Introductory Remarks by the Managing Director at 23rd Jacques Polak Annual Research Conference

IMF News, November 10, 2022

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Canonical URL: Introductory Remarks by the Managing Director at 23rd Jacques Polak Annual Research Conference

Speaker: Kristalina Georgieva, Managing Director, IMF
Event: 23rd Jacques Polak Annual Research Conference, theme “The Global Economy: Looking Back, Moving Forward.”
Date: November 10, 2022

Strengthened the Fund’s reputation for delivering high-quality research and enhanced the Fund’s contribution to policy debate.
Under his leadership, the World Economic Outlook became the seminal reference for global forecasts and for identifying interconnections and possible spillovers, aiding multilateral surveillance in a more shock-prone world.
Advanced the External Sector Report as the Fund’s objective, comprehensive, and multilaterally consistent assessment of exchange rates and external imbalances.
Early promoter of climate research at the Fund; co-authored the book “Coping with the Climate Crisis.”
Contributed to discussions on Euro Area fiscal rules and advocated for further integration of Europe’s Economic and Monetary Union, supporting the need for a fiscal union.
Academic contributions: coauthor of textbooks over the past 3 decades — “Foundations of International Macroeconomics” (with Ken Rogoff) and “International Economics: Theory and Policy” (with Paul Krugman and Marc Melitz) — and extensive work on global external imbalances, financial crises, exchange rates, and monetary policy.

The global economy has been hit by sequential shocks, notably Russia’s war in Ukraine and the lingering pandemic, both weighing heavily on the global economic outlook.
Inflation is at multi-decade highs, driven by rising food and energy prices, persistent supply-chain disruptions, and mounting debt vulnerabilities.
Financial conditions are tightening; capital flows and exchange rate volatility have increased dramatically, with heightened concern for low- and middle-income countries facing financing constraints and limited access to markets.
Debt vulnerability statistics:
- About 60 percent of low-income countries are in or at high risk of debt distress.
- About 25 percent of emerging market countries are in or at high risk of debt distress.

Monetary policy:
- Immediate challenge for central banks in both advanced and emerging market economies is to bring inflation down.
- Central banks are tightening monetary policy to restore price stability; there is broad agreement that monetary policy should “stay the course,” though challenges in managing the tightening cycle remain open.
Fiscal policy and the policy mix:
- Need to formulate and calibrate responsible fiscal policy amid persistent price pressures.
- Priority: protect vulnerable households with targeted measures to alleviate rising food and fuel prices.
- Caution: support measures should not further fuel inflation or sidetrack monetary policy efforts.
Fiscal sustainability:
- Finance ministers must fine-tune fiscal policy to support the vulnerable while preserving a credible fiscal framework and a sustainable debt profile over the medium term.

Climate is characterized as the most daunting challenge of our time.
Analysis suggests more volatile climate outcomes, especially in LICs, if carbon emissions continue unabated, with direct implications for agricultural output.
Emphasis on the need for a strong understanding of the global economic impacts of climate shocks alongside calls for action.

The conference will address the issues above through analytical work presented and debated over two days.
Intended outcome: insights and takeaways that can form a roadmap for moving forward in addressing inflation, fiscal and financial vulnerabilities, and climate-related economic risks.

Introductory Remarks by the Managing Director at the 23rd Jacques Polak Annual Research Conference, Kristalina Georgieva, November 10, 2022.