Investment Rating - The report does not explicitly provide an investment rating for the industry analyzed Core Insights - Financial deepening, defined as the increase in bank credit relative to GDP, generally leads to a relative increase in carbon dioxide emissions per dollar of GDP across a sample of 125 economies from 1990 to 2019 [2][13][14] - A one-standard-deviation increase in credit-to-GDP results in an increase in CO2 emissions per dollar of GDP by approximately 0.6 percentage points over a five-year horizon, indicating that financial deepening can diminish the decline in CO2 emissions [13][33] - The adverse effects of financial deepening on carbon emissions can be mitigated by stronger institutional environments, including robust environmental regulations and a more market-based financial system [14][40] Summary by Sections Introduction - The transition to a less carbon-intensive economy requires significant investments, with estimates suggesting that global investments in climate mitigation need to rise from $0.9 trillion in 2020 to $5 trillion annually by 2030 [6] - Financial institutions, particularly banks, play a crucial role in directing funds towards green technologies or traditional carbon-intensive investments [7] Data and Methodology - The study utilizes an unbalanced panel dataset of 125 advanced and emerging economies covering the years 1990 to 2019, focusing on CO2 emissions per dollar of GDP and financial deepening measured by credit-to-GDP [16][18] - The empirical methodology employs local projections to assess the impact of financial deepening on CO2 emissions, allowing for the examination of responses over a five-year horizon [26][27] Results - The findings indicate that financial deepening contributes to a persistent increase in CO2 emissions per dollar of GDP, with the most significant effects observed in the first year following an increase in credit-to-GDP [33] - Conditional results reveal that countries with stronger environmental regulations and a higher rule of law index experience less increase in CO2 emissions per dollar of GDP due to financial deepening [35][37] - The analysis shows that the impact of financial deepening varies based on the initial carbon intensity of production, with different institutional factors playing a role in mitigating emissions [41][42] Robustness Checks - Various robustness checks confirm the baseline findings, including the use of alternative measures of financial deepening and focusing on credit boom episodes, which show even more pronounced adverse effects on CO2 emissions [47][49][52]

Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Policy Research Working Paper 10945 Identifying Growth Accelerations Bram Gootjes Jakob de Haan Kersten Stamm Shu Yu Public Disclosure Authorized Development Economics Prospects Group October 2024 Policy Research Working Paper 10945 Abstract This paper introduces a new method to identify output growth accelerations that integrates elements of both the "criteria-based" and "break-testing" approaches, which are prevalent in ...

Investment Rating - The report does not explicitly provide an investment rating for the industry analyzed. Core Insights - The implementation of a carbon tax in the Dominican Republic is expected to impact aggregate total factor productivity (TFP) through resource allocation, with varying effects depending on existing market distortions among firms [4][9][10]. - A carbon tax is more effective when applied to fuels rather than electricity, leading to productivity gains for most sectors by reallocating resources from low-productivity to high-productivity firms [4][15]. - The study emphasizes the importance of considering existing input market distortions when evaluating the impact of environmental taxes [4][10]. Summary by Sections Introduction - The Dominican Republic aims to reduce greenhouse gas emissions by 27% by 2030, and the introduction of a carbon tax is considered a potential regulatory intervention to incentivize firms to reduce fossil fuel consumption [8][9]. Theoretical Framework - The report develops a model to analyze how a carbon tax affects firms' energy input consumption and overall productivity, highlighting the heterogeneous impact based on firms' existing market distortions [12][24]. Empirical Analysis - Utilizing detailed firm-level data from 2009 to 2018, the analysis indicates that a carbon tax could generate approximately $920 million in revenue if set at $110 per ton of CO2, representing about 10% of total taxes collected in 2018 [13][32]. - The sectors most affected by the carbon tax are identified as transport, cement, and hospitality, which have significant carbon emissions footprints [13][37]. Results and Discussion - The findings suggest that the introduction of a carbon tax could shift the burden of market distortions from high productivity firms to low productivity ones, potentially increasing aggregate TFP for most sectors [4][15]. - The report concludes that the effectiveness of a carbon tax is contingent upon the existing distortions in energy consumption and the productivity levels of firms within the Dominican Republic [4][10].

