## GLOBAL FINANCIAL STABILITY REPORT — Key Highlights 2023 OCT — Soft landing or abrupt awakening

## Source details

**Canonical URL:** [GLOBAL FINANCIAL STABILITY REPORT — Key Highlights 2023 OCT — Soft landing or abrupt awakening](https://www.imf.org/-/media/files/publications/gfsr/2023/october/english/infographic.pdf)

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### Outlook and scenarios
- Two broad scenarios referenced: "Adverse" and "Baseline".
- Time markers: Sep 2021PeakAug 2023.
- Selected numerical indicators shown (as presented):
  - 2.2
  - 5.8
  - 4.8
  - 4.1
  - 8.6
  - 6.1
  - 82%
  - 40%
  - 89%
  - 43%
  - 2.4
  - 1.3
  - 0.2
  - 1.0
  - 2.1
  - 2.2
  - 0.1
  - 0.2
  - 3.8
  - 3.0
  - 1.5

### Inflation, rate hikes, and monetary policy
- Average rate hikes reported:
  - Average rate hikes in advanced economies: 400 basis points (Median advanced economies).
  - Average rate hikes in emerging market economies: 780 basis points (Median emerging market economies).
- Core inflation: (label shown as "Core inflation (%)" with supporting figures displayed elsewhere on the infographic).

### Emerging market and developing economies (EMDEs)
- Headline labels and figures presented:
  - Emerging market and developing economies
  - Emerging market and developing economies excluding China
  - Numeric items shown in proximity to these labels:
    - 3%
    - 4%
    - 1%
    - 36%
    - 27%
    - 54%
- EMDE climate transition data sources indicated: EMDEs: IEA.

### Climate investment and mitigation financing
- Annual Mitigation Financing Needs by 2030 to Achieve Net Zero by 2050 (Share of private in total climate investment) — infographic presents:
  - Required share of private sector by 2030 (label present).
  - Current share of private climate finance (label present).
  - Sectoral breakdown items listed:
    - Electricity system
    - Energy efficiency
    - Negative emission
    - Others
  - Global data sources indicated: Global: IRENA; Global: IEA.
- Numerical/statistical elements associated with mitigation/sectoral shares (as presented):
  - 2.2
  - 5.8
  - 4.8
  - 4.1
  - 8.6
  - 6.1
  - 2.4
  - 1.3
  - 0.2
  - 1.0
  - 2.1
  - 2.2
  - 0.1
  - 0.2
  - 3.8
  - 3.0
  - 1.5

### Banking system and financial stability risks
- The global banking system is described as sound, but vulnerable under an adverse stagflationary scenario: "an adverse stagflationary scenario could result in many weak banks."
- Weak Banks: Share of Total Assets by Region (Banks below CET1 ratio of 7 percent) — label present (no region-specific numeric breakdown provided in the infographic excerpt).

### Policy recommendations (as presented)
- Central banks should remain determined in their fight against inflation.
- Emerging market and developing economies should strengthen efforts to contain risks associated with their high debt vulnerabilities.
- National authorities should deploy stringent stress tests to estimate the potential effect of rising interest rates on borrowers’ repayment capacity.
- Enhance financial sector regulation and supervision.
- Sharpen risk assessments.
- Increase the severity of stress tests.
- Ensure adequate capital against interest rate risks.
- Prepare for access to central bank lending facilities.
- A broad mix of policies is needed to unlock climate finance.
- Enhance focus of financial policies on climate impact.
- The IMF’s Resilience and Sustainability Facility can help create a more attractive climate investment environment by supporting reforms.

_Infographic — GLOBAL FINANCIAL STABILITY REPORT: Key Highlights (October 2023)_

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_Source: https://www.imf.org/-/media/files/publications/gfsr/2023/october/english/infographic.pdf_