Adapting the IMF to a Changing World
IMF News, July 15, 2026
Source details
- Canonical URL
- Adapting the IMF to a Changing World
Other formats
Bibliographic details
- Published: July 15, 2026
A changing global context
- Recent major shocks: the pandemic, a cost-of-living crisis, escalating trade frictions, and wars in Ukraine and the Middle East.
- Global inflation peaked at close to 9.5 percent in 2022.
- Roughly four-fifths of the world's central banks were tightening monetary policy concurrently.
- Demographic shifts: on current projections, the average age of the world's population will rise by eleven years between 2020 and the end of this century.
- Environmental pressures: climate change intensifies and extreme weather events are becoming more frequent.
- Technological change: rapid advances in artificial intelligence and digital finance.
- Geopolitical change: movement toward a more fragmented, multipolar world.
- Institutional strength: 191 countries have a seat at the IMF table.
Four guiding principles for countries and the Fund
- Preserve macroeconomic stability
- Stability is a precondition for prosperity; instability undermines private investment and growth.
- Key policy areas: sound public finances and debt, inflation control, growth and jobs, external balances, and financial stability.
- Numeric context:
- Fiscal deficits remain about 1.5 percentage points of GDP above pre-COVID levels.
- Global public debt is projected to reach 100 percent of GDP by 2029.
- For the median low-income country, interest payments on public debt doubled over the last decade.
- Emphasis on addressing large and rising imbalances in both surplus and deficit countries to avoid disorderly adjustment.
- Prudence and targeted policy responses; limits to what fiscal and monetary policy alone can achieve.
- Enhance resilience
- Supply shocks and geopolitical tensions elevate economic security concerns.
- Between 2023 and 2025, the IMF counted more than 10,000 trade-distorting industrial policy interventions worldwide.
- Countries are responding by securing supply chains, diversifying economic relationships, and strengthening energy security.
- Financial innovation (non-bank financial institutions, digital finance) offers efficiency gains but introduces new channels for shock transmission and new risks.
- Need for adequate regulation, supervision, and risk monitoring.
- Crises lead to learning and stronger preparedness for subsequent shocks.
- Manage uncertainty
- Projecting growth, employment, inflation, fiscal balances, and interest rates is increasingly difficult.
- Three clear lessons:
- Agility and adaptability are key to managing shocks and structural change.
- Policy credibility matters more than ever; preserve credible medium-term fiscal frameworks and firm commitment to price stability.
- Think in terms of scenarios, plan contingencies, and respond with agility when the unexpected arrives.
- Enable the private sector
- Government roles: provide public goods, adequate social protection, and a stable enabling environment for private activity.
- Embrace innovation to raise productivity growth and help offset negative impacts from other shocks.
- Digital finance is enduring; AI could be as consequential as the Industrial Revolution with major implications for growth, employment, distribution, and geopolitics.
- Attention required to macro-financial impacts of technological transformations and to ensure inclusive distribution of benefits.
How the IMF is preparing: five priorities and institutional responses
- Five IMF priorities:
- Managing shocks and uncertainty and building resilient policy frameworks.
- Reducing external imbalances.
- Identifying and addressing debt risks.
- Guarding financial stability amid rapid financial innovation.
- Tailoring financial support to countries facing balance of payments challenges.
- Major reviews and toolkit upgrades (five examples)
- Comprehensive Surveillance Review
- Reaffirms IMF core strength of safeguarding macroeconomic stability.
- Emphasis on greater use of scenarios and contingent policy advice; extend practices used in the World Economic Outlook to bilateral surveillance.
- Premium on tailoring advice to country circumstances given asymmetric shock impacts.
- Review of Program Design and Conditionality
- Found the Fund responded well and with agility during the exceptional post-COVID shock period.
- Going forward, increased emphasis on contingency planning and on fewer, more targeted, and deeper reforms.
- Updated Debt Sustainability Framework for Low-Income Countries
- Will better integrate domestic debt, recognizing it is now a growing share of the total.
- Aims to provide a stronger tool for assessing longer-term trends and trade-offs amid demographic, climate, and development challenges.
- Review of the Financial Sector Assessment Program (FSAP)
- Sharpening early-warning capacity.
- Stronger coverage of emerging risks: bank–non-bank financial institution linkages, technology, and cyber.
- Better integration of FSAP findings into country-level policy dialogue.
- Upgrading the toolkit for External Sector Assessments
- Motivated by rising global imbalances between current account surplus and deficit countries.
- Will evaluate how macro-economic trends, trade, and industrial policies interact to shape external balances and patterns of growth.
- Highlighted as a priority for both the G20 and the G7 presidencies of the United States and France.
Institutional role and closing observations
- The IMF will play its part but recognizes it does not have all the answers and must navigate uncertainty like all actors.
- The Fund's universality (191 members) provides a common platform to identify problems and share solutions.
- Ultimately, countries must anticipate, formulate, and implement appropriate macroeconomic policies and build domestic consensus; the IMF is there to help, convene, and guide.
Remarks at the Atlantic Council by Christian Mumssen, IMF Director of Strategy, Policy and Review; July 15, 2026.