{
  "title": "Opening Remarks by the Deputy Managing Director, Kenji Okamura",
  "publication": "IMF News, November 17, 2022",
  "sourceUrl": "https://www.imf.org/en/news/articles/2022/11/16/sp111722dmdokamura-oap-conference",
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  "summary": "Opening Remarks by the Deputy Managing Director, Kenji Okamura at the conference on Managing Financial Risks in a Shock Prone World - Lessons from the past and challenges ahead",
  "publishDate": "2022-11-17",
  "sections": [
    {
      "heading": "Event and context",
      "content": "- Remarks delivered at the conference on Managing Financial Risks in a Shock Prone World - Lessons from the past and challenges ahead\n- Location: Tokyo\n- Date: November 17, 2022\n- Hosted with the University of Tokyo’s Center for Advanced Research in Finance; Regional Office for Asia and the Pacific provided organizational leadership"
    },
    {
      "heading": "Outlook",
      "content": "- The global economy is facing a riskier and more shock-prone environment.\n- Three powerful forces holding back the global economy:\n  - i) the Russian invasion of Ukraine;\n  - ii) the need to tighten monetary policy, amid a cost-of-living crisis and persistent and broadening inflation pressures; and,\n  - iii) the slowdown in China.\n- IMF growth projections referenced:\n  - Global growth slowed from 6.0 percent last year to 3.2 percent this year (projection given during the IMF Annual Meetings one month prior).\n  - For 2023, the IMF lowered its forecast to 2.7 percent.\n- Financial stability and vulnerability observations:\n  - Financial stability risks have increased with rising interest rates.\n  - Vulnerabilities are elevated in the sovereign and nonbank financial institutions sectors.\n  - Banks in advanced economies appear to be in a stronger position due to regulatory reform efforts following the Global Financial Crisis.\n- Pressures on emerging markets and developing countries:\n  - Subject to capital outflows, dollar strength, and volatile commodity prices.\n  - Many are dealing with elevated debt levels pushed up by the pandemic.\n  - Rising global interest rates increase difficulty of sustaining debt burdens.\n  - More than 60 percent of low-income countries and over 25 percent of emerging markets are in or at risk of debt distress.\n- Other systemic risks:\n  - Natural disasters are causing human suffering and economic losses; climate change is making these events more severe and frequent.\n  - Geoeconomic fragmentation risks damaging global production and trade networks with adverse consequences for growth and inflation.\n  - Climate and cyber-related vulnerabilities identified as potential sources of major shocks."
    },
    {
      "heading": "Policy priorities",
      "content": "- Bring inflation back to central bank targets:\n  - Stay the course on monetary policy despite near-term costs in terms of lower growth and higher unemployment.\n  - Emphasis that failing to control inflation now would lead to much greater and longer-lasting pain later.\n  - Recognizes challenge of getting monetary policy settings just right amid heightened uncertainty.\n- Fiscal policy guidance:\n  - Broad fiscal support was appropriate during the pandemic but is unsustainable over the longer run and would add fuel to inflation.\n  - Fiscal support should be targeted to protect the most vulnerable from rising prices.\n  - Broad energy subsidies should be avoided as they are generally regressive and ineffective.\n  - Fiscal buffers should be rebuilt, and debt reduced.\n  - Timely, effective, and well-coordinated debt resolution mechanisms are needed, building on progress under the G20 Common Framework.\n- Policy responses for countries facing capital outflows:\n  - Recommendations are country specific.\n  - Exchange rate flexibility helps, especially when foreign currency debt is low.\n  - For some emerging market economies, a mix of tools could be helpful: interest rate policy, macroprudential actions, foreign exchange intervention, and capital flow management measures to mitigate monetary policy tradeoffs and reduce financial stability risks.\n- Building resilience to new shocks:\n  - Prioritize strengthening resilience to climate risks and cyber-related vulnerabilities."
    },
    {
      "heading": "Conclusion",
      "content": "- The world economy and financial systems are grappling with the legacy of the pandemic and Russia’s invasion of Ukraine.\n- Shocks are likely to be more frequent in the future; preparation requires building buffers and strengthening resilience.\n- Conferences provide a platform to exchange experiences, learn from one another, and develop novel ideas; the speaker looks forward to insightful and open discussions.\n\nOpening Remarks by the Deputy Managing Director, Kenji Okamura, Tokyo, November 17, 2022 (International Monetary Fund).\n\n---\n\n\n References\n\n- Kenji Okamura\n- Russian Federation and the IMF\n- Speeches\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2022/11/16/sp111722dmdokamura-oap-conference"
    }
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    "Published: November 17, 2022",
    "Remarks delivered at the conference on Managing Financial Risks in a Shock Prone World - Lessons from the past and challenges ahead",
    "Location: Tokyo",
    "Date: November 17, 2022",
    "Hosted with the University of Tokyo’s Center for Advanced Research in Finance; Regional Office for Asia and the Pacific provided organizational leadership",
    "The global economy is facing a riskier and more shock-prone environment.",
    "Three powerful forces holding back the global economy:",
    "IMF growth projections referenced:",
    "Financial stability and vulnerability observations:",
    "Pressures on emerging markets and developing countries:",
    "Other systemic risks:",
    "Bring inflation back to central bank targets:",
    "Fiscal policy guidance:",
    "Policy responses for countries facing capital outflows:",
    "Building resilience to new shocks:",
    "The world economy and financial systems are grappling with the legacy of the pandemic and Russia’s invasion of Ukraine.",
    "Shocks are likely to be more frequent in the future; preparation requires building buffers and strengthening resilience.",
    "Conferences provide a platform to exchange experiences, learn from one another, and develop novel ideas; the speaker looks forward to insightful and open discussions.",
    "[Kenji Okamura](https://www.imf.org/en/About/senior-officials/Bios/kenji-okamura)",
    "[Russian Federation and the IMF](http://www.imf.org/external/country/RUS/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)"
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