Economic Updates and Modeling

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  • Publication
    Tanzania Economic Update, Issue 20: Overcoming Demographic Challenges while Embracing Opportunities
    (Washington, DC: World Bank, 2024-03-12) World Bank
    Tanzania has managed to sustain its growth momentum despite the intensifying effects of climate change. While Tanzania’s economy continues to expand, recent growth has been concentrated in sectors that employ few workers from poor households, limiting its impact on poverty. The Bank of Tanzania (BoT) has implemented an effective monetary policy designed to curb inflation and alleviate mounting short-term demand pressure on foreign exchange. While Tanzania’s recovery continues to accelerate, several serious threats cloud its economic outlook. Key risks include the slow or incomplete implementation of structural reforms, the damaging effects of climate change on the agriculture and tourism sectors, and the possibility of a global recession caused by fiscal and monetary policy tightening in advanced economies and major EMDEs. To mitigate these risks, policymakers must accelerate structural reforms as part of a sustained effort to attract greater private investment and spur resilient and inclusive private-sector-led growth. Over the longer term, one of the country’s key challenges will be to complete its structural economic transformation, which will require creating a more favorable business climate to support the growth of the industrial and services sectors while boosting agricultural productivity. Another key long-term growth challenge will be achieving more balanced and inclusive growth.
  • Publication
    Pacific Economic Update, March 2024: Back on Track? The Imperative of Investing in Education
    (Washington, DC: World Bank, 2024-03-07) World Bank
    In 2023, growth in the Pacific islands (PIC-11) decelerated but remained robust at 5.5 percent—about two and a half times the long-term average. Fiji’s output surpassed pre-pandemic levels in 2023 despite a notable deceleration, with growth rates halving from 20 percent in 2022 to eight percent in 2023. The PIC-11, excluding Fiji, experienced a noteworthy rebound of 2.7 percent growth in 2023, after a 0.5 percent output contraction in 2022. The trajectory of accelerated and sustainable growth in Pacific Island countries depends on a workforce that is well educated and equipped with enhanced skills and capabilities. Boosting education and skills is essential for long-term growth and poverty reduction in the Pacific Island countries. While multiple factors influence learning, once a child enters school, teachers have the largest impact. A robust body of evidence guides policymakers in improving teaching quality and ensuring that all young children acquire strong foundational skills. This report outlines a three-pronged program of action based on this evidence: attracting and recruiting effective teachers, enhancing existing teachers’ capacity, and motivating greater teacher effort. Recognizing that 54 percent of teachers expected to teach in 2035 are already recruited, the report emphasizes a special focus on enhancing the capacity of existing teachers. It provides examples of rigorously evaluated interventions, such as structured pedagogy and access to pre-recorded lectures by highly rated teachers. Implementing these recommendations will aid regional countries in accelerating learning, allowing children and societies to achieve their aspirations.
  • Publication
    Rwanda Economic Update, February 2024: Mobilizing Domestic Savings to Boost the Private Sector in Rwanda
    (Washington, DC: World Bank, 2024-02-28) World Bank
    The Rwanda Economic Update edition 22 reviews the country’s macroeconomic performance and prospects and includes a special section focusing on Mobilizing Domestic Savings to Boost the Private Sector in Rwanda. In 2023, Rwandan economy demonstrated resilience, achieving a 7.6 percent growth in a challenging global environment. This growth was largely attributed to the services sector and sustained domestic demand despite agricultural setbacks and persistent inflation. However, Rwanda faces a challenge in mobilizing domestic savings—critical for private sector investment and achieving the goals outlined in Rwanda’s Vision 2050. While financial inclusion has risen sharply, with significant transitions from informal to formal savings methods, Rwanda’s savings rates remain low compared to regional peers. The government has undertaken measures to incentivize savings, including tax benefits and the introduction of the Ejo Heza long-term savings scheme. These measures have been complemented by an emphasis on financial education, particularly digital literacy, to align with the expansion of digital financial services (DFS). Despite these efforts, substantial potential exists to enhance savings through strategic regulatory reforms. Policymakers should focus on creating an enabling environment for innovation in the financial sector, supporting the integration of non-banks into the payment system, and fostering customer-centric product development. There is also a need to reduce the high costs of remittances, leveraging the East Africa Payment System and engaging the Rwandan diaspora in capital markets. Furthermore, enhancing gender-focused financial services and collecting sex-disaggregated data are essential to address the unique challenges faced by women, particularly in rural areas, and to harness their economic potential. Rwanda’s policy landscape can thus be enriched by targeted interventions to stimulate savings, leveraging the strengths of its growing digital economy, and addressing the financial needs of its population. These efforts, requiring cross-sectoral collaboration, can lead to an inclusive financial system that supports Rwanda’s broader economic development objectives.
