IMF Strategy Chief Calls for Fiscal and Monetary Policy Credibility to Ensure Price Stability
IMF Strategy Chief Highlights Economic Uncertainty and Policy Recommendations
By Andrea Shalal
Global Economic Shocks and Uncertainty
WASHINGTON, July 15 (Reuters) - The International Monetary Fund's new strategy chief urged government officials on Wednesday to maintain credibility in fiscal and monetary policy with the aim of keeping prices stable amid global economic uncertainty.
Christian Mumssen, the fund's new director of strategy, cited a rapid succession of major shocks to the economy in recent years, including the coronavirus pandemic, cost-of-living crises, trade frictions and wars in Ukraine and the Middle East.
Technological and Geopolitical Transformations
"Technologically, artificial intelligence and digital finance are advancing at a speed few of us anticipated. And geopolitically, the post-war global order is giving way to a more fragmented, multipolar world," he told an event at the Atlantic Council.
"The global economy has proved remarkably resilient in the face of these forces. But the sheer scale of what is under way creates an exceptionally high degree of uncertainty - and we should expect the unexpected."
Policy Recommendations for Governments
Maintaining Fiscal and Monetary Credibility
Governments must pay close attention to sound public finances and debt, inflation, jobs and growth, he said, adding that price stability is likely to be threatened by frequent supply disruptions.
Enhancing Resilience and Managing Uncertainty
He said governments should enhance resilience from supply shocks and global political tensions and work to manage uncertainty.
Addressing Technological Innovation
Mumssen also said it was critical to address fast-moving technical innovations, including to ensure the rapid AI transformation translates to inclusive growth.
International Cooperation and Global Governance
The big difference in the current global financial situation is that major transformations are happening at the same time, he said.
He encouraged countries to work with the fund on solutions.
"The problem is: just when massive structural challenges and a new technological revolution would call for greater international cooperation, the global governance system is fragmenting," Mumssen added.
(Reporting by Doina Chiacu; Editing by Chizu Nomiyama)
