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

We believe Beijing still has the policy capacity to push China’s economy towards its growth potential. Though maintaining our above-consensus forecast for 2024 growth at 5.0%, we also caution the downside risk if the demand-side stimulus is inadequate.

Policy changes made by President Tinubu last year were deemed necessary, but acceleration and greater cohesion of orthodox policies across the board are needed. Continued devaluations, without appropriate policies, are most likely a fool’s game.

IIF Digital Finance submitted a letter to the Committee on Payments and Market Infrastructures (CPMI) concerning industry initiatives underway that contribute to the G20’s objectives of faster, cheaper and more transparent and inclusive cross-border payments.

Recent readings suggest a cooling down in inflation … which implies that the BoJ would time its pivot more carefully. Wage negotiations will be key ...

Beyond carbon emissions, addressing methane emissions is vital for achieving a net-zero economy by 2050. Despite increasing pledges to reduce methane emissions, these efforts have been limited in scope due to the wide range of emission sources (making standardized solutions difficult) and the high cost of financing emissions reductions.

Disinflation progress will prompt deeper policy-rate-cutting cycles regionwide in 2024. Against a backdrop of non-linear disinflation and sizable risks, the challenge for LatAm central banks will be normalizing the policy stance while maintaining hard-won credibility.

After 2008, many countries never regained their pre-crisis growth rates, ... with large output gaps opening up in the US, the Euro zone and other pla...

China's shadow banks, especially the trust companies, are hurt badly by the deflationary economy and housing recession. The financial risk would be much greater if the regulators had not tightened the shadow bank regulations.

This week’s Developments explores international policy approaches to artificial intelligence (AI), nothing that while AI is at the top of agenda in many groups, few specifics about how they will develop AI policy or regulation are available, complicating the outlook for industry.

EM Eurobond issuance remains weak in early 2024, with higher global rates crowding out investment flows to riskier emerging markets and market access constrained by policy risks—including lengthy and contentious debt workouts.

On January 11, the IMF approved the first review of the 9-month SBA program, releasing US$ 700mn in much needed financing assistance. While financing needs for the remainder of the fiscal year should be covered, a successor IMF program will be needed after the SBA ends in March 2024.

Demand for voluntary carbon credits (VCC) reached an all-time high in December 2023, reflecting the exponential increase in corporate climate commitments. Under favorable market conditions, and as the policy drivers for a net-zero economy take shape, annual demand for retiring VCCs is projected to surpass $3 trillion by 2030–a sharp increase from less than $0.8 billion in 2023.

We have over the years flagged big EM overvaluations. Our basic approach uses current account-based models, … but in some cases this kind of infrast...

The ongoing conflict in Gaza will widen the current account deficit. Gross financing needs will remain very high and available financing will be insufficient unless an IMF program resumes which would usher in additional official financing.

The new EU-friendly coalition government in Poland marks a significant shift in power. Investors maintain cautious optimism about some legislative changes, which would allow Poland to ramp up its withdrawals from the EU funds, improving the outlook.