Increasing government revenue and better managing debt can help foster resilience and accelerate growth
Amid rising geopolitical rifts and trade tensions, global economic uncertainty has surged, yet sentiment about economic prospects remains positive
The region has proved unexpectedly resilient, aided by a front-loading of exports, technology investment, and policy support. To sustain strong and durable growth, it must now rebalance more toward domestic demand and deepen regional integration.
Policymakers should strengthen oversight of nonbank financial intermediaries, whose increasing interconnectedness with banks could exacerbate adverse shocks
Amid trade tensions and high policy uncertainty, the path forward will be determined by how challenges are confronted and opportunities embraced
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Dialing down uncertainty, reducing vulnerabilities, and investing in innovation can help deliver durable economic gains
Risks have risen as financial conditions tightened, with key vulnerabilities ahead
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Policymakers should broaden central clearing and monitor market-making, including by nonbank financial institutions, while dealers must continue to build resilience
Heightened tensions can hurt stock markets, raise government borrowing costs, and pose risks to financial stability
Increased investor risk-taking could fuel vulnerabilities
Amid heightened uncertainty, policymakers will need to deal with complex trade-offs between debt, slower growth, and new spending pressures
Spending more efficiently and reallocating public funds toward investment and innovation can be a powerful growth strategy
Prudent anchors, corrective mechanisms, and supportive institutions can help countries comply with their fiscal rules and commit to sound public finances
Public approval is crucial for carrying out difficult reforms that can help countries lower debt and increase growth
The increase in debt in the last decade points to the need for lowering deficits, rebuilding space to deal with shocks, and strengthening fiscal rules
Large fiscal deficits and elevated debt levels call for greater fiscal prudence, but political forces are pulling in the opposite way
The power-hungry technology requires policies to help expand electricity supplies, incentivize alternative sources, and help contain price surges
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