The Global Financial Crisis: Impact on WAEMU Member Countries and Policy Options
IMF Staff Position Notes, March 18, 2009
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- The Global Financial Crisis: Impact on WAEMU Member Countries and Policy Options
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Bibliographic details
- Authors: Johannes Mueller, Irene Yackovlev, Hans Weisfeld
- Published: March 18, 2009
- Series: IMF Staff Position Notes
- DOI: https://doi.org/10.5089/9781455229017.004
Overview
- Authors: Johannes Mueller, Irene Yackovlev, Hans Weisfeld
- Publication date: March 18, 2009
- Core summary:
- Most WAEMU countries are likely to see economic growth deteriorate over the next two years as a result of the global economic crisis, and some WAEMU countries will be more severely affected by the crisis than others.
- This could have a detrimental effect on efforts to reduce poverty.
- Deteriorating remittances and commodity export prices are projected to negatively affect the WAEMU countries’ external current account deficit and reserves.
- The negative impact should be cushioned by positive terms-of-trade shocks, such as declining import prices for food and fuel products.
- These developments should also help lower inflation pressures, bringing WAEMU inflation closer to its historical level of about 2 percent by 2010.
Economic impact and transmission channels
- Key channels of impact identified:
- Remittances: projected deterioration.
- Commodity export prices: projected decline.
- Terms-of-trade effects: declining import prices for food and fuel offer cushion.
- External current account and reserves: projected negative effects from remittances and commodity export price declines.
- Heterogeneity:
- Some WAEMU countries will be more severely affected than others.
Inflation and terms of trade
- Inflation outlook:
- Lower inflation pressures expected.
- WAEMU inflation projected to move closer to its historical level of about 2 percent by 2010.
- Terms-of-trade shocks:
- Positive shocks from declining import prices for food and fuel products expected to partly offset negative external shocks.
External balances and reserves
- Projected effects:
- External current account deficits: projected to worsen due to deteriorating remittances and commodity export prices.
- Reserves: projected negative impact from the same factors, although cushioned by favorable import-price developments.
Poverty and growth implications
- Growth:
- Economic growth in most WAEMU countries likely to deteriorate over the next two years because of the global crisis.
- Poverty:
- Potential detrimental effect on efforts to reduce poverty.
Policy areas highlighted (as subjects/keywords)
- Fiscal policy and Fiscal stimulus
- Asset and liability management; Government debt management
- Banking: bank balance sheet, bank financing, bank liquidity, bank restructuring strategy, WAEMU bank
- Balance of payments; Current account deficits; trade financing development; WAEMU reserve
- Public financial management (PFM)
- Exchange rate development; price and food price inflation
- Growth potential and financing
Publication metadata (from the content)
- Series: Staff Position Note No. 2009/016
- Issue: 016
- Volume: 2009
- Pages: 16
- DOI: https://doi.org/10.5089/9781455229017.004
- Stock No: SPNEA2009016
- ISBN: 9781455229017
- ISSN: 2617-6742
IMF Staff Position Note: "The Global Financial Crisis: Impact on WAEMU Member Countries and Policy Options", Johannes Mueller, Irene Yackovlev, and Hans Weisfeld, March 18, 2009.
Content in this bundle
- _spn0916 - Executive Summary