IMF Spring Meetings Update | April 13, 2023

In our daily recap for Thursday, April 13, we spotlight the IMF managing director’s policy agenda, the debate on the global economy, regional economic outlooks, and more.

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Global Policy Agenda

The global economy is at another highly uncertain moment, as tentative signs of stabilization earlier this year have receded and the outlook is increasingly risky, IMF Managing Director Kristalina Georgieva said in her Global Policy Agenda press conference. At the same time, divisions within and across countries are deepening, exacerbated by rising fragmentation. Strong policy action is needed together with pragmatic approaches to find areas of common ground to respond to shared challenges. The IMF is proactively engaging with members to chart a clear course to a stronger and more sustainable path for the global economy, she added. “The world economy has proven remarkably resilient to the multiple shocks of the last three years, but it is yet to overcome the combination of weak growth and sticky inflation,” Georgieva said. Common priorities include restoring price stability and safeguarding financial stability, advancing structural transformations and countering fragmentation, and showing solidarity with the most vulnerable countries.

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IMF Meetings Georgieva presents the Global Policy Agenda (GPA)

Geopolitics and Protectionism Cloud Global Outlook

Panelists at a debate on the global economy broadly agreed that the world would be in better shape in a year’s time, but worried about the risks from geopolitical fragmentation. IMF Managing Director Kristalina Georgieva said the world economy had proved remarkably resilient in the face of repeated shocks, but that geopolitical tensions threatened global growth. For finance professor Raghuram Rajan security considerations were becoming a “front for protectionism of all kinds” and the greatest contribution the United States could make to global development would be to limit fragmentation to strategic areas. Nadia Fettah, Morocco’s finance minister, said fragmentation was a concern for countries like hers that support international cooperation but suffer from problems created a far.“Fragmentation is a risk for the economies of Africa and emerging markets that are the engines of growth.” Poland’s Prime Minister Mateusz Morawiecki added that Russia’s invasion of Ukraine and other geopolitical ructions called for a rethinking of the established economic models and production chains.

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Quote of the Day

Reducing protectionism in services will reduce inequality, especially in industrial economies where inequality is becoming more prevalent.

RAGHURAM RAJAN, PROFESSOR AT THE UNIVERSITY OF CHICAGO’S BOOTH SCHOOL OF BUSINESS

The Regional Economic Outlooks

Asia and the Pacific

Asia is emerging as a pillar strength amid what is shaping up as an otherwise challenging year for the global economy, and China’s reopening will provide fresh momentum. That’s the latest view on the regional outlook from Krishna Srinivasan, director of the IMF’s Asia and Pacific Department, during his briefing. The region will contribute more than 70 percent to global growth this year, though it still faces challenges from inflation, debt, and financial vulnerabilities, he said. The department projects that growth in Asia will accelerate this year to 4.6 percent, a faster pace than forecast in October, largely because of China’s reopening.

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Middle East and Central Asia

Growth in the Middle East and North Africa will slow to 3.1 percent this year due to tight macroeconomic policies, OPEC-plus production cuts and a recent deterioration in global financial conditions, Jihad Azour, the director of the IMF’s Middle East and Central Asia Department, said during a press conference. Growth in Central Asia and the Caucasus is also expected to slow, to 4.2 percent. Azour discussed the impact of recent financial market instability on the region’s banks, stressing that spillovers have been limited. Monetary policy should focus on maintaining or regaining price stability.

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Latin America and Caribbean

Growth in Latin America and the Caribbean is likely to slow to 1.6 percent this year, even as high inflation continues to pose a cost-of-living crisis for the most vulnerable. “We attach an important priority to quickly bringing inflation back to central banks’ target,” Nigel Chalk, Deputy Director of the IMF’s Western Hemisphere Department, said at a press conference. Fiscal policy should help monetary policy in reducing demand pressures to mitigate the risk that inflation becomes entrenched. Tax systems should be redesigned to raise revenues and ensure that the wealthy pay more.

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All Regional Economic Outlooks

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CHART of the Day

China’s reopening will provide fresh momentum for economic growth in Asia and the Pacific. As the Chart of the Day shows, normally the strongest effect from China for the region would be from its demand for investment goods, but this time the biggest effect is from demand for consumption from the country.

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Taming Inflation Expectations Crucial To Bringing Down Prices

The Bank of Canada was among the first central banks to raise interest rates coming out of the pandemic, increasing them by a total of 425 basis points since March 2022. Yet the rate at which Canadian consumers expect prices to rise in the future remains higher than actual inflation, now running at 5 percent. “Inflation expectations need to come down more if we’re going to get inflation down to target,” Bank of Canada chief Tiff Macklem said during a Governor Talks. One lesson central banks have learned is that communication makes it easier to anchor inflation expectations, Macklem told the acting director of the IMF’s Western Hemisphere Department, Nigel Chalk. “Monetary policy works better when everybody understands what we’re doing and…people can plan their budgets with confidence.” The central bank regularly releases growth and inflation projections and recently began to publish summaries of deliberations by the Governing Council, the policy-making body.

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Number of the Day

4X

IMF concessional financing has increased more than four-fold since the onset of Covid. The IMF has called for $4.7 billion in loan resources and $1.6 billion in additional subsidy resources to maintain interest-free support for the most vulnerable countries in the world.

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Photos

India Finance Minister Nirmala Sitharaman participates in a G20 Finance Ministers Dinner.

India Finance Minister Nirmala Sitharaman participates in a G20 Finance Ministers gathering.

Country nameplates used during the 2023 Spring Meetings

IMF staff arranges the country nameplates.

A security officer stands guard outside an entranceway

A participant walks into the IMF building while a security officer stands guard.

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Upcoming Events

IMF African Department Director Aemro Selassie presents the latest Regional Economic Outlook for Sub-Saharan Africa

Press Conference for the Economic Outlook in Sub-Saharan Africa

APRIL 14, 8:45 AM ET

African Department Director Abebe Aemro Selassie presents the latest Regional Economic Outlook for Sub-Saharan Africa and answers questions

Event Details

Press Conference for the Economic Outlook in Europe

APRIL 14, 10:30 AM ET

Mr. Kammer will address questions about Europe’s economy, including potential risks of recession and assessments of the region’s financial and banking sectors..

Event Details

IMF Seminar: How Should Central Banks Battle High Inflation?

APRIL 14, 11:30 PM ET

The discussion will focus on central banks’ strategies to reduce inflation.

Event Details

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IMF Spring Meetings Update | April 13, 2023

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Global Policy Agenda

Geopolitics and Protectionism Cloud Global Outlook

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Quote of the Day

The Regional Economic Outlooks

Asia and the Pacific

Latin America and Caribbean

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CHART of the Day

Taming Inflation Expectations Crucial To Bringing Down Prices

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Number of the Day

4X

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Photos

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Upcoming Events

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IMF’s Work

RESOURCES

TOPICS

Flagship Publications

Other Publications

IMF reports and publications by country

Regional Offices

All News

See Also

For Journalists

Press Center

RESOURCES

FLAGSHIPS

KEY SERIES

IMF NOTES

IMF Spring Meetings Update | April 13, 2023

Global Policy Agenda

Geopolitics and Protectionism Cloud Global Outlook

The Regional Economic Outlooks

Asia and the Pacific

Latin America and Caribbean

Taming Inflation Expectations Crucial To Bringing Down Prices

Number of the Day

4X

Photos

Upcoming Events