Investment Rating - The report does not explicitly provide an investment rating for the industry. Core Insights - The 2024 Economic Update for Niger highlights significant economic and poverty trends, focusing on the impact of political instability and the need for investment in education to foster inclusive growth [15][18]. Economic and Poverty Developments and Outlook - In 2023, Niger experienced a political crisis leading to sanctions that severely impacted economic growth, reducing GDP growth to 2.0 percent, down from a projected 6.9 percent [34][31]. - The sanctions included trade bans and financial restrictions, which resulted in a loss of approximately 7.5 percent of GDP in external financing [33][32]. - Despite these challenges, total agricultural production expanded, demonstrating some resilience in the economy [17]. - The extreme poverty rate remained unchanged at 48.4 percent, with food insecurity affecting 2.3 million people, or 8.9 percent of the population [17][18]. - The outlook for 2024 anticipates a recovery in GDP growth to 5.7 percent, driven by large-scale oil exports, although inflation is projected to rise to 8.5 percent due to various factors including border closures [18][17]. Investing in Education for Inclusive Growth - The report emphasizes the critical need for investment in education to improve human capital development, which is essential for sustainable economic growth [18][19]. - Key challenges in the education sector include inadequate infrastructure, insecurity leading to school closures, and low enrollment rates, particularly for girls [19][20]. - The government program to improve education quality is estimated to cost around 0.26 percent of GDP annually, but additional funding will be necessary to meet the growing demand for classrooms and qualified teachers [20][21]. - A comprehensive policy agenda is recommended to address these challenges, with potential financing options including improved spending efficiency and mobilizing external financing [20][22].

Investment Rating - The report does not explicitly provide an investment rating for the energy sector Core Insights - The Energy Sector Management Assistance Program (ESMAP) aims to support low- and middle-income countries in achieving universal access to affordable, reliable, sustainable, and modern energy by 2030, while also accelerating the energy transition and ensuring resilience against climate change impacts [5][28][39] Summary by Sections 1. The Evolving Global Context - The pandemic has hindered progress towards poverty reduction and achieving Sustainable Development Goals (SDGs), with 685 million people lacking electricity access in 2022 [15][18] - Achieving SDG 2030 targets requires an annual investment of $5.4 to $6.4 trillion, with an additional $2.4 trillion needed to address climate change and other global challenges [17][20] 2. Evolving World Bank Context - The World Bank is adopting a new approach to align its offerings and increase energy sector financing, aiming to triple energy lending by 2030 [22][23] 3. The Unique Role of ESMAP in the Global Energy Landscape - ESMAP has evolved from providing hands-on advice during the 1970s energy crisis to addressing modern challenges such as energy access, climate change, and gender mainstreaming [24][25] - ESMAP's achievements from FY2021-24 include mobilizing $19 billion in external financing and supporting the installation of 16.5 gigawatts of renewable energy capacity [27] 4. ESMAP Focus Areas - ESMAP's focus areas include energy access (electricity and clean cooking), energy transition, and foundations for decarbonized energy systems [39] - The report highlights the need for catalytic incentives and tailored solutions to achieve universal energy access, particularly in fragile and conflict-affected regions [41][52] 5. ESMAP's Updated Theory of Change - ESMAP's updated Theory of Change emphasizes supportive government policies, public and private investments, and data-driven decision-making to achieve higher-level results [30][34] 6. Financing the ESMAP Business Plan FY2025–30 - The proposed budget for the FY2025–30 Business Plan includes various budget scenarios to support ESMAP's objectives [6][11]

Industry Investment Rating - The report identifies a critical tax-to-GDP ratio threshold of around 12.5% for future economic growth acceleration, with a slightly higher threshold of 13% for inclusive growth [9] - Countries transitioning from low-income to middle-income status typically achieve an average tax-to-GDP ratio of 15% in the decade prior to the shift [10] Core Findings - A tax-to-GDP ratio of 15% is crucial for countries transitioning from low- to middle-income status, with significant benefits observed when tax collection increases from 7% to 15% of GDP [10][11] - Increasing tax revenue from 7% to 15% of GDP is associated with an additional 10 percentage points of cumulative growth over the next ten years and a reduction in the prosperity gap by about half [11][35] Mechanisms of Tax Impact on Growth - Higher tax revenues lead to increased investment in health and education, enhancing productivity and reducing economic volatility [10][37] - A tax-to-GDP ratio of 15% is associated with lower government spending volatility and reduced real GDP growth volatility, contributing to economic stability [49][50] Transitioning to Higher Income Status - Countries transitioning from low-income to lower-middle-income status achieve a critical tax-to-GDP ratio of 15%, reflecting a 3-4 percentage point increase over the decade before transitioning [56] - The average tax-to-GDP ratio increases to 23.4% and 25% when transitioning from lower-middle-income to upper-middle-income and from upper-middle-income to high-income groups, respectively [56]

Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Policy Research Working Paper 10941 Digitalization and Inclusive Growth A Review of the Evidence Gaurav Nayyar Regina Pleninger Dana Vorisek Shu Yu Prosperity Practice Group Office of the Chief Economist October 2024 A verified reproducibility package for this paper is available at http://reproducibility.worldbank.org, click here for direct access. Public Disclosure Authorized Policy Research Working Paper 10941 Abstract ...

