Selected Issues Papers
IMF Selected Issues Papers are prepared by IMF staff as background documentation for periodic consultations with member countries.
2023
February 27, 2023
Financial Inclusion in Niger: Challenges and Opportunities: Niger
Description: Financial inclusion can increase economic growth and productivity and reduce poverty and inequality by helping people and firms—particularly SMEs—to save and invest, smooth consumption, and better manage financial risks. This paper highlights Niger’s lag compared to other WAEMU countries in terms of access to and use of formal financial services, including for women and youth, and underscores key demand and supply side challenges to financial inclusion as well as structural impediments. It lays out key priorities for Niger to harness the potential of greater financial inclusion to support the country’s development agenda, including efforts to tackle low financial literacy, promote digitization, and address informality.
February 27, 2023
Fostering Export Diversification in Niger: Niger
Description: This selected issue paper investigates the drivers of diversification and explores the potential for fostering diversification in Niger with a focus on horizontal policies. The empirical results from panel regressions indicate that reforms to enhance human capital and the quality of infrastructure, to promote digitalization, to remove barriers to trade and improve governance are likely to yield the largest gains in terms of diversification for Niger.
February 27, 2023
Macroeconomic Gains from Closing Gender Educational Gaps in Niger: Niger
Description: This paper explores the state of gender equality and education attainment of girls in Niger. It also estimates the macroeconomic gains from reducing gaps in education between boys and girls using a micro-founded general equilibrium model. The analysis shows that Niger has made some progress toward higher educational attainment for girls, but the country still lags far behind other sub-Saharan African countries. The results from the general equilibrium model suggest that closing the gender gaps in education would boost female labor participation, increase income earned by women and improve fiscal outcomes. More importantly, closing the gender gap in years of schooling in each income percentile would boost long-term GDP by 11 percent. These significant economic gains from investing in girls’ education will contribute to the achievements of the strategic goals defined under the Programme de Développement Economique et Social (PDES) 2022-26.
February 26, 2023
Hungarian Monetary Policy Operations Before, During, and After the Pandemic: Hungary
Description: Within its inflation-targeting framework, the Magyar Nemzeti Bank (MNB) has frequently adjusted its monetary operations. This has raised questions about their internal consistency, appropriateness, and effectiveness. A broader assessment, implying a comparison to a counterfactual, is outside the scope of this paper. Our prior is agnostic. We find that the changes were generally well-motivated within the MNB statutory powers; prioritized, transparently explained, and monitored; and promptly adjusted, when they no longer served their purpose. Occasionally, some tools have worked at cross purposes. Government policies have at times hampered monetary policy. Simplicity comes with a premium, as complexity can blur signals.
February 26, 2023
Drivers of Inflation: Hungary
Description: Though high and rising inflation has been a challenge for most economies across Europe in 2022 and into 2023, it has accelerated in Hungary to the highest level in Europe. This paper examines how and why Hungary reached historically high inflation. It draws on an augmented Phillips Curve to estimate the impact of common drivers of inflation, examines the role of labor market tightness and policy stances, and analyzes possible changes to the degree of exchange rate pass-through in recent years. Overall, a rapid recovery from the COVID-19 crisis, a series of exogenous shocks, and too loose a policy mix fueled inflation to its highest level in decades. Though monetary and fiscal policies are now tightening, regulatory price caps undermine those efforts. Going forward, a consistently and persistently tight overall policy mix is needed to drive inflation back to the central bank’s target.
February 13, 2023
The Efficiency of Social Spending in Niger: Niger
Description: Despite some progress, poverty remains elevated and education and health outcomes are lagging. This paper finds evidence of inefficiencies in education, health, and social protection spending in Niger. Programs are typically not well-targeted, some are regressive, and there are significant coverage gaps. Improving the living standards of the Nigerien as well as education and health systems, a priority of the government, would require not only scaling up social spending but also strenghtening social protection programs through better targeting, supporting girls’ education, and moving away from general subsidies. Moreover, social assistance should focus more on enhancing productivity and resilience to shocks.
January 20, 2023
Labor Market Implications for Green Investments and Carbon Pricing in Spain: Spain
Description: We provide a tractable framework for assessing the labor market impact of policies that support the green transition of the Spanish economy, taking into account input-output linkages. We present illustrative examples that quantify changes in sectoral employment, occupations and skills stemming from two different green policies: (i) the announced green investments in the recovery plan; and (ii) an increase in carbon pricing and an expansion of the EU Emission Trading System (ETS). Our analysis shows that the labor market impact of these two policies is net positive, although the results depend on the design of the green policies, particularly on the use of the proceeds from the increase in carbon pricing. Strengthening active labor market policies, with a focus on training, and complementing them with education policies such as the expansion of vocational training, would facilitate the transition of workers from shrinking to expanding sectors.
January 20, 2023
Labor Productivity Dynamics in Spain: A Firm-Level Perspective: Spain
Description: This paper uses firm-level data that covers over 1.2 million Spanish firms during the period of 2003-2019 to provide an updated assessment of the drivers of labor productivity in the Spanish economy, focusing on both TFP and firm investment. The empirical analysis shows significant differences in production constraints in both the capital market and the labor market, across firm size and age. This paper also includes a review of Spain’s ambitious reform commitments under the Recovery, Transformation and Resilience Plan and concludes with recommendations for further action.
2022
December 6, 2022
Evaluating Fiscal Rules for Lesotho: Kingdom of Lesotho
Description: A key challenge for Lesotho is the downward rigidity in public expenditure—which increases when SACU transfers are buoyant but fails to be pared back when they fall. Fiscal rules would be of value in Lesotho to help provide constraints on spending and resist political pressure to overspend, while embedding fiscal responsibility within the country’s macro-fiscal framework and ensuring debt sustainability. This paper evaluates options for fiscal rules for Lesotho, discusses the institutional framework required to help underpin a sound fiscal-rule framework, posits a possible fiscal-rule framework for Lesotho, and offers a roadmap to introduce the framework.
December 6, 2022
Addressing Fiscal Pressures: Kingdom of Lesotho
Description: Lesotho’s fiscal situation is challenging. This paper assesses the pressure points of main components of revenues, current spending, and capital spending, and then proposes a growth-friendly consolidation plan while protecting the vulnerable.