Ohnsorge, Franziska

Person:
Ohnsorge, Franziska

Office of the Chief Economist, South Asia Region, The World Bank

Fields of Specialization

International macroeconomics, Financial sector policy

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Office of the Chief Economist, South Asia Region, The World Bank

Last updated: April 21, 2025

Biography

Franziska Ohnsorge is the World Bank Chief Economist for South Asia. In this role, she is responsible for leading the research program on key economic issues in South Asia to inform the policy debate and World Bank lending. Before starting this position, she was the Manager at the Development Economics Vice Presidency where she spearheaded the flagship Global Economic Prospects report. Prior to joining the World Bank, Franziska Ohnsorge worked in the Office of the Chief Economist of the European Bank for Reconstruction and Development and at the International Monetary Fund. Her research has been featured in peer-reviewed journals as well as policy publications and has covered a wide range of topics in international macroeconomics and finance, including debt and financial crises, inflation and monetary policy, as well as growth and informal labor markets. Her work has been widely cited, including in the Economist, the Wall Street Journal, and the Financial Times. She holds a Ph.D. from the University of Toronto.

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Publication Search Results

Now showing 1 - 10 of 40

Bridging the Gap: Revenue Mobilization in South Asia
(Washington, DC: World Bank, 2025-04-21) Kruse, Hagen; Ohnsorge, Franziska; Tourek, Gabriel; Xie, Zoe Leiyu
This paper examines tax revenue shortfalls in South Asian countries. On average during 2019–23, South Asian revenues totaled 18 percent of GDP—well below the average 24 percent among emerging market and developing economies (EMDEs). Econometric estimates from stochastic frontier analysis, which control for tax rates and the size of potential tax bases, suggest that tax revenues in the region are 1 to 7 percentage points of GDP below potential, with shortfalls in five of the region’s eight countries larger than in the average EMDE. Even after controlling for country characteristics, such as widespread informal economic activity outside the tax net and large agriculture sectors, sizable tax gaps remain, suggesting the need for improved tax policy and administration. The paper discusses and provides evidence from international experience with reforms to raise government revenues.
Jobless Development
(Washington, DC: World Bank, 2024-09-26) Ohnsorge, Franziska; Rogerson, Richard; Xie, Zoe Leiyu
Analyses of GDP per capita differences across countries focus almost exclusively on differences in productivity. This paper shows that there are also large differences in medium-run dynamics in the employment-to-population ratio. The paper finds a general tendency for productivity growth to be negatively correlated with changes in the employment to population ratio for a large sample of EMDEs—a phenomenon described using the term jobless development in this paper. The paper also shows that there are large differences in the steady state levels of the employment to population ratios that countries are converging to. There are also countries that experience substantial increases in their employment-to-population ratio during the development process. Using a two-stage procedure, the paper studies this issue in a large sample of EMDEs. In the first stage, the paper estimates differences in steady-state employment ratios across countries. In the second stage, it documents which institutional and policy factors are correlated with steady-state employment ratios. The paper finds particularly large differences across countries in steady-state employment ratios for women. Fewer legal protections of women’s rights are associated with lower steady-state employment ratios for women, without an offsetting positive effect for men.
Forecasting Industrial Commodity Prices: Literature Review and a Model Suite
(World Bank, Washington, DC, 2023-11-28) Arroyo-Marioli, Francisco; Khadan, Jeetendra; Ohnsorge, Franziska; Yamazaki, Takefumi
Almost two-thirds of emerging market and developing economies rely heavily on resource sectors for economic activity, fiscal and export revenues. In these economies, economic planning requires sound baseline projections for the global prices of the commodities they rely on and a sense of the risks around such baseline projections. This paper presents a model suite to prepare well-founded forecasts for the global prices for oil and six industrial metals (aluminum, copper, lead, nickel, tin, and zinc). The model suite adapts six approaches used in the literature and tests their forecast performance. Broadly speaking, futures prices or bivariate correlations performed well at short horizons, and consensus forecasts and a large-scale macroeconometric model performed well at long horizons. The strength of Bayesian vector autoregression models lies in generating forecast scenarios. The sizable forecast error bands generated by the model suite highlight the need for policy makers to engage in careful contingency planning for higher or lower prices.
Global Waves of Debt: Causes and Consequences
(Washington, DC: World Bank, 2021-03-02) Kose, M. Ayhan; Nagle, Peter; Ohnsorge, Franziska; Sugawara, Naotaka
The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.
Understanding the Global Drivers of Inflation: How Important Are Oil Prices?
(World Bank, Washington, DC, 2023-01) Ha, Jongrim; Kose, M. Ayhan; Ohnsorge, Franziska; Yilmazkuday, Hakan
This paper examines the global drivers of inflation in 55 countries over 1970–2022. The paper estimates a Factor-Augmented Vector Autoregression model for each country and assess the importance of several global (demand, supply, and oil price) and domestic shocks. It reports three main results. First, global shocks have explained about 26 percent of inflation variation in a typical economy. Oil price shocks accounted for only about 4 percent of inflation variation, but they had a statistically significant impact on inflation in three-quarters of the countries. Second, global shocks have become more important in driving inflation variation over time. The share of inflation variance caused by oil price shocks increased from 4 percent prior to 2000 to roughly 9 percent during 2001–22. They also accounted for some of the steep runup in inflation between mid-2021 and mid-2022. Third, oil price shocks tended to contribute significantly more to inflation variation in advanced economies, countries with stronger global trade and financial linkages, commodity importers, net energy importers, countries without inflation-targeting regimes, and countries with pegged exchange rate regimes. The headline results are robust to a wide range of exercises—including alternative measures of global factors and oil prices—and aggregation of countries.