  • Publication
    Malawi Economic Monitor, February 2024 - Turning the Corner?: Special Topic: Healthy Watersheds for a Strong Economy
    (Washington, DC: World Bank, 2024-02-28) World Bank
    Watersheds play a crucial role in sustaining the ecosystem, biodiversity, wildlife, agriculture, and human population by serving as the natural resource base for all forms of life. These natural boundaries of river catchments form a mosaic covering the entire land surface of the earth. Watersheds describe areas of land that feed water to a river, draining through the landscape into tributaries and main river channels. This MEM Special Topic examines the opportunities to redirect funds currently allocated for agricultural and forestry inputs toward a more explicit emphasis on watersheds. It explores why a stronger focus on watersheds is important for Malawi, discusses options for financing interventions aimed at rehabilitating the country’s degraded watersheds, and suggests ways to enhance the involvement of the private sector.
  • Publication
    Timor-Leste Economic Report, January 2024 - Fit for Purpose: Crafting a Stable, Inclusive, and Resilient Financial Sector
    (2024-02-26) Rezza, A.A.; Pakpahan, Y.M.; Alibhai, S.
    The final national accounts for 2022 have slightly raised the non-oil growth rate, with consumption driving economic activities. The IX Constitutional Government has an ambitious target of creating some 50 000 jobs over the next five years, but the lack of economic dynamism hinders job creation for rapidly expanding workforce. In response to severe slow budget execution, the new government revised the 2023 budget, decreasing planned expenditure by 12 percent, aligning closely to the actual spending in 2022. For the first nine months of 2023, consumer price inflation remained high at 8.3 percent year-on-year, driven by a notable rise in both food and non-food prices. The growth in money supply has paralleled fiscal expansion, leading to substantial liquidity in the banking sector which remains largely unutilized by the real sector. There have been consistent trade deficits since Q4 2022, reaching 17.1 percent of gross domestic product (GDP) by September 2023.
  • Publication
    Kazakhstan Economic Update, Winter 2023-24 - Shaping Tomorrow: Reforms for Lasting Prosperity
    (Washington, DC: World Bank, 2024-02-14) World Bank
    Kazakhstan’s economic outlook for the next two years is one of steady growth, driven in part from its continued reliance on hydrocarbons and by stronger consumer spending. Real GDP is forecast to grow by 4.5-5 percent in 2025 as the expansion of production capacity in existing oilfields is set to boost exports and spur growth of the petrochemical industry in 2025 and beyond. Elevated inflation is expected to fall, but still remain above the central bank's target in 2024 and 2025. The current account is expected to remain in a deficit at 3.0 and 2.3 percent of GDP in 2024 and 2025, respectively. The deficit is expected to persist in 2024 and decline steadily, while inward foreign direct investment flows are projected to continue, largely destined to the mining sector. The draft budget plan for 2024-26 moves towards fiscal consolidation. The government is planning to gradually decrease the deficit in the medium term in line with the fiscal rule to preserve fiscal buffers. Government debt is sustainable, but debt servicing costs have been increasing, reflecting the reliance on domestic debt in a context of high domestic interest rates. Kazakhstan’s growth outlook faces several downside risks emanating from both domestic and external factors. Russia’s invasion of Ukraine and the resultant tensions in and near the Black Sea could lead to further disruption of Kazakh oil exports via the Caspian pipeline, which would have severe economic and fiscal repercussions given the importance of the hydrocarbons sector. Any major unscheduled maintenance in the oil fields as well as unexpected delay in the development of the Tengiz oil field might curtail production and dampen economic growth. Unforeseen external pressures and volatility of the tenge could lead to higher inflation. Furthermore, given Kazakhstan's economic ties with Russia, the risk of secondary sanctions continues to be a concern, which would dent confidence, deter FDI, and undermine growth. The special section of this Economic Update examines Kazakhstan’s growth challenges and the underlying structural weaknesses and proposes reform priorities for long-term development. Between 2018-22, average GDP per capita growth was 1 percent, well below the average of 3.3 percent for upper middle-income countries. Delivering a better quality of life and higher incomes for citizens in a global context that is committed to decarbonization requires rethinking reform priorities.
