Opening Remarks at the Eighth Tokyo Fiscal Forum

June 6, 2023


Good morning, ladies and gentlemen.

On behalf of the IMF, I am very pleased to welcome you all to the Eighth Tokyo Fiscal Forum.

This is the first in-person forum in three years since 2019. We are pleased to hold the event in person again, as a more lively format helps to strengthen relationships and build social networks.

Also, I would like to thank Japan’s Ministry of Finance and the Asian Development Bank Institute for co-organizing this forum with us.

Topics of the forum

This year’s Tokyo Fiscal Forum will discuss two important topics: The Relevance of the Fiscal-Monetary Policy Mix for Disinflation, and Global Cooperation and Climate Change.

Let me tell you why we believe these policy issues are relevant.

In terms of the fiscal-monetary policy mix, as you know, the inflation upsurge since 2021 called for immediate action to tighten monetary policy. Within this context, fiscal policy can support monetary policy in the disinflation effort.

Our latest Fiscal Monitor shows that one percentage point of GDP in additional public spending resulted in higher inflation of 0.5 percentage point from 1986–2019. Thus, fiscal consolidation sends a powerful signal that macro-economic policies are aligned in the fight against inflation.

In the meantime, we need to protect those most affected by the cost-of-living crisis. It’s increasingly important that fiscal authorities prioritize their policies, as governments need to operate within tighter budgets.

Our distinguished panel will explore how to better coordinate fiscal and monetary policy from a macro-fiscal perspective, and how to manage fiscal policy in such a difficult time.

The second issue is about climate policy.

Given the transition to “net zero” greenhouse-gas emissions over the next three decades, policymakers need to have comprehensive mitigation and adaptation strategies in place.

Carbon pricing would be the ideal centerpiece but may need reinforcing with sectoral measures like feebates and regulations. Also, public infrastructure investments and transition measures should be well designed to make the economy and society more resilient.

As you may be aware, the IMF’s Fiscal Affairs Department has done many capacity development missions in this area, including work related to the Climate-Public Investment Management Assessment (C-PIMA) and green PFM (Public Financial Management), as well as capacity development on climate mitigation policies and comprehensive climate fiscal diagnostics.

Scaling up climate finance also requires the right policy incentives. They will be put in place to encourage financing flows from both the public and private sectors.

On Day 2, we will discuss this topic. The session will explore how to design climate policy and promote global cooperation in this field.


In closing, I would like to assure you that the IMF stands ready to help its membership’s efforts to strengthen public finance through policy advice and institution building. We are here to listen, and to better understand what you need from us.

We are providing substantive capacity development to help countries address these challenges and will continue to be strongly committed to supporting member countries.

I hope this forum will help you share your experiences and develop the fiscal policy solutions needed in your countries.

I would like to wish you a fruitful debate over the next two days and my deepest thanks for your active participation.