Industry Overview - Argentina has exhibited exceptionally high fiscal procyclicality and GDP volatility, ranking among the most volatile economies globally, with economic recessions occurring approximately 33% of the time over the past seven decades [9] - The country's fiscal policy has historically been highly procyclical, characterized by persistent fiscal deficits that exacerbate economic fluctuations and hinder stable growth, ranking among the top four nations in terms of public spending and GDP cyclicality correlation over the past 22 years [9] - Public spending in Argentina rose significantly from 25% of GDP in 2005 to 41% of GDP in 2016, primarily driven by recurrent expenditures, outpacing revenue and leading to fiscal imbalances, liquidity constraints, and debt restructuring [9] Fiscal Policy Analysis - Argentina's fiscal procyclicality stems primarily from expenditure policies, particularly those related to pensions and public wages, with both influenced by the "price" effect and the "quantity" effect, especially for the public wage bill [2][13] - The cyclically adjusted primary balance (CAPB) in Argentina has significantly declined, with discretionary policies being more pronounced during economic booms, and the country's heavy reliance on agricultural commodities exacerbates procyclicality [2][17] - Argentina's unconventional taxes, such as export duties and financial transaction taxes, exhibit a negative correlation with the economic cycle, contributing to fiscal procyclicality [16][80] Public Spending Breakdown - Argentina's public wage bill has displayed strong procyclicality, driven by both "price" and "quantity" effects, with the number of public servants and their average wage showing pronounced procyclical behavior at both national and subnational levels [15][46] - Pension spending in Argentina is highly procyclical, influenced by erratic indexation mechanisms and the "price" effect, with the real value of benefits strongly linked to the economic cycle [14][64] - Public investment and consumption in Argentina have exhibited strong procyclical tendencies, with correlations of 0.59 and 0.61, respectively, over the past two decades [41] Tax Policy Analysis - Argentina's traditional tax sources, such as CIT, PIT, and VAT, exhibit a relatively acyclical policy stance, with correlations between changes in tax rates and real GDP being positive but not statistically significant [76] - Unconventional taxes, including export duties and financial transaction taxes, contribute significantly to Argentina's tax revenue, with export duties showing a weak but negative correlation with the economic cycle, indicating procyclical behavior [80] - The tax structure in Argentina deviates from international standards, with unconventional taxes accounting for nearly one-third of total tax revenue, limiting the effectiveness of traditional tax rate cyclicality analysis [72] Structural Fiscal Balance - The structural budget balance (CAPB) in Argentina has deteriorated significantly over the past decades, even prior to the conclusion of the commodities super-cycle, indicating the presence of procyclical discretionary policies [17] - During the commodities super-cycle, cyclical revenues from commodities-related export duties contributed nearly 1.1% of GDP in additional receipts, with a hypothetical stabilization fund potentially generating revenue equivalent to 2% of GDP between 2006 and 2008 [102] - Argentina's fiscal policy has exhibited a procyclical nature, failing to effectively stabilize the economy, with expansionary fiscal policies during economic upswings hindering improvements in savings and raising sustainability concerns [111]

