Development Committee: The Managing Director's Written Statement April 2023

Policy Papers, April 12, 2023

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Tentative signs of stabilization of the global economy have receded with recent financial sector turmoil.
Headline inflation is moderating on the back of retreating commodity prices, but sticky underlying price pressures are complicating disinflation efforts.
Growth in low-income developing countries (LIDCs) has been higher than in the rest of the world, but its level is insufficient to address momentous challenges that range from combatting poverty to coping with climate change.
Elevated debt levels and higher borrowing costs due to tighter global financial conditions leave policymakers with little fiscal space.
Multilateral cooperation is more important than ever as many challenges are global, but it is acutely under threat from fragmentation.

Preserve or—in some cases—restore debt sustainability.
Achieving debt sustainability often requires better targeting of fiscally costly support measures taken in response to the COVID and commodity price shocks.

Policymakers must balance near-term priorities (inflation, financial stability, protection of vulnerable groups) with medium-term needs to restore fiscal space and debt sustainability amidst tighter global financial conditions and elevated debt.

Development Committee: The Managing Director's Written Statement April 2023 (April 12, 2023).