Officially recorded remittance flows to low- and middle-income countries (LMICs) are estimated to grow by 1.4% to $656 billion in 2023 as economic activity in remittance source countries is set to soften, limiting employment and wage gains for migrants, according to the World Bank’s latest Migration and Development Brief released on 13 June 2023. This edition of the Brief also revises upwards 2022’s growth in remittance flows to 8%, reaching $647 billion. 

Global growth has slowed sharply and the risk of financial stress in emerging market and developing economies (EMDEs) is intensifying, according to the World Bank’s latest Global Economic Prospects report. In EMDEs other than China, growth is set to slow to 2.9% this year from 4.1% last year. With increasingly high interest rates and restrictive global credit conditions, one out of every four EMDEs has effectively lost access to international bond markets. Growth projections for 2023 are less than half from a year ago, making EMDEs highly vulnerable to additional shocks.

Over 50 per cent of remittances are sent to households in rural areas, where 75 per cent of the world's poor and food-insecure live. Rural households rely on these flows for improving their livelihoods. Globally, the accumulated flows to rural areas over the next five years will reach US$1.5 trillion. This International Day of Family Remittances (16 June) focuses on promoting digital technologies to enhance financial inclusion in low- and middle-income countries (LMICs). The Day also aims at achieving the cost reduction target of 3% as mentioned in the Sustainable Development Goal 10.c.

The IMF reports how recent events have shown central banks can deal with financial stress without compromising their inflation-fighting stance despite trade-offs between price and financial stability.

The overlapping food, health, energy and economic shocks of the past few years have pushed many into poverty and developing countries to the verge of default on their crushing debt burdens. Halfway to the 2030 deadline, financial and industrial transformation to meet the SDGs and close the widening gaps between rich and poor is critical. For UNDP, a reformed financial system that delivers sustainable transformation must include domestic and international tax norms that meet the needs of developing countries. It also requires policies that link private sector profitability to sustainability.

The global economy’s gradual recovery from both the pandemic and Russia’s invasion of Ukraine remains on track. China’s reopened economy is rebounding strongly. Supply chain disruptions are unwinding, while dislocations to energy and food markets caused by the war are receding. Simultaneously, the massive and synchronized tightening of monetary policy by most central banks should start to bear fruit, with inflation moving back towards targets. The IMF forecasts in the World Economic Outlook that growth will bottom out at 2.8 percent this year before rising modestly to 3 percent next year.

People are at the heart of all emissions reduction programs. The World Bank focuses on social inclusion at every stage of result-based climate finance programming — from up-front engagement and investment in communities to enable their participation in emissions reduction activities, to the design and implementation of benefit sharing plans that guide the distribution of results-based payments.

According to the IMF, the global economy is poised to slow this year, before rebounding next year. Growth will remain weak by historical standards, as inflation and Russian war on Ukraine continue.

The global economy is facing heightened risks and financial volatility, with global growth likely to have peaked. Geopolitical factors, trade disputes, financial market volatility and non-economic factors risk further impeding growth, stability and development and worsening poverty, inequality and vulnerabilities. Given the complex and ambitious set of transformations needed, coherence across policy areas is critical, and well-run national development banks can help countries develop financing options for Sustainable Development Goal-related investments. 

A new ILO report shows that the inflationary crisis combined with a global slowdown are reducing the purchasing power of the middle class and hitting low-income households particularly hard.

The world leaders who congregated in Sharm El Sheik for the first two days of COP27 have left and, whilst the climate negotiators get to work, the thematic days of the conference have begun. Wednesday was finance day, with a host of side events around the pavilions discussing the often thorny issues surrounding climate finance. It was also the day that former US Vice-President Al Gore launched a project to provide accurate, granular emissions date, and revealed that, in many cases, emissions are much higher than previously reported. Conor Lennon and Laura cover all this and more, on today’s COP27 podcast.

The shrinking value of the currencies of most developing economies is driving up food and fuel prices in ways that could deepen the food and energy crises already faced by many, according to the World Bank’s latest Commodity Markets Outlook report. Because of currency depreciations, almost 60 percent of oil-importing emerging-market and developing economies saw an increase in domestic oil prices, even as prices decline in U.S. dollar terms.

Governments confront difficult trade-offs amid increases in food and energy prices. IMF discusses how policymakers can help people bounce back from the crisis and better cope with future challenges.

Monetary and fiscal policy in advanced economies risk pushing the world towards recession and prolonged stagnation, inflicting worse damage than the financial crisis in 2008 and the COVID-19 shock in 2020, UNCTAD warns in its Trade and Development Report 2022. According to the report, rapid interest rate increases and fiscal tightening in advanced economies combined with the cascading crises resulting from the COVID pandemic and the war in Ukraine have already turned a global slowdown into a downturn with the desired soft landing looking unlikely.

While consumers' expectations of where prices are going are something that economists have been tracking for a long time, understanding how those expectations are formed provides valuable insight toward controlling inflation. New research by economists Carlo Pizzinelli (IMF), Peter Andre (Briq Institute), Christopher Roth (University of Cologne), and Johannes Wohlfart (University of Copenhagen) shows a surprising divide between what experts think and consumers believe drives inflation and other economic trends. Carlo Pizzinelli is the author of an article in the latest Finance and Development based on the study. In this IMF podcast, Pizzinelli sits down with Journalist Rhoda Metcalfe to discuss how the collective consumer mind influences economic policy. Transcript

Carlo Pizzinelli is an economist in the IMF Research Department.