Selected Issues Papers
IMF Selected Issues Papers are prepared by IMF staff as background documentation for periodic consultations with member countries.
2025
May 9, 2025
Household Deleveraging: International Practices: Thailand
Description: Household sector over-indebtedness has been a critical issue in Thailand in recent years. This paper starts with a summary of the deleveraging measures implemented so far in Thailand, and then presents four country case studies (Brazil, Hungary, Korea, and Malaysia), with a focus on the measures introduced by the authorities to address high levels of unsecured loans as they are more relevant to Thailand’s current risk profile. The case studies are followed by a brief overview of other relevant international experiences in facilitating debt rehabilitation, forgiveness, and bankruptcy. The study concludes by suggesting a comprehensive, multi-pronged approach to household deleveraging in Thailand.
May 9, 2025
Unlocking the Work Force Potential: Empowering Women to Boost Economic Growth and Greek Prosperity
Description: The strong recent economic recovery has improved Greece’s near-term outlook. However, unfavorable demographics require raising the labor force participation, particularly for women, to boost medium-term growth. Using household survey, cross-country comparison, and model simulations, we identify three main constraints: (i) care responsibilities; (ii) skill mismatches; and (iii) tax-benefit work incentives. Estimates suggest that addressing care responsibilities alone could boost employment by 3 percent. Policy recommendations include expanding access to childcare facilities, improving parental leave policies, strengthening tax-benefit incentives, and addressing skill mismatches. These measures, combined with complementary reforms could significantly empower women to boost economic growth and prosperity in Greece.
May 6, 2025
Corporate Sector Vulnerabilities in Hong Kong SAR: Hong Kong, Special Administrative Region
Description: Hong Kong SAR’s corporate sector vulnerabilities appear manageable but have increased in recent years. Local non-real estate firms have seen weakening profitability and lower debt-servicing capacity, reflecting pandemic scarring effects and higher funding costs driven by the hiking cycle of U.S. monetary policy. While, on aggregate, their leverage level and liquidity appear manageable, there is high heterogeneity across firms, with smaller listed firms appear to be more vulnerable. As for the local real estate firms, they are exposed to changes in property prices given their sizeable holding of investment properties and inventory. However, their relatively low leverage helps mitigate risks. Mainland Chinese firms listed in Hong Kong SAR show rising financial vulnerabilities, primarily due to weakening profitability and property market adjustment that have adversely affected property developers’ balance sheets. Proactive efforts are warranted to ensure effective monitoring and management of financial vulnerabilities in the corporate sector, including ensuring banks’ proactive management of nonperforming assets, assessing the impact of the ongoing property market adjustments, and calibrating policies to support small businesses appropriately.
May 6, 2025
Hong Kong SAR’s Economy in the Face of Climate Change: Risks and Prospects
Description: Hong Kong SAR is facing ongoing challenges from climate change, with projections indicating that these issues will remain prevalent or even intensify in the future. In response, Hong Kong SAR has embraced a comprehensive three-pronged climate strategy—the Climate Action Plan 2050—that focuses on mitigation, adaptation, and building resilience, and sets ambitious goals of reducing carbon emissions by 50 percent before 2035 and achieving carbon neutrality before 2050. Simultaneously, there is a concerted effort to bolster infrastructure and community resilience against natural disasters. Although significant strides have been made towards decarbonizing the economy and building resilience in the last few years, sustained action is pivotal to reach carbon neutrality, including by reducing emissions in hard-to-abate sectors and improving energy efficiency across industries. It would also be crucial to continue strengthening resilience against extreme weather events, further integrate climate into systemic risk analysis, and foster a green finance ecosystem.
May 6, 2025
The Fiscal Implications of Population Aging for Hong Kong SAR: Hong Kong Special Administrative Region
Description: Hong Kong SAR’s significant demographic pressures will create fiscal challenges for the authorities. Fiscal expenditure pressures from population aging have already been rising rapidly for over a decade and are expected to increase significantly in coming years, even without factoring in the cost of needed improvements to the social security system. An aging population is also going to adversely affect the economy’s potential output growth and fiscal revenue, with the effect larger in a scenario where the working age population shrinks. Revenue-boosting tax reforms and other fiscal measures will be needed to provide a stable funding base for Hong Kong SAR’s high-quality development into the medium term.
April 28, 2025
Liechtenstein: The Fiscal Sector Framework
Description: This paper analyzes Liechtenstein's fiscal framework, highlighting its successful consolidation following the global financial crisis. The study examines the budget balance rule that anchors fiscal policy, benchmarking key fiscal indicators against European peers. Findings reveal Liechtenstein effectively implemented frontloaded fiscal consolidation through revenue and expenditure measures, improving the fiscal balance by 4.1 percent of GDP during 2014-18. Despite maintaining low tax rates, Liechtenstein operates with a lean government structure, evidenced by low public employment levels and wage bills. The analysis concludes that increased capital investment could boost productivity, which has stagnated over the past two decades despite being higher than Switzerland's.
April 28, 2025
Cross-Border Income Flows in Liechtenstein: Principality of Liechtenstein
Description: In Liechtenstein, the gap between Gross Domestic Product (GDP) and Gross National Income (GNI) is significant due to the country’s economic structure as a financial center with a high percentage of cross-border commuters and globally competitive manufacturers contributing to high GDP per capita. Using currently available data, this paper examines the drivers of the GDP-GNI gap in Liechtenstein to provide a broader context of its high per capita income.
April 28, 2025
Liechtenstein as a Financial Center: Liechtenstein
Description: Liechtenstein has strategically positioned itself as a prominent financial center in the wake of the global financial crisis and increasing demands for transparency. The strategy emphasizes transparency, compliance and robust regulatory framework aligned with international standards. The financial sector is outsized compared to its economy, with significant assets under management reflecting its focus on international clients. Unlike many other financial centers, Liechtenstein does not significantly host shell corporations. While systemic risks are mitigated by off-balance sheet and unleveraged operations, the financial center model carries compliance and reputational challenges. Continued vigilance remains paramount for the sustainability of its financial center strategy.
April 28, 2025
Liechtenstein’s Pension System: Liechtenstein
Description: The paper analyzes Liechtenstein's three-pillar pension system, assessing its structure, funding mechanisms, sustainability and adequacy challenges. Liechtenstein's pension system operates on a three-pillar framework comprising public pensions (AHV-IV-FAK), mandatory occupational schemes, and voluntary insurance. With reserves exceeding 150 percent of GDP, the system ranks third globally in accumulated savings. Despite robust financial health and built-in intervention mechanisms, demographic projections indicate Pillar I assets will decline below statutory minimums by 2043. The research concludes that population aging and increased life expectancy will necessitate policy adjustments such as raising retirement ages or increasing contribution rates to ensure the system's long-term viability.
April 28, 2025
Labor Market in Liechtenstein
Description: Liechtenstein's labor market is characterized by a high reliance on non-resident workers, with commuters comprising the greater share of employment, particularly in higher-skilled occupations. With the steady inflow of skilled labor, infrastructure constraints have come into play and productivity has stagnated over time. Furthermore, a sizeable gender pay gap exists and the labor force participation of women and older workers remains relatively low.