Opening Remarks by DMD Okamura at IMF-JICA Conference

IMF News, February 14, 2023

Source details

Speaker: Kenji Okamura, Deputy Managing Director, IMF.
Event: Sixth IMF-JICA Conference.
Location and date: Tokyo, February 13, 2023.
Opening acknowledgments: IMF appreciation to JICA and Japanese authorities for their generous support; thanks to JICA and IMF staff for organizing the conference.
Noted timeline: The conference last convened in February 2020, just before the outbreak of the COVID-19 pandemic; "Three years later, the global community has faced myriad challenges."

Summary judgment: "2022 was a very difficult year for the world economy, and it seems 2023 will be tough as well. But the outlook is less gloomy than our forecast last October: we expect this to be the year global growth bottoms out."
World Economic Outlook projections cited:
- Global growth is expected to fall from an estimated 3.4 percent in 2022 to 2.9 percent in 2023, then pick up next year.
Recent shocks highlighted:
- Pandemic-related shocks.
- Russia’s war in Ukraine.
- Inflation driving a cost-of-living crisis.

Characterization: "Asia, however, is a bright spot."
Driver: Regional growth is expected to accelerate this year, driven by China’s reopening.

China’s re-opening could stall.
Inflation could remain higher than expected.
Russia’s war in Ukraine could escalate.
Geo-economic fragmentation threatens multilateral cooperation, particularly on debt and climate change.

Fiscal context: High public debt and limited budgetary space; expanded social spending during the pandemic was essential but must now become sustainable.
Two areas for continued progress:
- "First, we can reorient fiscal expenditures and budget formulation to tackle structural challenges like climate change and digital transformation. This would help mitigate the effects of scarring from the pandemic and achieve the sustainable development goals."
- "Second, we can ensure that fiscal policies and budget frameworks are consistent with longer-term fiscal sustainability, enabling governments to protect vulnerable people and our climate, while making much-needed long-term investments."

Expectation for the conference: Sessions should foster international cooperation, identify best fiscal strategies, and help jump-start inclusive and sustainable growth.
Closing appeal: Renew the spirit of cooperation from the pandemic response to find a path forward.

Opening Remarks by Kenji Okamura, Deputy Managing Director, IMF — Tokyo, February 13, 2023.