{
  "title": "Navigating A More Fragile World",
  "publication": "IMF News, October 6, 2022",
  "sourceUrl": "https://www.imf.org/en/news/articles/2022/10/06/sp-2022-annual-meetings-curtain-raiser",
  "canonical": "https://www.imf.org/en/news/articles/2022/10/06/sp-2022-annual-meetings-curtain-raiser",
  "overlayPath": "/en/news/articles/2022/10/06/sp-2022-annual-meetings-curtain-raiser/index.md",
  "summary": "Annual Meetings 2022 Curtain Raiser",
  "authors": [
    "Kristalina Georgieva"
  ],
  "publishDate": "2022-10-06",
  "sections": [
    {
      "heading": "Introduction",
      "content": "- Speaker: Kristalina Georgieva, IMF Managing Director.\n- Event and date: Georgetown University, Washington, D.C., October 6, 2022.\n- Framing metaphor: World economy compared to a ship in choppy waters; urgency for wisdom and collective navigation.\n- Recent shocks cited:\n  - Covid.\n  - Russia’s invasion of Ukraine.\n  - Climate disasters on all continents.\n- Central diagnosis: Shift from a world of relative predictability to a world with more fragility—greater uncertainty, higher economic volatility, geopolitical confrontations, and more frequent and devastating natural disasters.\n- Immediate dual agenda:\n  - Stabilize the global economy by addressing immediate challenges.\n  - Revitalize global cooperation and transform the economy to build future resilience.\n- Annual Meetings focus: Call for early and joint action and a more proactive, precautionary mindset among IMF’s 190 member countries."
    },
    {
      "heading": "A Darkening Outlook",
      "content": "Findings and projections:\n- Global growth reached 6.1 percent in 2021.\n- IMF growth projections downgraded three times, now to:\n  - 3.2 percent for 2022.\n  - 2.9 percent for 2023.\n- Expectation: Updated World Economic Outlook will downgrade growth for next year (2023).\n- Recession risk highlighted: Countries accounting for about one-third of the world economy will experience at least two consecutive quarters of contraction this or next year.\n- Real-income effect: Even when growth is positive, shrinking real incomes and rising prices will make conditions “feel like a recession.”\n- Global output loss estimate: about $4 trillion between now and 2026 (described as the size of the German economy).\n- Financial stability risks: Rapid and disorderly repricing of assets could be amplified by pre-existing vulnerabilities, including high sovereign debt and concerns over liquidity in key segments of the financial market.\n- Uncertainty context: War and pandemic increase likelihood of additional shocks.\n\nDrivers of the slowdown:\n- High energy and food prices.\n- Tighter financial conditions.\n- Lingering supply constraints.\n- Specific country/region sources of weakness:\n  - Euro Area: severe impact from reduction of gas supplies from Russia.\n  - China: pandemic-related disruptions and a deepening downturn in its property market.\n  - United States: momentum slowing as inflation reduces disposable income and consumer demand; higher interest rates drag on investment.\n- Spillovers to emerging and developing countries: reduced demand for exports; severe strains from high food and energy prices."
    },
    {
      "heading": "Stabilize",
      "content": "Three immediate policy priorities:\n1. Bring down inflation\n   - Risk of policy misstep: Not tightening enough versus tightening too much and too fast.\n   - Current assessment: Central banks must continue to respond; acting decisively even as economies slow is the right approach despite near-term pain.\n   - Observed effect: Higher interest rates are taking some heat out of domestic demand, including housing markets.\n2. Responsible fiscal policy\n   - Principle: Protect the vulnerable without adding fuel to inflation.\n   - Recommended design:\n     - Fiscal measures should be temporary and targeted, with a laser-sharp focus on lower-income households.\n     - Where high energy prices persist, provide direct help to low- and middle-income families and minimize use of price controls.\n     - Avoid prolonged price controls: not affordable nor effective.\n     - Avoid indiscriminate broad-based fiscal support that would boost demand and complicate inflation control.\n   - Analogy: While monetary policy is hitting the brakes, fiscal policy should not be stepping on the accelerator.\n3. Joint efforts to support emerging market and developing economies\n   - Current pressures: Stronger dollar, high borrowing costs, and capital outflows create a triple blow.\n   - Probability metric: The probability of portfolio outflows from emerging markets over the next three quarters has risen to 40 percent.\n   - Policy recommendations:\n     - Maintain exchange rate flexibility.\n     - Adopt proactive and precautionary steps before crises emerge.\n     - Use the IMF’s Integrated Policy Framework to calibrate policy mixes.\n     - Utilize IMF precautionary lending tools to support countries.\n   - Debt distress concerns:\n     - More than a quarter of emerging economies have either defaulted or had bonds trading at distressed levels.\n     - Over 60 percent of low-income-countries are in—or at high risk of—debt distress.\n     - Risk: A widening debt crisis harming people, global growth, and financial stability.\n     - Call to action: Large creditors such as China and the private sector have a responsibility to act; the G-20 Common Framework exists to support debt resolution for low-income countries but must become faster and more predictable."
