The global recovery is strengthening and becoming broader, according to the latest IMF World Economic Outlook for April 2014, but the changing external environment poses new challenges to emerging market and developing economies. In this context, the global economy is still fragile despite improved prospects. Risks still remain, including financial sector reform, high debt levels, stubbornly high unemployment.
For emerging markets, tighter financial conditions and the higher cost of capital could lead to a larger-than-projected slowdown in investment and durables consumption, and thereby slower growth. The growth performance of Sub-Saharan Africa remains robust however, with the IMF forecasting growth of 5.4 percent. For South Africa the forecast for 2014 is 2.3 percent and 2.7 percent for 2015. This is a decrease of 0.5 and 0.6 percent respectively since the last projection in early 2014.
The potential for reversal in capital flows from emerging markets to advanced economies remains, especially with the expected normalization to a more neutral monetary policy stance in the United States. The resultant market volatility could lead to financial turmoil and difficult adjustments in some emerging markets, with a risk of contagion. The IMF’s Outlook notes that foreign investors are becoming less forgiving and so macroeconomic weaknesses are becoming more costly. As monetary policy normalises, it decreases investor tolerance for emerging market risk.
As the effects of the financial crisis slowly diminish, rising inequality is becoming a more central item. Until recently it was not seen as having major implications for macroeconomic developments but this is increasingly being challenged. How inequality affects both the macro economy and the design of macroeconomic policy will likely be increasingly important issues.
This Speaker's Meeting meeting will provide participants with an opportunity to engage Dr Blanchard on the global economic outlook especially as it relates to emerging markets.
‘The Global Economic Outlook and Emerging Markets’, by Dr Olivier Blanchard, Chief Economist, IMF
Date: Tuesday 27 May 2014
Time: 17h00 - 18h30 (followed by refreshments)
Venue: Chalsty Centre at the Oliver Schreiner School of Law Building, West Campus, University of Witwatersrand, Johannesburg.
RSVP: Julie Dunsford by e-mail on Julie.Dunsford@wits.ac.za by no later than Friday, 23 May 2014
Hosted by: the Economic Diplomacy Programme at the South African Institute of International Affairs and the Mandela Institute at the School of Law, University of Witwatersrand
Parking is available nearby the Chalsty Centre at the Law School Building or alternatively close by at the Visitors Parking at the Tower of Light car park. Click here for map and directions to both.
16h30 Arrivals and Registration
17h00 Welcome by Mr Moeletsi Mbeki (SAIIA Deputy Chairperson)
17h10 Keynote address by Dr Olivier Blanchard (Chief Economist, IMF)
17h40 Special remarks by Mr Daniel Sloper (Australia G20 Special Representative)
17h50 Q&A session
18h20 Vote of thanks by Professor Tumai Murombo (Director, Mandela Institute)
Dr Olivier Blanchard is the Chief Economist at the International Monetary Fund (IMF), and Director of the Research Department and Economic Counsellor at the Fund. A citizen of France, Olivier Blanchard has spent most of his professional life in Cambridge, Massachusetts in the United States. After obtaining his PhD in economics at the Massachusetts Institute of Technology in 1977, he taught at Harvard University, before returning to MIT in 1982 where he is Professor of Economics. Professor Blanchard is currently on leave from MIT, as the Economic Counsellor and Director of the Research Department of the International Monetary Fund. He is a macroeconomist, and has worked on a wide set of issues, from the role of monetary policy, to the nature of speculative bubbles, to the nature of the labor market and the determinants of unemployment, to transition in former communist countries. In the process, he has worked with numerous countries and international organisations. He is the author of many books and articles, including two textbooks in macroeconomics, one at the graduate level with Stanley Fischer, one at the undergraduate level. He is a fellow and Council member of the Econometric Society, a past vice president of the American Economic Association, and a member of the American Academy of Sciences.