Miscellaneous Knowledge Notes

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  • Publication
    Drivers of Public Debt in East Asia and Pacific Economies
    (World Bank, Washington, DC, 2022-12-16) Islamaj, Ergys; Samano, Agustin
    Public debt in developing East Asia and Pacific (EAP) economies has increased markedly since the recession in 2020 induced by COVID-19 pandemic. This brief uses standard debt dynamic accounting decomposition to quantify the main drivers of debt accumulation in developing EAP countries since 2000. In the aftermath of the COVID-19 pandemic, larger primary deficits have been the main drivers of the increase in the ratio of public debt to GDP in most developing EAP economies. While strong GDP growth and, to a certain extent, inflation have helped deflate public-debt-to-GDP ratios during the past two decades, they have, on average, been more muted since the COVID-19 shock.
  • Publication
    Vietnam Macro Monitoring
    (World Bank, 2022-12) World Bank
    This brief discusses the economic development of Vietnam for the month of December 2022.The two drivers of economic growth, exports and domestic demand, are moderating. Softer external demand has weighed on Vietnam’s exports. The post-covid consumption rebound also appears to be fading and tighter domestic financial conditions and rising inflation could affect domestic demand going forward. Reflecting weaker external demand, growth of industrial production moderated to 5.3 percent (y/y) in November, the lowest rate since February 2022. CPI inflation reached 4.4 percent (y/y) in November, compared to 4.3 percent recorded a month earlier, with food and housing being two major contributors. Credit growth fell from 16.5 percent (y/y) in October to 15.0 percent (y/y) in November as domestic financial conditions tightened after the State Bank of Vietnam raised key policy interest rates in September and October. The Vietnamese dong gained slightly in value in November 2022 although the dong’s appreciation is one of the smallest compared to major currencies and currencies of its neighbors. As of end November, the national budget registered a 12.1 billion surplus (about 3 percent of GDP). With global financing conditions expected to remain tight and weakening external demand, Vietnamese monetary authorities could consider allowing further flexibility in the exchange rate to absorb changes in the external environment. Fiscal and monetary policy coordination will be critical to ensure price stability in light of accelerating domestic core inflation. A more prudent and prioritized expenditure strategy could focus on ensuring investments in human capital and resilient and green infrastructure to help bolster economic potential and resilience.
  • Publication
    High-Frequency Phone Survey (HFPS) - Phase 2: Sampling Design, Weighting, and Estimation
    (World Bank, Washington, DC, 2022-12) World Bank; United Nations Development Programme
    After implementing Phase 1 of the High-Frequency Phone Survey (HFPS) project in Latin America and The Caribbean (LAC) in 2020, the World Bank conducted Phase 2 in 2021 to continue to assess the socio-economic impacts of the COVID-19 pandemic on households. This new phase, conducted in partnership with the UNDP LAC Chief Economist office, included two waves. Wave 1 covered 24 countries and Wave 2 covered 22 countries. Of these countries, 13 participated in Phase 1 and the rest joined in Phase 2. This document describes the sampling design, weighting and the right procedure to estimate indicators for the LAC HFPS Phase 2 surveys.
  • Publication
    The Road Not Taken?: Responding to the Energy Price Shock in East Asia
    (World Bank, Washington, DC, 2022-11-17) Pollitt, Hector; Islamaj, Ergys; Kitchlu, Rahul; Le, Duong Trung; Mattoo, Aaditya; Mattoo, Aaditya
    Several countries in East Asia have increased fossil fuel subsidies to keep consumer prices lower than currently high international prices. These subsidies are discouraging the shift in consumption away from fossil fuels, while high prices are encouraging investment in new fossil fuel infrastructure. Providing income transfers instead of price subsidies would encourage consumption of cleaner alternatives, while softening the welfare loss. And subsidizing investment in renewables would avert the risk of being locked in to fossil fuels. The total cost need not be higher than that of fossil fuel subsidies.
  • Publication
    Resource Misallocation and Distortions: Some Evidence from East Asia
    (World Bank, Washington, DC, 2022-11-03) de Nicola, Francesca
    Developing East Asia has undergone a dramatic transformation over the past few decades thanks to a combination of policies that fostered outward-oriented and labor-intensive growth, investments in basic human capital, and sound economic governance. However, slowing growth and shifting patterns in global trade, rapid technological change, and evolving country circumstances present challenges to sustaining past productivity growth and ensuring future growth. Thus, understanding the extent of misallocation and its drivers is an important step toward identifying the types of policies that can improve domestic productivity and the competitiveness of firms. This Research and Policy Brief reviews the evidence for East Asian countries and discusses the limitations of current approaches to measuring misallocation.
