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Press briefing for the World Economic Outlook Update on Monday, January 19 at 10:30 AM CET (4:30 AM ET), hosted at the Auditorium of the National Bank of Belgium in Brussels.

The rise of fintech lenders has intensified competition in the banking industry. This study utilizes Brazilian bank-level data to examine the causal impact of increased competition on commercial banks’ lending rates and profitability. Employing a bank-specific Bartik exposure, constructed from comprehensive credit and balance sheet information across all Brazilian banks and fintech lenders, the analysis reveals that commercial banks sustained their loan portfolios primarily by lowering lending rates. Specifically, a one standard deviation increase in fintech competition exposure corresponds to a 3.7 percentage point reduction in average lending rates at commercial banks. Banks’ operational efficiency increased due to heightened competition, but their net interest margins narrowed, adversely affecting overall profitability. Between 2018 and 2024, fintech competition is estimated to have lowered banks’ average lending rates by 2.7 percentage points and reduced traditional banks' net interest margins by 0.9 percentage points.

Inflation in Türkiye has been high since 2021. This paper investigates the sources of this inflation and the impact of mitigating exchange rate volatility. Two main findings emerge. First, there has been a significant divergence in inflation dynamics across CPI components since late 2021—in particular, services inflation has exhibited more inertia than goods inflation, a result that stands out in both historical and cross-country contexts. The persistence in services inflation has been generally broad-based, with rental services playing an important role. Second, exchange rate shocks are estimated to have a smaller impact on services inflation than on goods inflation. The peak services inflation response to a nominal exchange rate shock is estimated to be fairly muted, at just one-tenth the size of the shock. Indeed, since mid-2023, there has been an unusually sharp rise in the relative price of services, as goods inflation has been more sensitive to exchange rate movements. These findings suggest that when inflation persistence—especially in services—is relatively high, inflation stabilization may require complementary policies to break inertia beyond a stable currency.

Under dominant-currency pricing—where many export prices are set in dollars—the real exchange rate allocates export windfalls between producers and consumers. When the real exchange rate is stable, rising dollar export revenues pass through nearly one-for-one into higher real local-currency export income, profits, and retained earnings; when it appreciates, part of the windfall accrues to consumers through cheaper imports, compressing exporters' margins. National saving should therefore respond to real local-currency export income—the portion accruing to domestic producers—rather than to dollar receipts per se. Using five-year panels for 42 economies over 1982–2022, we find that the national saving rate rises by about 0.27 percentage points for each 1 percentage point of GDP increase in real local-currency export income, while dollar export income has no independent effect once the local-currency measure is included. Peru versus Brazil during the commodity boom, China's post-WTO export surge, and Argentina's 2002 devaluation validate the mechanism and its timing. A coefficient estimated from 41 countries predicts China's 9.7-percentage-point saving increase (2002–2007) with an error of just 0.1 point. These findings reinterpret the "global saving glut" as the aggregate outcome of export booms whose windfalls accrued disproportionately to high-saving producers when real exchange rates remained stable.

We investigate the factors determining emerging markets’ likelihood to access international capital markets. First, we develop a simple model to outline the theoretical foundations of market access, highlighting the role of risk, spreads, net worth, and the cost of repaying debt. The model also shows a trade-off between risk insurance and moral hazard and underscores the relevance of unconventional instruments such as guarantees and macro-contingent debt. Second, we estimate a random forest model to assess the key predictors of market access. We find that outstanding obligations, reserves, short-term external debt, EMBIG spreads and the size of the economy are key predictors of market access. Important non-linear effects include an inverted U-curve for the effect of spreads on likelihood of issuance; a positive relationship between likelihood of issuance and external debt at low spreads that turns negative at high spreads; and a high sensitivity to governance only for high spreads. Finally, we collect a novel dataset and examine the characteristics of high spread issuances, which are often unconventional and include guarantees, contingencies or collateral, in line with what theory predicts.

Fiat-backed stablecoins are expanding, and their issuers may attain systemic relevance as reserve portfolios grow and as they become increasingly intertwined with financial markets. This paper analyzes the resulting risks and the design choices that can mitigate them. A detailed financial-economics discussion forms the core of the paper. It is paired with a model that captures the feedback loop between a systemic stablecoin and financial markets: redemptions deplete reserves, may prompt asset sales, depress bond market prices, thereby erode a stablecoin issuer’s solvency, and in turn amplify further redemptions. The model links design dials—capital and liquidity buffers, reserve composition, redemption gates, and others—to outcomes such as run frequency, fire sale intensity, and bond market volatility. The economics discussion and model analysis conclude that robust prudential design can substantially stabilize stablecoins and their surrounding market environment.

Economic benefits of financial inclusion, meaning a broadening access of the population to financial services, have been studied extensively, but less is known about its potential effects on financial stability. We explore the complementarity between credit booms and episodes of rapid expansion of the borrower base, or “credit inclusion,” and find that the confluence of both helps to predict future financial distress. Rapid credit inclusion on its own does not usually portend future instability, but it is much more likely to do so when combined with a credit boom. These results can help to enhance the policymaker’s early warning toolbox.

This note provides guidance to country teams on the application of Fund policies and procedures related to data provision to the Fund for surveillance purposes. It provides staff with clear procedures and practical tools for the assessment of data adequacy and guidance on the Fund’s collaborative framework to identify and address data shortcomings, hampering surveillance and support members’ data production and provision capacity. The note operationalizes recent Board reviews of the policies on data provision to the Fund and data adequacy that strengthen the Fund’s ability to conduct robust and evenhanded surveillance by ensuring that data provision keeps pace with evolving analytical and policy needs.

As its reform agenda advances under Oman Vision 2040, Oman has demonstrated strong resilience to heightened global uncertainty, renewed geopolitical tensions, and oil price fluctuations in 2025. Nonhydrocarbon economic activities continue expanding, while inflation remains low. Fiscal and external positions remain solid despite lower oil proceeds. Public sector deleveraging continues. With heightened uncertainty and weaker oil prices, the premium on strengthening resilience and accelerating the country’s economic transformation has increased, underscoring the importance of sustaining the reform momentum.