Commodity prices trended down through most of 2012 and are expected to remain stable in 2013, providing room for a flexible implementation of monetary policy, particularly in emerging market and developing countries.
According to the 2013 Global Monitoring Report (GMR) of the World Bank (WB) and International Monetary Fund (IMF),made available to the Ghana News Agency on Monday, the global economy is expected to recover, but very gradual, while the road to recovery in advanced economies will remain bumpy and involve downside risks.
The report produced jointly by the WB and the IMF, is an annual report card on the world’s progress towards the Millennium Development Goals (MDGs).
It said the global outlook have eased as policy intentions in developed economies have become clearer and commodity prices volatility has abated.
It said although, important short-and medium-term down-side risks remain – including adjustment fatigue in advanced economies and over-investment and high asset prices in emerging market are now more symmetric.
It said a broadly appropriate current policy stance in emerging market and developing countries is supporting continued strong growth in these countries.
The GMR report said: “Were the downside risk of a protracted global slowdown extending through 2015 to materialised, it will have a significantly negative impact on growth in low-income countries and their ability to attain the MDGs.”
It noted that despite sustained economic growth, progress in rebuilding policy buffers in low-income countries has been modest; declaring that “ indeed, with policy buffers not yet restored to levels preceding the 2009 crisis and against the backdrop of reduced traditional sources of financing, most low-income countries will likely need to undertake adjustments in the face of such a shock.
The report said differences across countries are large, however, still-high international commodity prices are proving commodity exporters with relatively larger buffers than commodity-importing countries.
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