Edition of the Digital Finance Download covering February 2024. A monthly update of significant developments in digital finance around the globe

This members-only briefing note looks at the main issues addressed by the Instant Payments Regulation, evolutions in instant payments in the euro area, and how the regulation relates to digital identity developments, the digital euro project, and broader cross-border payments initiatives.

We update our analysis of the US credit cycle. Despite an important slowdown in the credit impulse … … the US economy has remained resilient. Banks...

Early 2024 saw a sharp surge in ESG fund flows, driven by a rally in tech shares (which are heavily weighted in ESG indices given their high ESG scores). In February, inflows to ESG fixed income funds reached their highest in over a year. Looking ahead, a synchronized series of rate cuts by major central banks could have a positive impact on ESG fund flows, particularly in the second half of 2024.

Despite the decent real GDP growth of 5.2% in 2023, Chinese investors and consumers are still gloomy. This is because deflation is hurting household incomes, corporate earnings, investor returns, and government taxes, which are all in nominal terms.

External accounts improved last year despite softer commodity prices. Key drivers were remittances, import compression, and services normalization. Manageable external financing needs in 2024 should limit vulnerability, helping attract foreign capital.

We survey recent inflation dynamics in the US… and find that most categories of CPI are falling. However, there are still hot spots of inflation… t...

We estimate Ukraine’s external financing needs at around $24 bn for 2024. Securing sufficiently large and timely funding is key for Ukraine’s ability to battle Russia, while maintaining economic and financial stability. Rising defense spending will widen fiscal and current account deficits.

Over $15 trillion was added to the global debt mountain last year, bringing the total to a new record high of $313 trillion. The global debt-to-GDP ratio declined for a third consecutive year, largely driven by mature markets.

This week’s Developments highlights numerous recent initiatives supporting digital finance in Australia, finding that Australian authorities are engaging in a far-reaching modernization of digital assets and payments regulation, and beginning to formulate artificial intelligence policies.