From global markets to questions of development, money and economic activity.
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Brazil’s incoming Lula administration faced a gap between favorable 2022 revenues and spending cuts that the authors considered unrealistic for 2023. Sergi Lanau, Martín Castellano and Jonathan Fortun assess room to protect Bolsa Familia while maintaining fiscal credibility. Their November 2022 scenarios distinguish a manageable targeted expansion from larger packages that could unsettle markets.
Read the workMarket stress in 2022 challenged the idea that advanced economies had unlimited fiscal room. Robin Brooks, Jonathan Fortun and Jonathan Pingle connect UK bond turmoil, yen depreciation under Japan’s yield cap and Italy’s reliance on the ECB to constraints on government financing. Their November 2022 assessment argues that low interest rates should not be mistaken for unlimited capacity to borrow.
Read the workIdentifying the ultimate owners of ships reveals patterns in Russian energy exports that vessel registration and flags can obscure. In October 2022, Jonathan Fortun and coauthors reported that Greek owners accounted for 55 percent of tanker capacity shipping Russian oil since the invasion of Ukraine, compared with 35 percent in comparable earlier periods. Extending their tracking database to coal also pointed to rising Russian shipments to India and Turkey.
Read the workEnergy and trade shocks changed the currency valuation landscape after Russia invaded Ukraine. Robin Brooks, Jonathan Fortun and Jonathan Pingle extend their October 2022 assessment to emerging markets, identifying overvaluation in the Egyptian pound and Turkish lira alongside substantial undervaluation in the Brazilian real.
Read the workThe timing of a consumption recovery shaped China’s growth outlook in October 2022. Sergi Lanau, Jonathan Fortun and Gene Ma compare earlier and later rebounds after pandemic restrictions, alongside housing weakness and global recession risks. Their scenarios produced a 2023 growth range of 4.3% to 5.5%, with a central forecast of 4.6%.
Read the workChina’s bond outflows persisted beyond the record portfolio withdrawals of early 2022. IIF trackers showed exceptionally large outflows in the second quarter, with selling of local currency bonds exceeding the first quarter; nonresident withdrawals slowed in July without reversing. Central banks accounted for only 10% of first quarter bond outflows, indicating that official reserve managers explained a limited share of the selling.
Read the workReforming Europe’s fiscal rules would not by itself solve the financing problem of peripheral sovereigns. Robin Brooks, Jonathan Fortun and Jonathan Pingle argue in August 2022 that even better estimates of economic slack leave the question of who buys new debt. Their analysis highlights reliance on ECB purchases and the need to bring private investors back.
Read the workExternal bond repayments exposed different financing vulnerabilities in El Salvador and Pakistan in August 2022. Jonathan Fortun and Sergi Lanau projected a Salvadoran funding gap of at least 4% of GDP in the second half, with heavy reserve use expected. Pakistan’s smaller potential gap depended critically on official creditors renewing loans and providing support.
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