IMFC warns of rising risks to global economy — Asharq Al-Awsat
The International Monetary and Financial Committee (IMFC), at its 54th meeting in Bangkok, Thailand, warned that wars, conflicts, supply chain disruptions and trade tensions are increasing uncertainty and price pressures in the global economy. Price pressures are felt particularly strongly by the poorest and most vulnerable countries, Asharq Al-Awsat reports.
IMFC Chair, Saudi Arabia’s Finance Minister Mohammed Al-Jadaan, said that strengthening economic and financial resilience, enhancing international cooperation and ending conflicts are necessary to achieve sustainable growth and long-term stability.
Weaker resilience buffers
The committee’s concluding statement said that the global economy had weathered a series of recent shocks better than expected. At the same time, the buffers that ensured this resilience have diminished, so its continued preservation is not guaranteed.
The IMFC pointed to risks of escalating conflicts, intensifying trade disputes, growing public debt and the cost of refinancing it. The committee also warned that higher sovereign bond yields in systemically important economies could affect global financial conditions, particularly given the substantial debt refinancing needs of many countries.
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Additional factors of uncertainty include technological changes, demographic shifts, extreme weather events, natural disasters and geoeconomic fragmentation. At the same time, the rapid development of artificial intelligence technologies is already supporting investment and trade and could potentially increase productivity, although the economic benefits are distributed unevenly.
Calls for fiscal discipline
The committee called on governments to urgently address fiscal vulnerabilities, strengthen debt resilience and use sound medium-term fiscal frameworks. At the same time, according to the IMFC’s position, countries should protect the most vulnerable population groups and priority investments that support productivity and growth.
The IMFC stressed the importance of central bank independence for confidence in monetary policy and stable inflation expectations. The committee also welcomed the “Bangkok Blueprint” on strengthening digital finance protection, improving resilience to cyberattacks and combating digital fraud.
Separately, meeting participants called for improving sovereign debt restructuring mechanisms, including within the Common Framework, and increasing the transparency of debt obligations. The committee also welcomed the extension of Al-Jadaan’s mandate as chair for another year.
