WASHINGTON: International Monetary Fund member countries expressed concerns on Friday about strains from growing trade tensions, artificial intelligence advances, and global market shifts.
The IMF steering committee statement nevertheless expressed hope for resilient economic growth and continued disinflation.
The International Monetary and Financial Committee statement flagged downside risks from low growth, high debt, extreme weather, global imbalances, and wars.
“Major policy shifts in trade and other areas are reconfiguring global markets and policy frameworks, heightening uncertainty,“ said the statement from IMFC Chair Mohammed Al-Jadaan.
“These changes, as well as transformative forces such as digitalization and demographic shifts, bring challenges but also opportunities.”
The statement noted that disinflation progress would vary significantly across different countries.
IMF executives observed this week that tariff-imposing countries like the United States could face prolonged higher inflation.
Some Asian economies including China meanwhile risk potential deflation according to IMF assessments.
The committee statement strongly emphasized the need for independent central banks to maintain policy credibility.
“Central banks remain strongly committed to maintaining price stability, in line with their respective mandates, and will continue to adjust their policies in a data-dependent and well-communicated manner,“ the statement affirmed.
It also called for addressing financial vulnerabilities by strengthening surveillance of systemic risks from AI, non-bank financial institutions, and digital assets.
The statement highlighted the importance of harnessing benefits from financial and technological innovation while managing associated risks. – Reuters
