July 21, 2024

IMFC Raises Concerns Over Global Economic Outlook and Ongoing War in Ukraine

Behind the scenes with Managing Director Kristalina Georgieva and IMFC Chair Nadia Calviño during the 2023 Spring Meetings of the World Bank Group and International Monetary Fund in Washington on April 14, 2023. IMF Photo/James Mertz

The International Monetary and Financial Committee (IMFC) has expressed deep concern over the ongoing war in Ukraine and its impact on the global economy, saying that the war has caused immense human suffering and has worsened existing fragilities in the global economy.

It has constrained growth, increased inflation, disrupted supply chains, heightened energy and food insecurity, and elevated financial stability risks. The committee called for the peaceful resolution of conflicts through diplomacy and dialogue, and reiterated its commitment to upholding international law and the multilateral system that safeguards peace and stability.

The meeting on April 14, chaired by the First Vice President of the Government of Spain and Minister for Economy and Digitalization, Ms. Nadia Calviño, discussed the global economic outlook, ongoing conflicts, and natural disasters that have had a significant impact on the global economy.

The committee also expressed sympathy to the people of Türkiye and Syria for the tragic loss of life and widespread destruction caused by the devastating earthquakes in February 2023, and to the people of Malawi, Mozambique, and Madagascar for the loss of life and devastation caused by tropical cyclone Freddy in February and March 2023.

It discussed the challenges faced by the global economy, with successive shocks weighing on the recovery and macro-financial stability. Inflation has moderated somewhat, but underlying price pressures remain sticky. Debt vulnerabilities are elevated, while food and energy insecurity persist, affecting vulnerable countries and people the most. In addition, inequality is increasing, climate shocks are intensifying, and fragmentation risks are rising.

The committee emphasized the importance of decisive, well-calibrated, and agile policies tailored to country-specific circumstances to entrench a sustainable recovery, safeguard macroeconomic and global financial stability, support the vulnerable, and strengthen resilience. The committee also stressed the importance of international cooperation and strengthened multilateralism to bolster global growth, protect the stability of the International Monetary System, address persisting health risks, and accelerate mutually reinforcing efforts toward a green, digital, and inclusive future.

The committee reaffirmed its commitment to a strong, quota-based, and adequately resourced IMF at the center of the global financial safety net. The committee also supported the IMF’s efforts to address ongoing debt challenges in collaboration with partners and welcomed the launch of the Global Sovereign Debt Roundtable (GSDR).

Ms. Nadia Calviño expressed her gratitude to the members of the IMFC for their constructive engagement and reaffirmed Spain’s commitment to the work of the IMF in promoting global economic growth and financial stability. The IMFC’s discussions highlight the need for continued international cooperation and coordination to address the ongoing challenges faced by the global economy.

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