What Has Been the Impact of COVID-19 on Debt? Turning a Wave into a Tsunami
(World Bank, Washington, DC, 2021-11) Kose, M. Ayhan; Nagle, Peter; Ohnsorge, Franziska; Sugawara, Naotaka
This paper presents a comprehensive analysis of the impact of COVID-19 on debt, puts recent debt developments and prospects in historical context, and analyzes new policy challenges associated with debt resolution. The paper reports three main results. First, even before the pandemic, a rapid buildup of debt in emerging market and developing economies—dubbed the “fourth wave” of debt—had been underway. Because of the sharp increase in debt during the pandemic-induced global recession of 2020, the fourth wave of debt has turned into a tsunami and become even more dangerous. Second, five years after past global recessions, global government debt continued to increase. In light of this historical record, and given large financing gaps and significant investment needs in many countries, debt levels will likely continue to rise in the near future. Third, debt resolution has become more complicated because of a highly fragmented creditor base, a lack of transparency in debt reporting, and a legacy stock of government debt without collective action clauses. National policy makers and the global community need to act rapidly and forcefully ensure that the fourth wave does not end with a string of debt crises in emerging market and developing economies as earlier debt waves did.
From Financial Development to Informality: A Causal Link
(World Bank, Washington, DC, 2022-09) Capasso, Salvatore; Ohnsorge, Franziska L.; Yu, Shu
Financial development reduces the cost of accessing external financing and thus incentivizes investment in higher-productivity projects that allow firms to expand to the scale needed to operate in the formal economy. It also encourages participants of the informal sector to join the formal sector to gain access to credit and financial services. This paper documents two findings. First, countries with less pervasive informality are associated with greater financial development. Second, the impact of financial development, and especially banking sector development, on informality is causal. This causal link is established using a novel instrumental variable for domestic financial development: financial development in other (neighboring) countries. The causal link between informality and financial development is stronger in countries with greater trade openness and capital account openness. The findings are robust to alternative specifications.
Adding Fuel to the Fire: Cheap Oil during the COVID-19 Pandemic
(World Bank, Washington, DC, 2020-07) Wheeler, Collette Mari; Baffes, John; Kabundi, Alain; Kindberg-Hanlon, Gene; Nagle, Peter S.; Ohnsorge, Franziska
The outbreak of COVID-19 and the wide-ranging measures needed to slow its advance triggered an unprecedented collapse in oil demand, a surge in oil inventories, and a record one-month decline in oil prices in March 2020. This paper examines the likely implications of the 2020 oil price plunge for emerging market and developing economies. It presents four main results. First, the record plunge in oil prices was predominantly driven by demand factors as wide-ranging measures to stem the pandemic precipitated an unprecedented collapse in oil demand, but the surge in oil inventories also exerted downward pressure on oil prices. Second, this latest oil price decline was preceded by six previous plunges over the past half-century, during which energy exporters and importers suffered similar initial output losses (about 0.5 percent) that were unwound within three years. Third, the current episode of low oil prices holds limited promise to boost the global economy amid widespread restrictions and narrow room for fiscal support in energy-exporting emerging market and developing economies. Fourth, many emerging market and developing economies entered the current public health crisis with precarious fiscal positions; current low oil prices are thus an opportunity to review energy-pricing policies, including remaining energy subsidies, to mobilize domestic resources.
A Decade After the Global Recession: Lessons and Challenges for Emerging and Developing Economies
(Washington, DC: World Bank, 2021-03-18) Kose, M. Ayhan; Ohnsorge, Franziska; Kose, M. Ayhan; Ohnsorge, Franziska; Arteta, Carlos; Celik, Sinem Kilic; Ha, Jongrim; Kasyanenko, Sergiy; Koh, Wee Chian; Lakatos, Csilla; Ruch, Franz Ulrich; Sugawara, Naotaka; Taskin, Temel; Terrones, Marco E.; Ye, Lei Sandy; Yu, Shu
This year marks the tenth anniversary of the 2009 global recession. Most emerging market and developing economies weathered the global recession relatively well. However, following a short-lived initial rebound in activity in 2010, the global economy and, especially, emerging market and developing economies, have suffered a decade of weak growth despite unprecedented monetary policy accommodation and several rounds of fiscal stimulus in major economies. A Decade After the Global Recession provides the first comprehensive stock-taking of the decade since the global recession for emerging market and developing economies. It reviews the experience of emerging market and developing economies during and after the recession. Many of these economies have now become more vulnerable to economic shocks. The study discusses lessons from the global recession and policy options for these economies to strengthen growth and be prepared should another global downturn occur.
Inflation in Emerging and Developing Economies: Evolution, Drivers and Policies
(Washington, DC: World Bank, 2019) Ha, Jongrim; Kose, M. Ayhan; Ohnsorge, Franziska; Ha, Jongrim; Kose, M. Ayhan; Ohnsorge, Franziska; Ivanova, Anna; Laborde, David; Lakatos, Csilla; Martin, Will; Matsuoka, Hideaki; Montiel, Peter J.; Panizza, Ugo; Pedroni, Peter; Stocker, Marc; Unsal, Filiz D.; Vorisek, Dana; Yilmazkuday, Hakan
Emerging market and developing economies, like advanced economies, have experienced a remarkable decline in inflation over the past half-century. Yet, research into this development has focused almost exclusively on advanced economies. This book fills that gap, providing the first comprehensive and systematic analysis of inflation in emerging market and developing economies. It examines how inflation has evolved and become synchronized among economies; what drives inflation globally and domestically; where inflation expectations have become better-anchored; and how exchange rate fluctuations can pass through to inflation. To reach its conclusions, the book employs cutting edge empirical approaches. It also offers a rich data set of multiple measures of inflation for a virtually global sample of countries over a half-century to spur further research into this important topic.