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Energy & Commodities

Housing Market in Luxembourg

The latest IMF’s report on Luxembourg says: “Against the backdrop of an expanding population, low interest rates and binding supply side constraints, residential real estate price-to-income ratios in Luxembourg have become elevated by historical and global standards (Figure 6). After a marginal decline in 2009, nominal home prices have since increased 30 percent (or 22 percent in real terms), a period over which real disposable income of the local population has been flat, though GDP and employment growth continued.

Supply bottlenecks make housing less affordable to residents. Analysis based on an empirical model of real house prices suggests that real house prices were overvalued before the global financial crisis because house prices were growing significantly faster than a trend (explained by population growth). Since then, their evolution has become more aligned with real GDP and population growth, in spite of the flat disposable income of the resident population while the low interest rate environment has improved their borrowing capacity. This analysis suggests that supply has only partially adjusted to the rapid growth of demand.”

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The latest IMF’s report on Luxembourg says: “Against the backdrop of an expanding population, low interest rates and binding supply side constraints, residential real estate price-to-income ratios in Luxembourg have become elevated by historical and global standards (Figure 6). After a marginal decline in 2009, nominal home prices have since increased 30 percent (or 22 percent in real terms), a period over which real disposable income of the local population has been flat,

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Posted by at 2:03 PM

Labels: Housing

The Informal Economy in Sub-Saharan Africa

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A new IMF Regional Economic Outlook on Sub-Saharan Africa says that “The informal economy is a key component of most economies in sub-Saharan Africa, contributing between 25 and 65 percent of GDP and accounting for between 30 and 90 percent of total nonagricultural employment. While international experience indicates that the share of the informal economy declines as the level of development increases, most economies in sub-Saharan Africa are likely to have large informal sectors for many years to come, presenting both opportunities and challenges for policymakers.”

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A new IMF Regional Economic Outlook on Sub-Saharan Africa says that “The informal economy is a key component of most economies in sub-Saharan Africa, contributing between 25 and 65 percent of GDP and accounting for between 30 and 90 percent of total nonagricultural employment. While international experience indicates that the share of the informal economy declines as the level of development increases, most economies in sub-Saharan Africa are likely to have large informal sectors for many years to come,

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Posted by at 3:24 PM

Labels: Unemployment

Restarting Sub-Saharan Africa’s Growth Engine

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From a new IMF Regional Economic Outlook on Sub-Saharan Africa

“After nearly two decades of strong growth, average economic activity in sub-Saharan Africa has decelerated sharply, against the backdrop of lower commodity prices, a less-supportive global environment, and, in the hardest-hit countries, a delayed policy response (Chapter 1). However, the full picture is more complex, with considerable heterogeneity across countries. Against this backdrop, two related questions arise: How can growth be revived in the hardest-hit countries? And for countries that are still growing fast, how can growth be sustained?

This chapter tries to answer these questions by examining the growth performance of sub-Saharan African countries through the lens of growth turning points and periods of sustained growth episodes using a sample containing data from 1950 to 2016.1 To that effect, the chapter first documents the stylized facts of growth turning points—defined here as growth accelerations (up-breaks) and decelerations (down-breaks)—and sustained growth episodes (growth spells) across the region and vis-à-vis the rest of the world. The chapter then examines the changes in both the external and domestic environment (including policies) that coincided with turning points in sub-Saharan Africa. Finally, the chapter investigates how some episodes of growth acceleration become periods of sustained growth, and what influences the duration of these episodes.”

Continue reading here.

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From a new IMF Regional Economic Outlook on Sub-Saharan Africa

“After nearly two decades of strong growth, average economic activity in sub-Saharan Africa has decelerated sharply, against the backdrop of lower commodity prices, a less-supportive global environment, and, in the hardest-hit countries, a delayed policy response (Chapter 1). However, the full picture is more complex, with considerable heterogeneity across countries. Against this backdrop, two related questions arise: How can growth be revived in the hardest-hit countries?

Read the full article…

Posted by at 3:14 PM

Labels: Macro Demystified

Macroprudential Policy in New Zealand

A new IMF report on New Zealand says that “New Zealand’s mainly LVR-related housing market-specific macroprudential measures would appear to have had some moderating influence on mortgage lending, expected and actual house price growth, and the quality of loan composition. In addition, they have also helped to contain household leverage. However, they do not seem to have prevented a continuous deterioration of borrower households’ vulnerability against debt servicing capacity risks, such as higher interest rates or income shocks.”

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Also, see a separate IMF report on New Zealand’s financial sector, which also discusses the housing market.

A new IMF report on New Zealand says that “New Zealand’s mainly LVR-related housing market-specific macroprudential measures would appear to have had some moderating influence on mortgage lending, expected and actual house price growth, and the quality of loan composition. In addition, they have also helped to contain household leverage. However, they do not seem to have prevented a continuous deterioration of borrower households’ vulnerability against debt servicing capacity risks, such as higher interest rates or income shocks.”

Read the full article…

Posted by at 10:51 AM

Labels: Housing

House Prices in Malaysia

“Risks associated with the housing market appear to be receding. House price growth has moderated, following several years of elevated growth, and risks are circumscribed by ongoing supply constraints, increases in public sector wages, and, from a more structural perspective, Malaysia’s relatively young labor force and urbanizing population. The risk of a sharp decline in house prices should nevertheless be carefully monitored. If rapid house price growth resumes, LTV caps on second and first mortgages could be considered”, says IMF’s latest report on Malaysia.

 

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“Risks associated with the housing market appear to be receding. House price growth has moderated, following several years of elevated growth, and risks are circumscribed by ongoing supply constraints, increases in public sector wages, and, from a more structural perspective, Malaysia’s relatively young labor force and urbanizing population. The risk of a sharp decline in house prices should nevertheless be carefully monitored. If rapid house price growth resumes, LTV caps on second and first mortgages could be considered”,

Read the full article…

Posted by at 1:32 PM

Labels: Housing

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