Policy Papers

The global economy has been resilient and appears headed for a soft landing. Inflation continues to
recede and risks have become more balanced globally. Nonetheless, medium-term growth prospects
remain at the lowest level in decades and a smooth completion of the disinflation process should not be
taken for granted. While the outlook for low-income developing countries (LIDCs) is improving, risks are
tilted to the downside. The pace of convergence toward higher living standards has slowed, making it
increasingly challenging to achieve the Sustainable Development Goals (SDGs). In the last mile of
disinflation, central banks should ensure that inflation moves durably to target: they should neither ease
policies prematurely nor delay too long and risk causing target undershoot. Fiscal policies need to rebuild
budgetary room and ensure debt sustainability. Fostering faster productivity growth and facilitating the
green transition are keys to improving long-term growth prospects. Multilateral cooperation is key to
enhancing the resilience of the global economy in a more shock-prone world.