Overview

  • Updated, October 2016

    If a government wanted to eliminate tuberculosis from a single village, it would need one committed doctor; if it wanted to eliminate tuberculosis from a thousand villages, it would need many committed doctors and one committed macroeconomist. The moment you try to scale things up, you have to make choices that impact the economy as a whole. For example, will you print money to pay for the larger expense? Borrow more? Raise taxes? Any of those decisions would have serious implications on inflation, interest rates, and investment flows, which might hurt the people back in the villages when they try to buy food, get a loan, or find a job. Even if you had the funding, your plans may be derailed by sudden changes elsewhere in the world—like a fall in the international price of the minerals your country exports.

    In other words, your actions are part of a broader context. That context is macroeconomics—the system that connects together the countless policies, preferences, resources, and technologies that make economic development happen. We live in a complex and interconnected world, in which many factors influence the economy of the country as a whole. Without proper macro management, poverty reduction and social equity are just not possible. It is a discipline of billion-dollar decisions that affect the pockets of all of us as individuals.

    Experts within the World Bank Group’s Macroeconomics and Fiscal Management (MFM) Global Practice are working with countries around the world on issues such as taxation, growth strategies, public expenditures, public debt and sovereign wealth funds management. We provide analysis for sound policy making so that governments can develop and nurture their economies, with the aim target of reducing poverty and promoting share prosperity for all its citizens.

  • Updated, October 2016

    The World Bank Group’s Macroeconomics and Fiscal Management unit of the Bank look at macro and fiscal issues through the lens of poverty, structural transformation, long-term development, and the interplay between national and local governments. We offer technical advice (from big, comprehensive reports to short, just-in-time notes), budget financing (to smooth the impact of reforms), and convening power (so reforms can be owned by their stakeholders).  Above all, we are the professional home of 300-plus passionate “Country Economists”, located in over 100 countries, who follow the day-to-day economic realities of each client as much as its historical, political, and social trends. They leverage their deep, sometimes unparalleled, country-specific knowledge with their peers around the world by sharing information, comparing experiences, and identifying best-practices. These economists are “country” and “global” at the same time.

    Our products:

    • We produce over 200 pieces of analytical and advisory services a year.
    • We deliver annually some $7 billion in fast-disbursing loans ($1 billion of which come from our concessional “IDA window”). 
    • We do real-time macro monitoring and country-risk assessments, publishing our trademark “Country Economic Updates” twice a year for most countries. 
    • We aggregate country-based data and information into our global macroeconomic model (“MFMod”), which helps us project world-wide and regional trends, and simulate the impact of unexpected events—like a collapse in oil prices.
    • For countries that struggle with debt, we offer national debt management services.
    • Our most sought-after products include Country Economic Memoranda, Policy Note Collections for Presidential Transitions,Public Expenditure Reviews, Tax Policy Analyses, Job Diagnoses, Global Position Papers, Systematic Country Diagnostics, Global Conferences, Development Policy Loans, Poverty Reduction Support Credits, Heavily Indebted Poor Countries and Multilateral Debt Relief Initiatives, and Subnational Budget Support Operations. 

    We work closely within the World Bank Group as well as with, the International Monetary Fund, the Organization for Economic Co-operation and Development (OECD), regional banks, and bilateral aid agencies.

    Our team provides a one-stop, locally-based, and globally-connected shop for analysis, technical assistance, financing, and innovation in macroeconomic and fiscal management.

  • Updated, October 2016

    The three examples below give a quick but telling glance at our global and country-based products, and how they benefit our clients.

    Calculating the economic impact of Zika to the Latin American region: Even though the outbreak of Zika virus is at an early stage, it is already causing moderate impact on the region. Estimates of the short-term regional economic impact of the epidemic could cost $3.5 billion or 0.06% of the GDP. These estimates are predicated on a swift, coordinated international response to the epidemic as well as on the current assumptions that the most significant health risks – and behaviors to avoid transmission - are for women of child-bearing age, due to the association of cases of Zika virus and children born with microcephaly. However, even under these assumptions, there is a group of countries in the region – those highly dependent on tourism - where the economic impact could be significant and may require additional support from the international community to stem the impact.

    Reforming Vietnam’s fiscal management: Through proper fiscal policy and management Vietnam was able to prioritize government spending to deliver public services in the past 20 years. However, new challenges have emerged in the last few years that have called for reforms to ensure that the State Budget can keep pace with Vietnam’s rapidly changing economy. We provided technical advice and prepared a series of targeted inputs to influence the debate on the amendment of the State Budget Law. Following extensive study and consultation over five years, Vietnam amended its State Budget Law to modernize fiscal management to meet emerging fiscal policy, public service delivery, and government accountability challenges in a fast growing, middle income country.

    Continuing Ethiopia’s great growth run –Ethiopia’s has averaged real GDP growth of 10.9% between 2004 and 2014 which has helped lift the country from second poorest in the region to becoming a middle income country by 2025, if it continues its current growth trajectory. Services and agriculture sectors were the main contributors to this accelerated growth, which was driven by substantial public infrastructure investment and supported by a conducive external environment. To ensure Ethiopia maintains this high growth rate, three policy recommendations have been suggested including continuing sustainably financed infrastructure investment, supporting the private sector through credit markets, and tapping into the growth potential of modernizing the policy framework.

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PHOTO GALLERY

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In Depth

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Macroeconomic Policy

Macroeconomic policy shape the way that capital and labor markets as well as product markets operate.

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Growth

Growth is most effective when it is inclusive and sustainable and provides opportunities to all segments of society.

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Fiscal Policy

Fiscal policy determines the ways in which a government controls its expenditures and taxation.

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Debt

Good debt management is essential to economic development. It is important as developing countries finding it easier to issue debt.

Additional Resources

Contacts

Washington, DC
Yanina Budkin
ybudkin@worldbank.org
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