    },
    {
      "heading": "Revitalize and Transform",
      "content": "Transformational reforms and IMF support:\n- Public finances:\n  - Use medium-term fiscal frameworks to make finances more sustainable and create fiscal space.\n  - Reinvest fiscal space in people and productivity: health, education, and stronger safety nets.\n- Digital and labor transformation:\n  - Invest in digital infrastructure to enable innovation and efficient digital government services.\n  - Implement policies to train and enable a digital-ready workforce, especially to help women and young people join and stay in the workforce.\n- International cooperation priorities:\n  - Food insecurity:\n    - Current scale: 345 million people affected by acute food insecurity.\n    - IMF response: new “food shock window” as part of emergency financing targeted to countries most affected by terms of trade shocks.\n  - Climate change:\n    - Described as an existential threat that requires decisive action (COP27 referenced as an imminent forum).\n    - IMF instrument: Resilience and Sustainability Trust (first-ever long-term lending tool).\n      - Pledges already received: $40 billion.\n      - Objective: leverage a multiple of that in private investment to provide the trillions of dollars needed for adaptation and mitigation.\n- IMF operational achievements and support statistics:\n  - Capacity development: Supported 174 countries over the past three years in areas including domestic revenue mobilization, debt sustainability, and public investment management.\n  - Financial support since the pandemic began:\n    - $258 billion provided to 93 countries.\n  - Financial support since Russia’s invasion of Ukraine:\n    - Supported 16 countries with close to $90 billion.\n  - Additional historical action: Last year’s historic $650 billion SDR allocation referenced.\n- Institutional commitment: IMF has been stepping up its support and will continue to do so in a more shock-prone world."
    },
    {
      "heading": "Conclusion",
      "content": "- Closing metaphor: Athena, patroness of weaving—call to “weave a new economic and social fabric” that is stronger and more resilient.\n- Collective message: By working together—as done during the Covid crisis—countries can build a brighter and more prosperous future for all.\n\nSpeech: \"Navigating A More Fragile World\" by Kristalina Georgieva, Georgetown University, Washington, D.C., October 6, 2022.\n\n---\n\n\n References\n\n- https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva\n- United States and the IMF\n- Speeches\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2022/10/06/sp-2022-annual-meetings-curtain-raiser"
    }
  ],
  "bullets": [
    "[Markdown version](/en/news/articles/2022/10/06/sp-2022-annual-meetings-curtain-raiser/index.md)",
    "[Structured JSON version](/en/news/articles/2022/10/06/sp-2022-annual-meetings-curtain-raiser/index.json)",
    "[Bundle manifest](/en/news/articles/2022/10/06/sp-2022-annual-meetings-curtain-raiser/bundle-manifest.json)",
    "Authors: Kristalina Georgieva",
    "Published: October 6, 2022",
    "Speaker: Kristalina Georgieva, IMF Managing Director.",
    "Event and date: Georgetown University, Washington, D.C., October 6, 2022.",
    "Framing metaphor: World economy compared to a ship in choppy waters; urgency for wisdom and collective navigation.",
    "Recent shocks cited:",
    "Central diagnosis: Shift from a world of relative predictability to a world with more fragility—greater uncertainty, higher economic volatility, geopolitical confrontations, and more frequent and devastating natural disasters.",
    "Immediate dual agenda:",
    "Annual Meetings focus: Call for early and joint action and a more proactive, precautionary mindset among IMF’s 190 member countries.",
    "Global growth reached 6.1 percent in 2021.",
    "IMF growth projections downgraded three times, now to:",
    "Expectation: Updated World Economic Outlook will downgrade growth for next year (2023).",
    "Recession risk highlighted: Countries accounting for about one-third of the world economy will experience at least two consecutive quarters of contraction this or next year.",
    "Real-income effect: Even when growth is positive, shrinking real incomes and rising prices will make conditions “feel like a recession.”",
    "Global output loss estimate: about $4 trillion between now and 2026 (described as the size of the German economy).",
    "Financial stability risks: Rapid and disorderly repricing of assets could be amplified by pre-existing vulnerabilities, including high sovereign debt and concerns over liquidity in key segments of the financial market.",
    "Uncertainty context: War and pandemic increase likelihood of additional shocks.",
    "High energy and food prices.",
    "Tighter financial conditions.",
    "Lingering supply constraints.",
    "Specific country/region sources of weakness:",
    "Spillovers to emerging and developing countries: reduced demand for exports; severe strains from high food and energy prices.",
    "Public finances:",
    "Digital and labor transformation:",
    "International cooperation priorities:",
    "IMF operational achievements and support statistics:",
    "Institutional commitment: IMF has been stepping up its support and will continue to do so in a more shock-prone world.",
    "Closing metaphor: Athena, patroness of weaving—call to “weave a new economic and social fabric” that is stronger and more resilient.",
    "Collective message: By working together—as done during the Covid crisis—countries can build a brighter and more prosperous future for all.",
    "[https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva](https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva)",
    "[United States and the IMF](http://www.imf.org/external/country/USA/index.htm)",
    "[Speeches](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
  ],
  "alternates": {
    "markdown": "/en/news/articles/2022/10/06/sp-2022-annual-meetings-curtain-raiser/index.md",
    "json": "/en/news/articles/2022/10/06/sp-2022-annual-meetings-curtain-raiser/index.json",
    "bundleManifest": "/en/news/articles/2022/10/06/sp-2022-annual-meetings-curtain-raiser/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-26T01:32:41.630Z"
}