## Global Shocks Unfolding: Lessons from Fragile and Conflict-affected States

_IMF Working Papers, October 4, 2024_

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## Bibliographic details
- Authors: Jocelyn Boussard, Chiara Castrovillari, Tomohide Mineyama, Marta Spinella, Bilal Tabti, Maxwell Tuuli
- Published: October 4, 2024
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400290824.001

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### Overview and scope
- Investigates consequences of global shocks on a sample of low- and lower-middle-income countries, with a particular focus on fragile and conflict-affected states (FCS).
- Defines FCS as countries that display institutional weakness and/or are negatively affected by active conflict, thereby facing challenges in macroeconomic policy management.
- Examines global shocks associated with commodity prices, external demand, and financing conditions.

### Key findings
- FCS economies are more vulnerable to global shocks compared to non-FCS peers.
- The higher sensitivity of FCS economies is mainly driven by procyclical fiscal responses.
- Procyclical fiscal responses are aggravated by:
  - lack of effective spending controls, and
  - lack of timely access to financial sources.
- External financing serves as a source of stability and partially mitigates the adverse impact of global shocks.
- Conditions of fragility, which are on the rise in many parts of the world, can amplify the effects of negative exogenous shocks.
- Underlying sources of vulnerabilities are diverse and span:
  - fiscal buffers,
  - external buffers,
  - institutional quality, and
  - economic structure.
- Lessons are applicable to a broader set of countries beyond the FCS sample.

### Policy implications and recommendations
- Efficient and timely external financial support from external partners, including international financial institutions, should help countries’ counter-cyclical responses to mitigate adverse shocks and achieve macroeconomic stability.
- Strengthening spending controls and improving timely access to financial sources are implied priorities to reduce procyclicality and vulnerability.

### Publication and metadata
- Authors: Jocelyn Boussard, Chiara Castrovillari, Chiara Castrovillari, Tomohide Mineyama, Marta Spinella, Bilal Tabti, Maxwell Tuuli
- Date: October 4, 2024
- Pages: 40
- Volume: 2024
- Issue: 214
- Series: Working Paper No. 2024/214
- DOI: https://doi.org/10.5089/9798400290824.001
- Stock No: WPIEA2024214
- ISBN: 9798400290824
- ISSN: 1018-5941
- Subject: Commodities, Commodity price fluctuations, Commodity prices, Exports, International trade, Prices, Technology, Technology transfer
- Keywords: Commodity price fluctuations, Commodity prices, Commodity tot shock, decline shock, Exports, external financing, FCS economy, FCS list, FCS peer, Fragile and conflict-affected states (FCS), Global, Global shocks, IMF working papers, low-income countries, shock variable, Sub-Saharan Africa, Technology transfer

*Source: IMF Working Papers — "Global Shocks Unfolding: Lessons from Fragile and Conflict-affected States", October 4, 2024.*

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_Source: https://www.imf.org/en/publications/wp/issues/2024/10/04/global-shocks-unfolding-lessons-from-fragile-and-conflict-affected-states-555906_