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Otaviano Canuto draws on extensive experience working in multilateral institutions, government, and academia across a wide range of markets and countries to assist clients navigate challenges and opportunities.

Latest articles

China’s Economic Growth on Target Despite Challenges

IMF projects China’s economic growth at 4.6% and 4.1% for this year and next. China’s official target is 5%.
Six challenges to China’s economic growth include the real estate sector, local government debt, domestic demand, external resistance to China’s exports, change in foreign investor sentiment, and demographic decline.
Despite challenges, China’s economic growth remained steady in Q1 2024, with exports and manufacturing investment compensating for the drag from the property sector.

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O lado fiscal do “novo normal” nas economias avançadas

Há um “novo normal” com custos de financiamento significativamente mais altos do que na última década.
Se melhorias nos saldos primários dos governos não puderem ser alcançadas para compensar taxas reais mais altas e crescimento potencial mais baixo, a dívida soberana continuará a crescer.
Isso também poderá trazer implicações para a saúde do setor financeiro. Taxas de juros mais altas, níveis mais altos de dívida soberana e uma parcela maior dessa dívida no balanço do setor bancário tornam o setor financeiro mais vulnerável.
Uma reconstrução gradual e crível de amortecedores fiscais que garantam a sustentabilidade de longo prazo de dívidas soberanas será apropriada no “novo normal” do regime de políticas macroeconômicas.

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The Global War of Subsidies

Janet Yellen warns China against flooding the world with cheap exports of clean energy.
Excess industrial capacity and government support in China’s clean energy sector were discussed by US Treasury officials.
The US, EU, South Korea, Japan, and Australia are implementing subsidy programs to protect their domestic industries and compete with China.

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Demographic Dynamics and Immigration Policies in High-Income Countries

Most high-income countries will experience declines in their populations over the next few decades. Some negative consequences of aging are on the horizon: greater fiscal imbalances and risks of economic stagnation.
Immigration may be a way for those countries to mitigate the tendency. On the source side of immigration flows, brain drain is a risk.
The policy paper presents the case of Japan, a nation that has grappled with the consequences of a declining and aging population for several years, as an example for other countries destined to confront similar circumstances in the forthcoming decades.

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A Guerra Global de Subsídios

Qualquer avaliação econômica de custos e benefícios desses programas de subsídios enfrenta uma dificuldade inerente ao se levar em conta que os resultados buscados não são estritamente econômicos. Existe o risco de os países, especialmente os EUA e a China, adotarem definições cada vez mais amplas do que constitui um setor estratégico, disparando novas “guerras globais de subsídios”

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AI and the Future of Government: Unexpected Effects and Critical Challenges

Based on observable facts, this policy paper explores some of the less-acknowledged yet critically important ways in which artificial intelligence (AI) may affect the public sector and its role. Our focus is on those areas where AI’s influence might be understated currently, but where it has substantial implications for future government policies and actions.
We identify four main areas of impact that could redefine the public sector role, require new answers from it, or both. These areas are the emergence of a new language-based digital divide, jobs displacement in the public administration, disruptions in revenue mobilization, and declining government responsiveness.
This discussion not only identifies critical areas but also underscores the importance of transcending conventional approaches in tackling them. As we examine these challenges, we shed light on their significance, seeking to inform policymakers and stakeholders about the nuanced ways in which AI may quietly, yet profoundly, alter the public sector landscape.

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