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Books and Analytical Papers > IMF Staff Country Reports

You are looking at 1 - 10 of 52 items for :

  • Type: Journal Issue x
  • Wages, Compensation, and Labor Costs: Public Policy x
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Cover IMF Staff Country Reports
Republic of Türkiye: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Türkiye
International Monetary Fund. European Dept.
The 2024 Article IV Consultation highlights that a decisive shift in economic policies over the past year has tightened Türkiye’s overall policy stance. A significant tightening of macroeconomic policy since mid-2023 has substantially reduced crisis risks. Tighter financial conditions are weighing on domestic demand and inflation has fallen. Tax and expenditure measures partly dampened an expansionary fiscal impulse and the commitment to stronger incomes policies has strengthened credibility. The policy turnaround has reduced economic imbalances and revived confidence. Headline inflation has fallen as tighter financial conditions are weighing on domestic demand. Under the authorities’ gradual policy adjustment, inflation is expected to further decline. Risks around the baseline are significant and tilted to the downside. They include stronger-than-expected wage and price inertia, a reversal of capital flows, higher global energy prices, and escalating geopolitical tensions. Significant financial and external vulnerabilities remain. The authorities’ gradual approach to fighting inflation prolongs the period during which risks might occur.
Keywords:
inflation expectation; IFC portfolio implementation; WB program; WBG portfolio; authorities project growth; Inflation; Central bank policy rate; Fiscal stance; Minimum wages; Global
Cover IMF Staff Country Reports
New Zealand: Selected Issues
International Monetary Fund. Asia and Pacific Dept
This Selected Issues paper on New Zealand discusses addressing climate change. projections suggest the gap between New Zealand’s emissions targets and the projected path have narrowed significantly though more needs to be done if the Nationally Determined Contribution for 2030 is to be met. Three critical policy initiatives were introduced in 2022: the first Emissions Reduction Plan and associated emissions budgets were adopted; the National Adaptation Plan was published; and the government proposed its framework for pricing agriculture emissions, which account for around 62 percent of net emissions and are the missing piece in the emissions pricing framework. However, policies intended to address the cost-of-living crisis such as cuts to fuel taxes and duties could have an adverse impact on the feasibility of New Zealand’s emissions targets if prolonged. The heightened policy uncertainty was reflected in carbon prices: after peaking in November 2022, the price in the secondary market declined sharply and the June 2023 average price was around 40 percent below the peak level. The March 2023 Emissions Trading Scheme (ETS) auction failed to clear, resulting in no new units being released. This is a cause for concern: If falling prices are not arrested, the envisaged emissions reductions may be out of reach. Further, as proceeds from the ETS auctions are intended to be used to support climate investments, shortfalls could put these at risk.
Keywords:
wage Phillips Curve; wage growth; wage inflation; wage pressure; min. wage; inflation expectation; Wages; Minimum wages; Climate change; Greenhouse gas emissions; Climate finance; Australia and New Zealand; Global
Cover IMF Staff Country Reports
Luxembourg: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Luxembourg
International Monetary Fund. European Dept.
This 2023 Article IV Consultation highlights that Luxembourg has shown resilience in the aftermath of the war in Ukraine and accelerated tightening of global financial conditions, partly helped by fiscal support. Although costly, the measures have helped temporarily keeping inflation below the levels in most euro area peers and limiting the number of wage indexations. Tighter financial conditions have started to affect the financial sector, with heterogeneity across segments. The financial sector, overall, remains resilient, though there are some pockets of vulnerabilities, especially in the real estate sector and non-bank financial institutions. Growth is expected to slow to about 1 percent in 2023, before gradually recovering to its potential percent over the medium term. Headline inflation is likely to moderate further but core inflation is expected to remain persistent. The near-term outlook is highly uncertain. Risks are tilted to the downside and stem from a deeper global slowdown, a de anchoring of inflation expectations, and systemic financial instability at the global level.
Keywords:
Luxembourg economy; money market rate; policy advice; liability positions vis-a-vis nonresident; central bank of Luxembourg; Inflation; Wage indexation; Mutual funds; Loans; Energy prices; Global; Europe
Cover IMF Staff Country Reports
Luxembourg: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper summarizes the recent literature on the effects of automatic indexation of wages on the economy, including specifically in Luxembourg. It discusses potential pitfalls of the current system and explores some policy options to tackle them and make the system more resilient. With inflation pressure heightening in 2022, applying the mechanism would have entailed several rounds of indexation in a short time span, potentially harming competitiveness. The note discusses conjunctural concerns, drawing on the extensive literature about the cyclical properties of automatic wage indexation (AWI) schemes and the recent decisions taken by the Government to mitigate wage-price spiral and competitiveness risks by transferring some of the cost to public finances. Structural issues with AWI are explored in the context of long-term productivity and real wage trends at the sectoral level. Luxembourg’s practical implementation of the automatic wage indexation hinges on the availability of political will and could erode the country’s fiscal space.
Keywords:
HICP inflation; indexation event; inflation outcome; services inflation; NICP inflation; Inflation; Wage indexation; Wage adjustments; Real wages; Wages; Global
Cover IMF Staff Country Reports
St. Kitts and Nevis: Selected Issues
International Monetary Fund. Western Hemisphere Dept.
This Selected Issues paper reviews anecdotal evidence on labor market conditions and discusses policy options to strengthen the labor market and support growth in St. Kitts and Nevis. The diagnosis of labor market conditions reveals challenges and opportunities in wages, productivity, and labor allocation across sectors. These include strengthening jobs and growth opportunities across sectors, enhancing the wage setting system to support competitiveness, and increasing the efficiency of the public sector. Strong institutions are needed to effectively manage public sector wages over the medium term. Several institutional arrangements can facilitate this goal including regular comparison between public and private sector wages, regular wage negotiations as opposed to ad hoc adjustments, and using medium-term wage bill forecasting to support better fiscal outcomes. Labor market and growth policies could play a key role in strengthening jobs and growth in the post-coronavirus disease era, including by leveraging sectoral linkages to provide more diversified and higher quality job opportunities, enhancing labor market policies, and increasing the efficiency of the public sector.
Keywords:
C. climate change ADAPTATION; labor market diagnosis; staff team of the International Monetary Fund; D. wage policy; Policy implication; Public sector wages; Labor markets; Wages; Employment; Caribbean; Global
Cover IMF Staff Country Reports
Belgium: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Belgium
International Monetary Fund. European Dept.
The 2022 Article IV Consultation discusses that Belgium’s post-pandemic recovery has slowed with spillovers from Russia’s war in Ukraine, high inflation, tighter financial conditions, and elevated uncertainty. In response to the spike of energy prices, the federal and regional authorities provided timely and substantial support to households and firms. Along with automatic indexation of wages and benefits, energy support helped cushion impacts, although at significant cost, increasing the fiscal deficit in 2022 and 2023. The labor market has remained tight, with record-high job creation and low unemployment. The external current account swung to a large deficit in 2022, due largely to higher energy imports and lower vaccine exports. A resilient financial sector is facing challenges from the weaker macro-financial environment. Some important structural reforms took place in 2022. Risks are tilted to the downside, related to escalation of the war in Ukraine and a sharper-than-expected tightening of financial conditions. Lower energy prices would reduce fiscal pressures, and with progress on structural reforms before elections in 2024, boost confidence.
Keywords:
product market reform; indexation mechanism; money market rate; policy reform; consumer confidence; Policy discussion; State secretaries Bertrand; Energy prices; Inflation; Wage indexation; Wages; Anti-money laundering and combating the financing of terrorism (AML/CFT); Global