Targeted Implementable And Practical Energy Relief Measures For Households In Europe PDF Download
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| Author | : Mr. Nicolas Arregui |
| Publisher | : International Monetary Fund |
| Total Pages | : 24 |
| Release | : 2022-12-16 |
| Genre | : Business & Economics |
| ISBN | : |
Download Targeted, Implementable, and Practical Energy Relief Measures for Households in Europe Book in PDF, ePub and Kindle
The recommended way of helping households during the ongoing European energy crisis is to allow price signals to operate freely while providing targeted compensation to the vulnerable. In practice, however, institutional, political, and technical constraints have led many European governments to adopt broad, price-suppressing measures, which impede the adjustment in demand, have high fiscal costs, and widen cross-country gaps in prices. This paper focuses on easy-to-implement, second-best policies. Bonuses or rebates on energy bills (that are not linked to the current volume of consumption) or block tariffs are simple options which would improve on the current policy design in many countries. To avoid stoking inflation, fiscal policy should not add to aggregate demand, so relief for energy bills should be targeted and coupled with offsetting fiscal measures. One option is to reclaim the relief from the better-off through income taxation, which would also make support more progressive.
| Author | : International Monetary Fund. European Dept. |
| Publisher | : International Monetary Fund |
| Total Pages | : 92 |
| Release | : 2023-07-17 |
| Genre | : Business & Economics |
| ISBN | : |
Download Germany Book in PDF, ePub and Kindle
The German economy has demonstrated resilience following the shut-off of Russian gas supply last year, with highly adverse scenarios of widespread energy scarcity being avoided. This success reflects impressive efforts to conserve energy and secure future energy supplies, as well as the lack of severe winter weather. Nonetheless, adverse effects from the energy shock and tighter financial conditions have been sufficient to tilt the economy into recession in recent months. Inflation also spiked as the energy price shock added to existing pandemic-related supply bottlenecks, though inflation is now falling as these effects start to ease. Germany’s financial system remains well capitalized and liquid overall, but banking turmoil in other advanced economies earlier this year has nonetheless heightened the focus on potential financial stability risks associated with rising interest rates.
| Author | : International Monetary Fund. European Dept. |
| Publisher | : International Monetary Fund |
| Total Pages | : 112 |
| Release | : 2023-07-11 |
| Genre | : Business & Economics |
| ISBN | : |
Download United Kingdom Book in PDF, ePub and Kindle
Market stress following the September 2022 'mini-budget' has dissipated, in the context of a successful financial stability intervention by the Bank of England (BoE) and two prudent budgets. Post-Brexit uncertainty has declined somewhat due to the Windsor Framework agreement to resolve disputes around the Northern Ireland Protocol. Still, the economy faces several challenges. The post-pandemic recovery was disrupted by the sharp energy price shock due to Russia’s war in Ukraine; labor force participation has declined, mainly on account of rising long-term illness; and large policy rate increases—needed to arrest high and sticky inflation—have tightened financial conditions. Accordingly, and despite recent upgrades, GDP growth is forecast at a modest 0.4 percent for 2023, followed by 1 percent growth in 2024. Lower energy prices and emerging economic slack is projected to help reduce headline inflation to around 51⁄4 percent by end-2023 and to the 2 percent target by mid-2025. Risks are tilted to the downside for growth and to the upside for inflation. Tighter-than-expected global financial conditions present the key downside risk to growth, while robust wage growth and greater inflation persistence pose upside risks to inflation.
| Author | : Ms. Laura Valderrama |
| Publisher | : International Monetary Fund |
| Total Pages | : 47 |
| Release | : 2023-03-24 |
| Genre | : Business & Economics |
| ISBN | : |
Download European Housing Markets at a Turning Point – Risks, Household and Bank Vulnerabilities, and Policy Options Book in PDF, ePub and Kindle
European housing markets are at a turning point as the cost-of-living crisis has eroded real incomes and the surge in interest rates has made borrowers more vulnerable to financial distress. This paper aims to (i) shed light on the risks in European housing markets, (ii) quantify household vulnerabilties, (iii) assess banking sector implications and (iv) examine policies’ effectiveness using simulations based on microdata from the Household Finance and Consumption Survey (HFCS) and EU statistics on income and living conditions (EU-SILC). Under the baseline IMF macroeconomic forecast, the share of households that could struggle to meet basic expenses could rise by 10 pps reaching a third of all households by end 2023. Under an adverse scenario, 45 percent of households could be financially stretched, representing over 40 percent of mortgage debt and 45 percent of consumer debt. The impact on the banking sector seems contained under the baseline forecast, though there are pockets of vulnerability. A 20 percent house price correction could deplete CET1 capital by 100-300 basis points. Fiscal measures, such as subsidies to the bottom income tercile, could save 7 percent of households from financial distress at an estimated cost of 0.8 percent of GDP.
