Abdulazeez Kuranga, Author at Gifted Analysts

How the Pandemic Widened Global Current Account Balances

By Abdulazeez KurangaPosted on August 3, 2021Posted in Africa & World EconomyTagged BOP, Consumption, Current Account, External Sector, GDP, Pandemic, TradeNo Comments

2020 was a year of extremes. Travel all but ceased for a period. Oil prices wildly fluctuated. Trade in medical products reached new heights. Household spending shifted to consumer goods rather than services and savings ballooned as people stayed home amid a global shutdown.

In our latest External Sector Report we found that the global reaction to the pandemic further widened global current account balances—the sum of absolute deficits and surpluses among all countries—from 2.8 percent of world GDP in 2019 to 3.2 percent of GDP in 2020. Those balances are set to widen further as the pandemic continues to rage in much of the world.

Drawing Further Apart: Widening Gaps in the Global Recovery

By Abdulazeez KurangaPosted on July 28, 2021Posted in Africa & World EconomyTagged COVID-19, Growth, IMF, Nigeria, Outlook, United States, Vaccines, WEONo Comments

The global economic recovery continues, but with a widening gap between advanced economies and many emerging market and developing economies. Our latest global growth forecast of 6 percent for 2021 is unchanged from the previous outlook, but the composition has changed.

Growth prospects for advanced economies this year have improved by 0.5 percentage point, but this is offset exactly by a downward revision for emerging market and developing economies driven by a significant downgrade for emerging Asia. For 2022, we project global growth of 4.9 percent, up from our previous forecast of 4.4 percent. But again, underlying this is a sizeable upgrade for advanced economies, and a more modest one for emerging market and developing economies.

Taming Market Power Could (also) help Monetary Policy

By Abdulazeez KurangaPosted on July 21, 2021Posted in AgenciesTagged Central Bank, COVID-19, Economy, Expectation, Inflation, investment, Monetary PolicyNo Comments

Some central banks are currently debating whether to tighten monetary policy to fight inflationary pressures, after having eased decisively in response to the COVID-19 shock. In making such decisions, central bankers have to consider how much businesses and consumers will respond. The structure of the financial system and the future expectations of consumers and businesses are key drivers of how effective monetary policy actions will be. Yet there’s another, overlooked, driver: corporate market power.

Four Facts about Soaring Consumer Food Prices

By Abdulazeez KurangaPosted on June 24, 2021Posted in AgenciesTagged COVID-19, CPI, Food, Food prices, Inflation, Pandemic, Prices, Supply Chain, TariffNo Comments

Rising world food prices for producers are making headlines and causing concerns among the public. The most recent data show a moderation in consumer food price inflation globally, but as we explain below, that could change in the coming months. This would only add to the high prices that consumers in many countries already lived through last year.

How to Attract Private Finance to Africa’s Development

By Abdulazeez KurangaPosted on June 15, 2021Posted in Africa & World EconomyTagged Africa, Finance, IMF, investment, NigeriaNo Comments

High public debt levels and the uncertain outlook for international aid limit the scope for growth through large public investment programs. The private sector will have to play more of a role in economic development if countries are to enjoy a strong recovery and avoid economic stagnation. Heads of state from Africa made this one of their resounding messages during the recent summit on “Financing African Economies” held in Paris in May.

A Proposal to End the COVID-19 Pandemic

By Abdulazeez KurangaPosted on May 21, 2021Posted in Africa & World Economy, AgenciesTagged COVAX, COVID-19, GAVI, investment, Pandemic, Supply, Vaccine, WHO, World BankNo Comments

Many countries have stepped up in the global fight against the pandemic, as have institutions such as the World Health Organization, the World Bank, Gavi (the Global Alliance for Vaccines and Immunization), the African Union, and others.

Yet, more than a year into the COVID-19 crisis, new cases worldwide are higher than ever. Urgent action is needed to arrest the rising human toll and economic strain.

2021 IMF Free Courses for you

By Abdulazeez KurangaPosted on May 13, 2021Posted in TrainingTagged Courses, economics, EDX, IMFNo Comments

IMF is pleased to announce these free online courses on the edX platform starting in May, including its new course on Inclusive Growth (IGx). All courses have a single deadline at the end of dates below, many ending on August 31 and some ending April 15, 2022.

Why Soaring Stocks Could Be Bad News For The Economy

By Abdulazeez KurangaPosted on May 12, 2021Posted in Africa & World EconomyTagged Bond, Boom, Economy, Equities, Fixed Income, GDP, Growth, Inflation, StocksNo Comments

While it’s had some ups and downs, the stock market has soared to historic heights in recent years. For many, that’s great news: it’s a sign that the economy and their retirement accounts are doing really well. For Jan Eeckhout, however, the booming stock market is a sign that there’s something deeply wrong with the economy.

Sure, the economist says, he has a retirement account with stocks, and he personally benefits from the ongoing bonanza on stock exchanges. But the rocket ride of the stock market is powered by the exploding profits of increasingly powerful corporations. Their increasingly ridiculous profits, he says, are eating the income of the vast bulk of workers and hurting the overall economy. That notion is the central thesis of his forthcoming book, The Profit Paradox: How Thriving Firms Threaten the Future of Work.

Commercial Real Estate at a Crossroads

By Abdulazeez KurangaPosted on March 29, 2021Posted in Business & FinanceTagged IMF, Offices, Properties, Real estate, REAL ESTATE AND HOUSING SECTORNo Comments

Empty office buildings. Reduced store hours. Unbelievably low hotel room rates. All are signs of the times. The containment measures put in place last year in response to the pandemic shuttered businesses and offices, and dealt a severe blow to the demand for commercial real estate—especially, in the retail, hotel, and office segments.

Beyond its immediate impact, the pandemic has also clouded the outlook for commercial real estate, given the advent of trends such as the decline in demand for traditional brick-and-mortar retail in favor of e-commerce, or for offices as work-from-home policies gain traction. Recent IMF analysis finds these trends could disrupt the market for commercial real estate and potentially threaten financial stability.

A Beginner’s Guide to CBN’s Ways and Means to the Federal Government of Nigeria

By Abdulazeez KurangaPosted on January 26, 2021Posted in EconomyTagged Borrowing, cbn, Deficit, Expenditure, FGN, Fiscal Policy, Fiscal Revenue, Ways and Means2 Comments

CBN’s financing of the FGN deficits seems to be a structural one and not a one-off event. This is because historical data has shown that the CBN has been financing a huge part of the FGN deficits even when there was no economic downturn. For example, out of the total fiscal deficit of N3.64 trillion in 2018, the CBN financed 52.2%. In 2019, the total fiscal deficit was N4.23 trillion and the CBN financed 78.3% or N3.31 trillion of that amount. There was no downturn during those periods, hence it goes against economic theory for the CBN to be printing money to finance significant proportions of the FGN’s fiscal deficit.

Author: Abdulazeez Kuranga