  • Publication
    Philippines Economic Update, December 2023: Safe Water and Sanitation for All
    (Washington, DC: World Bank, 2024-02-13) World Bank
    The Philippines Economic Update (PEU) summarizes key economic and social developments, important policy changes, and the evolution of external conditions over the past six months. It also presents findings from recent World Bank analyses, situating them in the context of the country’s long-term development trends and assessing their implications for the country’s medium-term economic outlook. The update covers issues ranging from macroeconomic management and financial-market dynamics to the complex challenges of poverty reduction and social development. It is intended to serve the needs of a wide audience, including policymakers, business leaders, private firms and investors, and analysts and professionals engaged in the social and economic development of the Philippines
  • Publication
    Myanmar Economic Monitor, December 2023: Challenges Amid Conflict
    (Washington, DC: World Bank, 2024-02-12) World Bank
    Economic conditions in Myanmar have deteriorated in the past six months, with the signs of recovery observed in the first half of 2023 proving to be fragile and short-lived. Conflict has escalated across much of Myanmar since October causing displacement, labor shortages, and increased logistics costs. Renewed pressure on the exchange rate and inflation has been triggered by a combination of internal and external developments. Interventions to encourage foreign currency inflows and regulate exchange rates have generally been ineffective in restoring stability, while exacerbating uncertainty and market distortions. Power outages have persisted throughout the year, indicating underlying structural challenges in the energy sector. Against this challenging backdrop, indicators of economic activity have generally deteriorated since mid-2023. Meanwhile, fiscal space remains constrained, with a widening deficit in large part financed directly by the central bank. Household incomes continue to be stretched by the cumulative impact of recent shocks. One coping mechanism that is becoming more common is migration. Outward flows have increased recently due to conflict, declining real incomes, and reduced economic opportunities. In light of these severe challenges, near-term growth prospects have weakened further. Looking beyond these overall economic trends, this edition also provides an in-depth analysis of Myanmar’s garment sector, a key driver of growth and job creation in the economy. As the special topic section of this report shows, Myanmar’s garment industry has significant potential to act as a driver of growth in employment, labor productivity, and incomes, following the path of several other East Asian countries.
  • Publication
    Uganda Economic Update, December 2023: More Effective, Efficient and Equitable Public Spending for Education will Help Uganda Realize its Potential
    (Washington, DC: World Bank, 2024-02-12) World Bank
    The Uganda Economic Update (UEU) analyses economic and structural issues in the Ugandan economy and situates them in a long-term domestic and global context. It is intended for a wide audience, including policymakers, business leaders, financial-market participants, think tanks, non-governmental organizations, and the community of analysts and professionals engaged in the Ugandan economy. The publication intends to foster well-informed policy analysis and debate regarding the key challenges facing Uganda as it strives to achieve inclusive and sustainable economic growth.
  • Publication
    Libya Economic Monitor, Fall 2023
    (Washington, DC: World Bank, 2024-02-12) World Bank
    Libya’s medium-term growth and development challenges are major and pressing. Key among these is to accelerate and stabilize growth: GDP per capita shrank by 54 percent between 2010 and 2022. Furthermore, Libya’s economy was among the most volatile during the past decade due to the conflict, instability, fragmentation, oil export blockades, and weak economic policies. Another challenge is to diversify the economy to make growth more job-rich, more inclusive to women and youth and less intensive in carbon. This could be achieved by strengthening human capital and rebuilding infrastructure. Building a wide, transparent, and effective cash transfer system could bea transformational approach to reform public finances and the public sector and rebuild trust between citizens and the state. Partly linked to the above is the challenge to address the transparency and equitable sharing of oil resources, including to address regional disparities to reduce risks of conflict and fragility in the interest of building a lasting peace. Lastly, the overall institutional and economic policy framework and capacity need to be strengthened to undertake such major transformation.