| Author | : International Monetary Fund. European Dept. |
| Publisher | : International Monetary Fund |
| Total Pages | : 76 |
| Release | : 2023-03-09 |
| Genre | : Business & Economics |
| ISBN | : |
Download Kingdom of the Netherlands–the Netherlands Book in PDF, ePub and Kindle
The Dutch economy was more resilient than its peers during and after the pandemic. Reflecting the prevalence of telecommuting and strong fiscal support, the economy experienced a less severe recession followed by a more robust recovery than in the rest of the euro area, with no scarring expected. The labor market is tight with a low unemployment rate and high vacancies, although wage growth has so far been moderate. After hitting a record high in September, consumer price inflation eased to 11 percent in December driven by lower energy prices, while core inflation increased to 8.4 percent y/y. The economy appears to be overheating. The war in Ukraine is posing new challenges albeit the terms of trade shock has been smaller than for the rest of the euro area.
| Author | : David Amaglobeli |
| Publisher | : International Monetary Fund |
| Total Pages | : 26 |
| Release | : 2024-02-09 |
| Genre | : Business & Economics |
| ISBN | : |
Download Firms’ Resilience to Energy Shocks and Response to Fiscal Incentives: Assessing the Impact of 2022 Energy Crisis Book in PDF, ePub and Kindle
The energy price shock in 2022 led to government support for firms in some countries, sparking debate about the rationale and the nature of such support. The results from nationally representative firm surveys in the United States and Germany indicate that firms in these countries were generally resilient. Coping strategies adopted by firms included the pass-through of higher costs to consumers, adjustment of profit margins (United States) and investments in energy saving and efficiency (Germany). Firms in energy-intensive industries would have been significantly more affected if international energy prices were fully passed through to domestic prices in Europe. Survey responses further reveal that most firms are uncertain about the impact of recent policy announcments on green subsidies. Firms take advantage of fiscal incentives to accelerate their climate-related investment plans are often those that have previous plans to do so. These findings suggest better targeting and enhancing policy certainty will be important when facilitate the green transition among firms.
| Author | : International Monetary Fund. European Dept. |
| Publisher | : International Monetary Fund |
| Total Pages | : 48 |
| Release | : 2024-01-24 |
| Genre | : Business & Economics |
| ISBN | : |
Download Greece Book in PDF, ePub and Kindle
Greece: Selected Issues
| Author | : International Monetary Fund. European Dept. |
| Publisher | : International Monetary Fund |
| Total Pages | : 50 |
| Release | : 2023-06 |
| Genre | : Business & Economics |
| ISBN | : |
Download Republic of Poland Book in PDF, ePub and Kindle
Republic of Poland: Selected Issues
| Author | : Christopher J. Erceg |
| Publisher | : International Monetary Fund |
| Total Pages | : 79 |
| Release | : 2024-04-05 |
| Genre | : Business & Economics |
| ISBN | : |
Download Can Energy Subsidies Help Slay Inflation? Book in PDF, ePub and Kindle
Many countries have used energy subsidies to cushion the effects of high energy prices on households and firms. After documenting the transmission of oil supply shocks empirically in the United States and the Euro Area, we use a New Keynesian modeling framework to study the conditions under which these policies can curb inflation. We first consider a closed economy model to show that a consumer subsidy may be counterproductive, especially as an inflation-fighting tool, when applied globally or in a segmented market, at least under empirically plausible conditions about wage-setting. We find more scope for energy subsidies to reduce core inflation and stimulate demand if introduced by a small group of countries which collectively do not have much influence on global energy prices. However, the conditions under which consumer energy subsidies reduce inflation are still quite restrictive, and this type of policy may well be counterproductive if the resulting increase in external debt is high enough to trigger sizeable exchange rate depreciation. Such effects are more likely in emerging markets with shallow foreign exchange markets. If the primary goal of using fiscal measures in response to spikes in energy prices is to shield vulnerable households, then targeted transfers are much more efficient as they achieve their goals at lower fiscal cost and transmit less to core inflation.
| Author | : Mai Dao |
| Publisher | : International Monetary Fund |
| Total Pages | : 62 |
| Release | : 2023-09 |
| Genre | : Business & Economics |
| ISBN | : |
Download Unconventional Fiscal Policy in Times of High Inflation Book in PDF, ePub and Kindle
The surge in energy prices in 2022 has been a defining factor behind the increase in euro area inflation. We assess the impact of “unconventional fiscal policy,” defined as the set of fiscal measures, possibly expansionary, motivated by a desire to mute the effects of the increase in energy prices and to lower inflation. Overall, we find that these unconventional measures reduced euro area inflation by 1 to 2 percentage points in 2022 and may avoid an undershoot later on. When nonlinearities in the Phillips curve are taken into account, the net effect is to reduce inflation by about 0.5 percentage points in 2021-24, and keep it nearer to its target. About one-third to one-half of the reduction in 2022 reflects the direct effects of the measures on headline inflation, with much of the remainder reflecting the lower pass-through to core inflation. The fiscal measures were deficit-financed but had limited effects on raising inflation by stimulating demand and instead modestly helped to stabilize longer-term inflation expectations. Looking ahead, the prospective decline in inflation in the euro area is partly due to fortunate circumstances, with energy prices falling from their 2022 peaks and their pass-through effects fading, and with less economic overheating than in economies such as the United States. Implementing similar measures in the face of a more persistent increase in energy prices, or in a more overheated economy, would have caused a more persistent rise in core inflation.
