"Growth Strategies and Diversification in the Pacific Islands Countries" [IMF Working Paper 2025/111]
We examine growth strategies for the Pacific Island Countries (PICs) focusing on the role of tourism and diversification. First, we quantify the contribution of tourism to growth using panel regressions and we compute how much additional tourism would be needed for PICs to sustain comparators’ growth rates. Given the sizable scaling ups in tourism required, we consider the benefits of an alternative growth strategy based on diversification. We identify diversification episodes in the PICs and quantify their benefits using the synthetic control method. Such episodes have had mixed results for PICs. Finally, we outline a framework for designing growth strategies in the PICs, based on diagnosing the binding constraints to their economic expansion and working around these limitations.
"Distributional Implications of Medium-Term Growth Prospects" [April 2024 World Economic Outlook, Chapter 3, Box 3.2]
This box examines the implications of slower GDP growth in three areas: between-country convergence, global inequality, and welfare convergence.
"Market Reforms and Public Debt Dynamics in Emerging Markets and Developing Economies" [IMF Staff Discussion Note 2023/05]
Many emerging market and developing economies face a difficult trade-off between economic support and fiscal sustainability. Market-oriented structural reforms ease this trade-off by promoting economic growth and strengthening public finances. The empirical analysis in this note, based on 62 EMDEs over 1973-2014, shows that reforms are associated with sizeable and long-lasting reductions in the debt-to-GDP ratio mainly through higher fiscal revenues and lower borrowing costs. These effects are larger in countries with greater tax efficiency, lower informality, and higher initial debt. Moreover, a model-based analysis elaborates on how such fiscal gains can be enhanced when revenue windfalls associated with reforms are saved or channeled through higher public investment.
Coverage: IMF Blog "Market Reforms Can Stabilize Debt and Foster Growth in Developing Countries"
"Big Data and High Frequency Surveillance for Pacific Islands Countries: An Application to Solomon Islands." [Solomon Islands: Selected Issues Paper.]
Pacific Islands Countries typically have capacity constraints that prevent them from publishing timely high-frequency data, a key input for macroeconomic surveillance in general and especially during disruptive events, such as social unrest, natural disasters, or a pandemic. This project aims to fill that gap by implementing a simplified version of Arslanalp, Koepke and Verschuur (2021) using satellite-based vessel tracking data from the Automatic Identification System on ships activity to nowcast monthly trade flows. Additionally, we use port activity data to estimate economic disruptions due to social unrest in 2021.
"Market Reforms to Promote Growth and Debt Sustainability" [April 2023 WEO Chapter 3, Box 3.1]
This box previews the findings of the Staff Discussion Note "Market Reforms and Public Debt Dynamics in Emerging Markets and Developing Economies".
“Inclusiveness in Emerging Market and Developing Economies and the Impact of COVID-19 ” [October 2020 World Economic Outlook, Chapter 1, Box 1.2]
This box documents the possible implications of the pandemic for poverty reduction, improvements in life expectancy, and progress toward greater equality in emerging market and developing economies. The number of people in extreme poverty is likely to rise substantially this year, for the first time in more than 20 years, and income inequality, on average, across these economies could rise back to levels seen in 2008, reversing gains since the global financial crisis. Life expectancy is less likely to be affected, although there are downside risks related to the fragile state of health care systems and interruptions in treatments of other life-threatening illnesses.