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WORLD ECONOMIC OUTLOOK: Navigating Global Divergences
What Has Held Core Inflation Back in Advanced Economies?
April 2018, Box 1.2
Te Role of Metals in the Economics of Electric Vehicles
April 2018, Box 1.SF.1
Inflation Outlook: Regions and Countries
October 2018, Box 1.4
Commodity Market Developments and Forecasts, with a Focus on Recent Trends in
October 2018, Chapter 1,
Energy Demand
Special Feature
Te Demand and Supply of Renewable Energy
October 2018, Box 1.SF.1
Challenges for Monetary Policy in Emerging Markets as Global Financial Conditions Normalize
October 2018, Chapter 3
Inflation Dynamics in a Wider Group of Emerging Market and Developing Economies
October 2018, Box 3.1
Commodity Special Feature
April 2019, Chapter 1,
Special Feature
Commodity Market Developments and Forecasts
October 2019, Chapter 1,
Special Feature
Commodity Market Developments and Forecasts
April 2020, Chapter 1,
Special Feature
Commodity Market Developments and Forecasts
October 2020, Chapter 1,
Special Feature
What Is Happening with Global Carbon Emissions in 2019?
October 2020, Chapter 1,
Special Feature Box 1.SF.1
Commodity Market Developments and Forecasts
April 2021, Chapter 1,
Special Feature
House Prices and Consumer Price Inflation
October 2021, Box 1.1
Commodity Market Developments and Forecasts
October 2021, Chapter 1,
Special Feature
Inflation Scares
October 2021, Chapter 2
Core Inflation in the COVID-19 Crisis
October 2021, Box 2.2
Market Developments and the Pace of Fossil Fuel Divestment
April 2022, Special Feature
Dissecting Recent WEO Inflation Forecast Errors
October 2022, Box 1.1
Market Power and Inflation during COVID-19
October 2022, Box 1.2
Commodity Market Developments and Food Inflation Drivers
October 2022, Special Feature
Commodity Market Developments and the Macroeconomic Impact of Declines in
April 2023, Chapter 1,
Fossil Fuel Extraction
Special Feature
Commodity Prices and Monetary Policy: High Frequency Analysis
October 2023, Commodity
Special Feature
Online Annex 1.1
Firms’ Inflation Expectations, Attention, and Monetary Policy Effectiveness
October 2023, Box 2.1
Energy Subsidies, Inflation, and Expectations: Unpacking Euro Area Measures
October 2023, Box 2.3
Fragmentation and Commodity Markets: Vulnerabilities and Risks
October 2023, Chapter 3
Commodity Trade Tensions: Evidence from Tanker Traffic Data
October 2023, Box 3.1
V. Fiscal Policy
Te Great Divergence of Policies
April 2013, Box 1.1
Public Debt Overhang and Private Sector Performance
April 2013, Box 1.2
Is It Time for an Infrastructure Push? Te Macroeconomic Effects of Public Investment
October 2014, Chapter 3
Improving the Efficiency of Public Investment
October 2014, Box 3.2
Te Macroeconomic Effects of Scaling Up Public Investment in Developing Economies
October 2014, Box 3.4
Fiscal Institutions, Rules, and Public Investment
October 2014, Box 3.5
Commodity Booms and Public Investment
October 2015, Box 2.2
Cross-Border Impacts of Fiscal Policy: Still Relevant
October 2017, Chapter 4
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SELECTED TOPICS
Te Spillover Impact of U.S. Government Spending Shocks on External Positions
October 2017, Box 4.1
Macroeconomic Impact of Corporate Tax Policy Changes
April 2018, Box 1.5
Place-Based Policies: Rethinking Fiscal Policies to Tackle Inequalities within Countries
October 2019, Box 2.4
Coming Down to Earth: How to Tackle Soaring Public Debt
April 2023, Chapter 3
Market Reforms to Promote Growth and Debt Sustainability
April 2023, Box 3.1
Fiscal Imprudence and Inflation Expectations: Te Role of Monetary Policy Frameworks
October 2023, Box 2.2
VI. Monetary Policy, Financial Markets, and Flow of Funds
Te Great Divergence of Policies
April 2013, Box 1.1
Taper Talks: What to Expect When the United States Is Tightening
October 2013, Box 1.1
Credit Supply and Economic Growth
April 2014, Box 1.1
Should Advanced Economies Worry about Growth Shocks in Emerging Market Economies?
April 2014, Chapter 2,
Spillover Feature
Perspectives on Global Real Interest Rates
April 2014, Chapter 3
Housing Markets across the Globe: An Update
October 2014, Box 1.1
U.S. Monetary Policy and Capital Flows to Emerging Markets
April 2016, Box 2.2
A Transparent Risk-Management Approach to Monetary Policy
October 2016, Box 3.5
Will the Revival in Capital Flows to Emerging Markets Be Sustained?
October 2017, Box 1.2
Te Role of Financial Sector Repair in the Speed of the Recovery
October 2018, Box 2.3
Clarity of Central Bank Communications and the Extent of Anchoring of Inflation Expectations
October 2018, Box 3.2
Can Negative Policy Rates Stimulate the Economy?
