{
  "title": "As Demand Improves, Time to Focus More on Supply",
  "publication": "IMF Blog, April 8, 2014",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2014/04/08/as-demand-improves-time-to-focus-more-on-supply",
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  "summary": "World growth forecast: 3.6 percent this year and 3.9 percent next year, up from 3.0 percent last year.",
  "sections": [
    {
      "heading": "Recovery and Growth Forecasts",
      "content": "- World growth forecast: 3.6 percent this year and 3.9 percent next year, up from 3.0 percent last year.\n- Advanced economies: growth forecast to reach 2.2 percent in 2014, up from 1.3 percent in 2013.\n- United States: growth forecast to be 2.8 percent in 2014.\n- United Kingdom: growth forecast to be 2.9 percent in 2014.\n- Germany: growth forecast to be 1.7 percent in 2014.\n- Japan: growth forecast to be 1.4 percent in 2014; fiscal stimulus has played a large role and recovery strength depends on private demand.\n- Euro area southern periphery: for the first time in two years, forecast to have positive growth (described as low); exports generally strong but internal demand still weak.\n- Emerging and developing economies: growth forecast to reach 4.9 percent this year, slightly up from 4.7 percent last year.\n  - China: growth forecast of 7.5 percent.\n  - India: growth forecast of 5.4 percent.\n  - Sub Saharan Africa: growth forecast of 5.4 percent."
    },
    {
      "heading": "Evolving Macroeconomic Environment and Risks",
      "content": "- Key improvements noted:\n  - Fiscal consolidation is slowing.\n  - Investors are less worried about debt sustainability.\n  - Banks are gradually becoming stronger.\n  - Normalization of monetary policy—both conventional and unconventional—is now on the agenda.\n- Recovery remains uneven; brakes are loosened at different paces across countries.\n- External environment for emerging markets:\n  - Stronger growth in advanced economies implies increased demand for exports.\n  - Normalization of U.S. monetary policy implies tighter financial conditions and a tougher financial environment.\n  - Foreign investors are less forgiving; macroeconomic weaknesses are more costly.\n  - Financial bumps like those seen last summer and earlier this year may recur.\n- Residual and acute risks:\n  - Japan needs \"all three arrows\" to sustain growth and maintain fiscal sustainability.\n  - Adjustment and recovery in southern Euro countries are not guaranteed, especially if Euro area inflation remains very low or turns to deflation.\n  - Financial reform is incomplete and the financial system remains at risk (as discussed in the Global Financial Stability Report).\n  - Geopolitical risks have arisen but have not yet had global macroeconomic repercussions."
    },
    {
      "heading": "Supply-Side Focus: Three Core Points and Policy Implications",
      "content": "- Overarching message: As demand conditions improve, policy focus must increasingly shift to the supply side.\n\n- Point 1 — Low potential growth in many advanced economies:\n  - Consequence: Low potential growth makes fiscal adjustment more difficult.\n  - Policy responses suggested:\n    - Rethink the shape of some labor market institutions.\n    - Increase competition and productivity in a number of non-tradable sectors.\n    - Rethink the size of the government.\n    - Reexamine the role of public investment.\n\n- Point 2 — Potential growth in emerging markets:\n  - Observation: Evidence is not yet clear, but potential growth in many emerging market economies appears to have decreased.\n  - Country distinctions:\n    - In some countries (e.g., China), lower growth may partly reflect a desirable byproduct of more balanced growth.\n    - In other countries, there is scope for structural reforms to improve outcomes.\n  - Implication: Structural reforms in emerging markets deserve attention to raise potential growth where needed.\n\n- Point 3 — Rising inequality as a forthcoming macroeconomic theme:\n  - Trend: As effects of the financial crisis diminish, rising inequality may come to dominate.\n  - Implication: How inequality affects the macroeconomy and the design of macroeconomic policy will likely become increasingly important on the policy agenda for a long time."
    },
    {
      "heading": "Ancillary",
      "content": "- Embedded video referenced: http://www.youtube.com/watch?v=2GEVhrMD5K4\n\nSource: Olivier Blanchard, April 8, 2014 — \"As Demand Improves, Time to Focus More on Supply\" (IMF blog).\n\n---\n\n Content in this bundle\n\n- 需要は改善、供給サイドをより重視すべき: オリビエ・ブランシャール iMFdirect ブログ 2014年4月8日掲載\n  - 需要は改善、供給サイドをより重視すべき: オリビエ・ブランシャール iMFdirect ブログ 2014年4月8日掲載 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 需要は改善、供給サイドをより重視すべき: オリビエ・ブランシャール iMFdirect ブログ 2014年4月8日掲載 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Спрос улучшается, пришло время уделять больше внимания предложению\n  - Спрос улучшается, пришло время уделять больше внимания предложению (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Спрос улучшается, пришло время уделять больше внимания предложению (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- عربي\n- October 2013 World Economic Outlook\n- World Economic Outlook\n\nSource: https://www.imf.org/en/blogs/articles/2014/04/08/as-demand-improves-time-to-focus-more-on-supply"
    }
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    "Authors: Olivier Blanchard",
    "Published: April 8, 2014",
    "World growth forecast: 3.6 percent this year and 3.9 percent next year, up from 3.0 percent last year.",
    "Advanced economies: growth forecast to reach 2.2 percent in 2014, up from 1.3 percent in 2013.",
    "United States: growth forecast to be 2.8 percent in 2014.",
    "United Kingdom: growth forecast to be 2.9 percent in 2014.",
    "Germany: growth forecast to be 1.7 percent in 2014.",
    "Japan: growth forecast to be 1.4 percent in 2014; fiscal stimulus has played a large role and recovery strength depends on private demand.",
    "Euro area southern periphery: for the first time in two years, forecast to have positive growth (described as low); exports generally strong but internal demand still weak.",
    "Emerging and developing economies: growth forecast to reach 4.9 percent this year, slightly up from 4.7 percent last year.",
    "Key improvements noted:",
    "Recovery remains uneven; brakes are loosened at different paces across countries.",
    "External environment for emerging markets:",
    "Residual and acute risks:",
    "Overarching message: As demand conditions improve, policy focus must increasingly shift to the supply side.",
    "Point 1 — Low potential growth in many advanced economies:",
    "Point 2 — Potential growth in emerging markets:",
    "Point 3 — Rising inequality as a forthcoming macroeconomic theme:",
    "Embedded video referenced: http://www.youtube.com/watch?v=2GEVhrMD5K4",
    "**需要は改善、供給サイドをより重視すべき: オリビエ・ブランシャール iMFdirect ブログ 2014年4月8日掲載**",
    "**Спрос улучшается, пришло время уделять больше внимания предложению**",
    "[عربي](http://blog-montada.imf.org/?p=2879)",
    "[October 2013 World Economic Outlook](http://www.imf.org/external/pubs/ft/survey/so/2013/NEW100813A.htm)",
    "[World Economic Outlook](http://www.imf.org/external/pubs/ft/survey/so/2014/RES040814A.htm)"
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