Industry Overview - The asset management and financial sponsors sector operates in a dynamic and changing market environment, shaped by major global financial trends such as digitalization, sustainable finance, and increasing regulatory scrutiny [2] - The sector includes a diverse range of entities, from wholesale and retail fund managers to private equity and credit firms, each affected differently by market challenges [2] - The asset management industry manages approximately USD 100 trillion in assets but faces pressure from cost and fee income challenges as investors demand more value for money [3] - Private equity operates in a higher cost of capital environment compared to the last decade, with deal flow improving due to slowing inflation and interest rate cuts [4] - Private credit has grown exponentially to USD 1.5 trillion, serving smaller and mid-size corporates as an alternative to leveraged finance and public bonds [4] Technology and Innovation - The sector is increasingly leveraging technology, with artificial intelligence (AI) moving from back-office functions to strategic uses such as due diligence, research, and reporting [5] - Generative AI has the potential to improve investment decision-making and enhance financial sponsors' market performance [5] - Cloud technology poses systemic risks, with major providers potentially becoming single points of failure [15] - Cybersecurity risks are rising, with the financial sector experiencing over 20,000 cyberattacks resulting in USD 12 billion in losses over 20 years [17] - Digital transformation requires businesses to re-skill existing employees and recruit new talent, particularly in AI and IT [18] Sustainability and ESG - Sustainability goals and associated reporting represent both opportunities and risks for the sector, with thematic investing and impact funds gaining importance [6] - Voluntary sustainability standards are becoming regulatory requirements, creating potential barriers to cross-border finance [6] - Greenwashing, misstatements, and mislabeling pose significant risks, with regulatory action increasing in jurisdictions like the US and Australia [23] - ESG-related disclosures are becoming the norm, with challenges in implementation due to data availability and regulatory interpretation [21] - ESG ratings are still open to interpretation, with some jurisdictions introducing regulations to address these issues [22] Specialized Finance - Private credit has grown to USD 1.5 trillion, competing with banks to fund corporate acquisitions and diversifying into assets like commercial real estate [26] - GP-led liquidity solutions are increasingly popular, providing liquidity to sponsors and investors but requiring careful management of conflicts of interest [27] - Adaptation finance faces challenges due to perceived low returns and a lack of standardized market language and classification frameworks [28] - The private funds sector has developed tools to access capital during the fund lifecycle, with sponsors needing to manage conflicts and provide sufficient disclosures [27] Workforce and Inclusion - Inclusion, diversity, and equity (ID&E) are key social factors within ESG, with research showing that greater diversity improves risk management culture [30] - Employers face challenges in implementing ID&E initiatives, particularly in the US, where recent Supreme Court decisions have impacted race-conscious programs [30] - The collection and reporting of diversity data are increasingly mandated, but compliance with local data privacy laws is essential [32] - Executive exits can lead to significant knowledge loss, requiring robust succession planning and enforceable non-compete clauses [33] Mergers and Acquisitions - Private equity M&A activity is improving in 2024 due to slowing inflation and interest rate cuts, with carve-out transactions becoming more popular [35] - Regulatory scrutiny in M&A has increased, with antitrust authorities focusing on new threats to competition and foreign investment control expanding [36] - Due diligence in private equity M&A involves extensive analysis of target companies, particularly in labor law and regulatory obligations [37] - Post-acquisition integration requires careful planning, with HR considerations, tax issues, and regulatory approvals being critical factors [38] Litigation and Enforcement - Climate-related claims are a predominant concern for financial sponsors, with NGOs and claimant law firms leveraging media to exert reputational pressure [40] - Transactional disputes can arise from financing and acquisition activities, with increased risk in situations of distress or competitive lending [42] - Antitrust action is a growing risk, particularly with private equity's use of "roll-up" strategies that consolidate industry sectors [43] Taxation - The global tax landscape is shifting, with increased uncertainty and risks associated with contentious tax matters, including the OECD's Two-Pillar Solution [46] - International tax and transfer pricing structures face heightened scrutiny, with tax authorities demanding more data to substantiate calculations [47] - Tax transparency is becoming a key part of the sustainability agenda, with legislative regimes like the EU Directive on public country-by-country reporting [48] - Carried interest taxation is under scrutiny in the UK, with potential implications for private equity funds and key individuals [49]

Investment Rating - The report does not explicitly provide an investment rating for the tourism industry in Spain. Core Insights - Tourism is a cornerstone of Spain's economy, with international tourist arrivals reaching 85.0 million in 2023, exceeding pre-pandemic levels by 1.8%, and generating EUR 108.8 billion in international tourist expenditure [20][21] - The report emphasizes the need for a balanced approach to tourism that maximizes positive impacts while minimizing negative environmental and social effects [21][25] - A tailored indicator framework has been developed to measure and monitor the sustainability of tourism in four Spanish regions: Andalusia, Catalonia, Navarra, and the Region of Valencia [25][26] Summary by Sections Foreword - The OECD has supported four Spanish regions in developing a system of indicators to measure tourism sustainability, funded by the European Union [6][10] - The project aims to build a more sustainable, resilient, and digital tourism ecosystem in Europe post-COVID [6] Chapter 1: Policy Context - The chapter outlines the policy context and aims of the initiative, highlighting the challenges faced by regional governments in measuring tourism's economic, social, and environmental impacts [29][33] - It discusses the National Recovery, Transformation and Resilience Plan, which aims to modernize and build a sustainable tourism sector [31][32] Chapter 2: Existing Frameworks - This chapter reviews existing sustainability initiatives and indicator frameworks globally, identifying gaps in measuring tourism sustainability beyond economic factors [22][23] Chapter 3: Indicator Framework - A system of indicators has been developed, structured around 11 policy issues, including economic benefits, local community sentiment, and environmental management [26][27] - The framework includes 21 core indicators and 9 supplementary indicators, with a focus on regional specificities [26][27] Chapter 4: Compilation Guide - Detailed guidance is provided for compiling indicators across governance, economic, social, and environmental dimensions [34][35] Chapter 5: Future Development - The report outlines avenues for refining indicator methodologies and addressing data gaps related to cultural heritage, greenhouse gas emissions, and digitalization [28][39]