(AGENPARL) – ven 07 ottobre 2022 The annual meetings bring together central bankers, finance ministers and global thought-leaders from 190 member nations []
Dear Colleague, welcome to a special edition of the Weekend Read
In this special edition, we look forward to next week’s annual meetings of the IMF and World Bank. In a curtain-raiser speech on Thursday, IMF Managing Director Kristalina Georgieva called on policymakers to “act now and act together” to stabilize the world economy amid a fundamental shift towards fragility. We feature chapters from the Fund’s forthcoming flagship reports on global growth, climate change and financial stability and spotlight next week’s must-watch sessions.
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The world is becoming more fragile and less predictable in what represents a fundamental shift for the global economy, the IMF’s managing director said on Thursday.
Speaking at Georgetown University in Washington, Kristalina Georgieva said rules-based international economic cooperation, low interest rates and low inflation were being replaced by geopolitical confrontation, economic volatility and more devastating natural disasters—“a world in which any country can be thrown off course more easily and more often.”
Countries accounting for about one-third of the global economy will slide into recession this or next year, the IMF will reveal in downgrades to its world outlook next week. “Overall, we expect a global output loss of about $4 trillion between now and 2026,” the managing director said. “This is the size of the German economy—a massive setback for the world economy.”
Georgieva called on the policymakers to “act now and act together” to stabilize the global economy by addressing the most immediate challenges. This means suppressing inflation, putting in place responsible fiscal policy that does not fuel inflation, and supporting emerging market and developing economies that are under pressure from a stronger dollar and capital outflows.
“Working together, we can we build a brighter and more prosperous future for all.”
After her speech, the managing director took questions on global debt, the IMF’s rescue resources and reforms to amplify the voices of emerging market and developing economies.
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Countries will pay an economic price for curbing greenhouse gases, but the longer they wait to shift to carbon neutrality, the larger the costs.
But climate policies must be credible. Otherwise, investment in low-emitting technologies will not take place. This would slow the transition and policies would have to become more stringent to reach the same decarbonization goal, the authors say.
“We estimate that only partially credible policies could almost double the cost of transitioning to renewables by 2030.”
Penny Goldberg of the Peterson Institute for International Economics underscored the “very serious consequences” for global output and inflation of climate-policy delays in a discussion with the chapter’s authors.
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Three factors are working together to contain the risks: the underlying shocks to inflation are coming from outside the labor market, falling real wages are helping to reduce price pressures, and central banks are aggressively tightening monetary policy.
How inflation expectations are formed matters for wage and price dynamics and affects what actions policymakers should take after an inflationary shock. When expectations are more backward-looking, monetary policy tightening—including through clear central bank communications— should be stronger and more front-loaded in response to an inflation shock.
“In that sense, recent tightening actions by many central banks—calibrated to economy-specific circumstances—are encouraging. They will help to prevent high inflation from becoming entrenched and inflation from deviating from target for too long,” Bluedorn writes.
In a discussion with the authors, the Peterson Institute’s Olivier Blanchard welcomed the main findings and highlighted areas for further research.
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Global output losses are expected to reach about $4 trillion between now and 2026. This is the size of Germany’s economy.
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In such funds, the lag between investors selling shares and fund managers selling hard-to-sell assets mean that the price paid to investors may not fully reflect all trading costs associated with the assets they sold. Instead, the remaining investors bear those costs, creating incentives to redeem shares before others do, which may lead to outflow pressures.
“Pressures from these investor runs could force funds to sell assets quickly, which would further depress valuations. That in turn would amplify the impact of the initial shock and potentially undermine the stability of the financial system,” the authors conclude.
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Private climate financing must play a pivotal role as emerging market and developing economies try to curb greenhouse-gas emissions and cope with the effects of climate change.
Estimates vary, but these economies must collectively invest at least $1 trillion in energy infrastructure and $3 trillion-$6 trillion across all sectors a year by 2030 to mitigate climate change. A further $140 billion to $300 billion a year is needed to adapt to the consequences of climate change, such as rising seas and longer droughts.
Multilateral development banks will play a key role in financing vital low-carbon infrastructure projects for less-developed economies, they add.
MONDAY, OCTOBER 10
8:30 AM – 9:30 AM ET
TUESDAY, OCTOBER 11
9:00 AM – 9:45 AM ET
SPEAKERS: Pierre-Olivier Gourinchas, Petya Koeva Brooks, Daniel Leigh
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10:15 AM – 11:00 AM ET
SPEAKERS: Tobias Adrian, Fabio Natalucci, Ranjit Singh
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2:00 PM – 3:00 PM ET
MODERATOR: Martin Wolf
SPEAKERS: Gita Gopinath, Elena Dugger, Axel Weber, Anna Gelpern, Lee Buchheit
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3:30 PM – 4:30 PM ET
MODERATOR: Stephanie Flanders
SPEAKERS: Abebe Selassie, Situmbeko Musokotwane, Justin Wolfers, Sarah Cumbers, Gilbert Houngbo
WEDNESDAY, OCTOBER 12
8:30 AM – 9:15 AM ET
SPEAKERS: Vitor Gaspar, Paolo Mauro, Paulo Medas
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9:00 AM – 10:00 AM ET
SPEAKERS: Timothy N.J. Antoine, Gita Gopinath, John Rwangombwa
THURSDAY, OCTOBER 13
8:00 AM – 8:45 AM ET
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2:00 PM – 3:00 PM ET
MODERATOR: Richard Quest
SPEAKERS: Kristalina Georgieva, Mohamed El-Erian, Zainab Ahmed, Mark Carney, Paschal Donohoe
FRIDAY, OCTOBER 14
2:15 PM – 2:45 PM ET
SPEAKERS: Kristalina Georgieva, Nadia Calviño
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4:00 PM – 5:00 PM ET
MODERATOR: Kathleen Hays
SPEAKERS: Bo Li, Agustín Carstens, Vera Songwe, Perry Warjiyo
TODAY’S MEDIA PARTNERS
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