.
Argentina: 2026 Article IV Consultation, Second Review Under the Extended Arrangement Under the Extended Fund Facility, Requests for a Waiver of Nonobservance of a Performance Criterion, Modification of Performance Criteria, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Argentina
This paper empirically reassesses monetary policy transmission in emerging and frontier market economies in Sub-Saharan Africa (SSA EFMs). Using the identification approach of Romer and Romer (2004), we construct measures of monetary policy shocks and provide evidence on transmission mechanisms in the region. We show that monetary policy shocks pass through quickly to short-term market interest rates and lead to persistent increases in bank deposit and lending rates in most economies, indicating an operative bank-based interest rate channel. By contrast, exchange rates generally do not appreciate and, in many cases, depreciate following monetary tightening, consistent with the exchange rate puzzle—suggesting that interest rate hikes alone may be insufficient to systematically influence exchange rate movements. We also find that contractionary monetary policy reduces both output and inflation, with effects that are modest and notably weaker than in more developed economies. In addition, we find that transmission is stronger in economies that have adopted, or are transitioning toward, inflation-targeting regimes. Finally, we show that cross-country heterogeneity in transmission largely reflects differences in monetary policy transparency, financial development, and, to a lesser extent, fiscal dominance.