  • Publication
    Vietnam Macro Monitoring
    (Washington, DC, 2022-11) World Bank
    This brief focuses on the economic development in Vietnam as of November 2022. Industrial production and retail sales moderated in October as both domestic and external demand slowed. Exports growth slowed to a 12-month low of 4.8 percent (y/y) as external demand weakened amid high inflation, tightening global financial conditions, and heightened global uncertainties. FDI commitment bounced back strongly thanks to a jump in greenfield investment in electricity, gas, and water supply while FDI disbursement maintained a robust growth. Despite falling fuel prices, CPI inflation increased from 3.9 percent (y/y) in September to 4.3 percent (y/y) in October, driven by faster rise in food prices, which account for 21.3 percent of the CPI basket. The economy faces strong headwinds. Slowing external demand and tightening global financial conditions are affecting the exchange rate. Rising inflation and tightening domestic financial conditions could affect domestic demand in the coming months. As US Fed is expected to continue raising interest rates, Vietnamese monetary authorities could consider allowing further flexibility in the exchange rate, including through a quicker pace of depreciation of the reference rate. This could be complemented with continued use of reference interest rates, especially if faster depreciation leads to higher inflation and inflation expectations rise. Given the persistence of exchange rate pressures, direct FX sales should be used judiciously to preserve the FX reserves. Fiscal and monetary policy coordination will be critical to ensure price stability in light of accelerating domestic core inflation. Moreover, recent banking sector volatility calls for increased vigilance and intensified supervision efforts.
  • Publication
    Vietnam Macro Monitoring, October 2022
    (Washington, DC: World Bank, 2022-10) World Bank
    This brief focuses on the economic development in Vietnam as of October 2022. Vietnam’s economy registered a strong growth of 13.7 percent (y/y) in Q3-2022 and 8.9 percent (y/y), mostly reflecting a low base effect. Industrial production and retail sales posted another month of high growth rates (13.0 percent (y/y) and 36.1 percent (y/y)), which could be attributed both to strong economic activities and to the low-base effects. Both exports and imports growth moderated in September 2022 due to weakening demand from major export markets. FDI commitment fell in September affected by the heighted uncertainty about the global economic prospects while FDI disbursement continued to improve. While the economic recovery has remained strong, heightened uncertainties related to the slowing global economy, rising domestic inflation, and tightening global financial conditions warrant increased vigilance and policy agility. Given the economy has not fully recovered and growth in main export markets is expected to slow, continued active fiscal policy to support the economy should be closely aligned with economic outcomes and coordinated with monetary policy. At the same time, as CPI and Core CPI are reaching 4 percent, the policy rate set by the authorities, monetary authorities should be ready to considerfurther tightening of monetary policy to ensure inflation remains anchored. Given the end of forbearance and tightening financial conditions, the financial sector faces heightened risks and prompt SBV guidance would help stem materialization of such risks at the sector level, potentially affecting the real economy. The recent turmoil around the Saigon Commercial Bank (SCB) case highlights the need for increased transparency through timely publication of detailed information about the banking sector performance, an enhanced corporate governance, a strengthened risk-based supervision, including supervision of business groups and related party lending and early intervention, and an enhanced bank resolution framework.
  • Publication
    Philippines Monthly Economic Developments: October 2022
    (Washington, DC: World Bank, 2022-10) World Bank
    Headline inflation accelerated in September driven by higher food and energy prices. In addition, core inflation remained elevated, indicating continuing price pressures and strong domestic demand. Robust domestic activity, amid declining COVID-19 cases, contributed to double-digit and broad-based growth of goods imports. Meanwhile, factory output accelerated in August, but goods exports contracted for the second consecutive month amid lingering weakness among main trading partners. Although the unemployment rate remained low in August, underemployment worsened.
  • Publication
    Thailand Monthly Economic Monitor: 23 September, 2022
    (Washington, DC: World Bank, 2022-09-23) World Bank
    The economy picked up in Q3 2022, as mobility, tourist inflows, and employment improved, in line with a projected strengthening domestic recovery in H2. However, goods exports softened due to weakened global demand. Inflation remained the highest among the major ASEAN economies, driven by supply-side factors, while demand-pull pressure remained muted. The authorities responded with social assistance as well as food and fuel subsidies. While the fiscal consolidation path has been largely maintained thus far, additional borrowing to support energy subsidies may be needed. The recently announced average minimum wage increase of 5 percent is intended to help alleviate the pressure of elevated costs on lower income groups. While the magnitude is not large compared to past wage and inflation developments, it may contribute to inflation and underemployment. The Thai baht depreciated due to expectations of the Fed tightening and the widening current account deficit.
  • Publication
    Gender Wage Gap in Thailand
    (Washington, DC, 2022-09) World Bank
    The gender wage gap in Thailand is much less significant than in most countries in the world. The average hourly wage among female workers, in fact, slightly surpasses that of males. This highly equitable gender wage pattern is seen at all levels of the wage distribution. Female representation is also quite equal at all levels of wages; the likelihood of finding females in low-wage jobs is as high as in high-wage jobs. One important factor driving this gender wage parity is the higher educational attainment among female workers.