Message from the Managing Director

Dear Reader,

The global economy continues to show resilience in the face of more frequent and overlapping shocks. This year, it was war in the Middle East restraining growth, boosting inflation, and disrupting the supply of key commodities. If not for an agile private sector boosted by AI investment and disciplined policymaking, things could have been much worse.

But uncertainty remains high and the medium-term outlook tepid. We must get on a path to higher economic growth, while strengthening resilience to our shock-prone world. Price and financial stability are paramount. Thanks to sound policy frameworks and strong institutions, they are serving as pillars of resilience. It is the fiscal challenge that grows only more acute. Fiscal authorities still have tools they can use, but they must choose wisely. Structural policies are also a crucial avenue to build more durable growth, flexibility, and resilience. Against this backdrop, AI offers both opportunity and threat. To take advantage of the opportunity, countries can help workers to reskill and firms to seize potential productivity gains. To manage the threat, strengthening cyber-resilience is a must. As our members navigate today's crosscurrents, the IMF stands with them, differentiating its support to meet the needs of each member. This includes clear and candid policy advice, tailored financial assistance, and capacity development. From navigating a changing trade environment, to reducing imbalances, to seizing the opportunities of the AI age, the Fund stands as a venue for cooperation and as a transmission line for good policies.

With the support of our members, represented by the IMF's Executive Board, we have further strengthened the Fund over the last fiscal year. To support our most vulnerable members, we are carrying out reforms to the Poverty Reduction and Growth Trust agreed to in 2024. We thank the members who have made commitments and call on others to provide assurances of additional subsidy resources to ensure its self-sustained Lending capacity.

To support all members, we are strengthening our core functions through comprehensive reviews: how we conduct surveillance and financial sector assessments; how we determine the level of debt that is sustainable for low-income members; how we design country programs; and how we assess global imbalances and their impacts. And to ensure that the IMF remains inclusive and representative of all members, we continue to urge them to implement the 16th quota review. The Fund is committed to building on our strengths to meet the new and evolving needs of our members. Each new shock only shows more clearly how interconnected we are, and how much our members can benefit from pooling their collective strength and working together with the International Monetary Fund to yield tangible results.

Warm regards,

KRISTALINA GEORGIEVA
Managing Director