April 2020, Box 2.1
Dampening Global Financial Shocks in Emerging Markets: Can Macroprudential Regulation Help?
April 2020, Chapter 3
Macroprudential Policies and Credit: A Meta-Analysis of the Empirical Findings
April 2020, Box 3.1
Do Emerging Markets Adjust Macroprudential Regulation in Response to Global Financial Shocks?
April 2020, Box 3.2
Rising Small and Medium-Sized Enterprise Bankruptcy and Insolvency Risks:
Assessment and Policy Options
April 2020, Box 1.3
Shifting Gears: Monetary Policy Spillovers during the Recovery from COVID-19
April 2021, Chapter 4
Emerging Market Asset Purchase Programs: Rationale and Effectiveness
April 2021, Box 4.1
Monetary Expansions and Inflationary Risks
October 2021, Box 1.3
Policy Responses and Expectations in Inflation Acceleration Episodes
October 2021, Box 2.3
Determinants of Neutral Interest Rates and Uncertain Prospects
April 2022, Box 1.2
Private Sector Debt and the Global Recovery
April 2022, Chapter 2
Rising Household Indebtedness, the Global Saving Glut of the Rich, and the Natural Interest Rate
April 2022, Box 2.2
House Prices: Coming Off the Boil
April 2023, Box 1.1
Monetary Policy: Speed of Transmission, Heterogeneity, and Asymmetries
April 2023, Box 1.2
Te Natural Rate of Interest: Drivers and Implications for Policy
April 2023, Chapter 2
Spillovers to Emerging Market and Developing Economies
April 2023, Box 2.3
Monetary and Fiscal Interactions
April 2023, Box 3.2
Managing Expectations: Inflation and Monetary Policy
October 2023, Chapter 2
VII. Labor Markets, Poverty, and Inequality
Reforming Collective-Bargaining Systems to Achieve High and Stable Employment
April 2016, Box 3.2
Understanding the Downward Trend in Labor Shares
April 2017, Chapter 3
Labor Force Participation Rates in Advanced Economies
October 2017, Box 1.1
Recent Wage Dynamics in Advanced Economies: Drivers and Implications
October 2017, Chapter 2
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Labor Market Dynamics by Skill Level
October 2017, Box 2.1
Worker Contracts and Nominal Wage Rigidities in Europe: Firm-Level Evidence
October 2017, Box 2.2
Wage and Employment Adjustment after the Global Financial Crisis: Firm-Level Evidence
October 2017, Box 2.3
Labor Force Participation in Advanced Economies: Drivers and Prospects
April 2018, Chapter 2
Youth Labor Force Participation in Emerging Market and Developing Economies versus
Advanced Economies
April 2018, Box 2.1
Storm Clouds Ahead? Migration and Labor Force Participation Rates
April 2018, Box 2.4
Are Manufacturing Jobs Better Paid? Worker-Level Evidence from Brazil
April 2018, Box 3.3
Te Global Financial Crisis, Migration, and Fertility
October 2018, Box 2.1
Te Employment Impact of Automation Following the Global Financial Crisis:
Te Case of Industrial Robots
October 2018, Box 2.2
Labor Market Dynamics in Select Advanced Economies
April 2019, Box 1.1
Worlds Apart? Within-Country Regional Disparities
April 2019, Box 1.3
Closer Together or Further Apart? Within-Country Regional Disparities and Adjustment in
Advanced Economies
October 2019, Chapter 2
Climate Change and Subnational Regional Disparities
October 2019, Box 2.2
Te Macroeconomic Effects of Global Migration
April 2020, Chapter 4
Immigration: Labor Market Effects and the Role of Automation
April 2020, Box 4.1
Inclusiveness in Emerging Market and Developing Economies and the Impact of COVID-19
October 2020, Box 1.2
Recessions and Recoveries in Labor Markets: Patterns, Policies, and Responses to the
COVID-19 Shock
April 2021, Chapter 3
Jobs and the Green Economy
October 2021, Box 1.2
Te Puzzle of Tight Labor Markets: US and UK Examples
April 2022, Box 1.1
Inequality and Public Debt Sustainability
April 2022, Box 2.1
A Greener Labor Market: Employment, Policies, and Economic Transformation
April 2022, Chapter 3
Te Geography of Green- and Pollution-Intensive Jobs: Evidence from the United States
April 2022, Box 3.1
A Greener Post-COVID Job Market?
April 2022, Box 3.2
Wage Dynamics Post-COVID-19 and Wage Price Spiral Risks
October 2022, Chapter 2
Pass-Trough from Wages to Prices: Estimates from the United States
October 2022, Box 2.1
VIII. Exchange Rate Issues
Exchange Rate Regimes and Crisis Susceptibility in Emerging Markets
April 2014, Box 1.4
Exchange Rates and Trade Flows: Disconnected?
October 2015, Chapter 3
Te Relationship between Exchange Rates and Global-Value-Chain-Related Trade
October 2015, Box 3.1
Measuring Real Effective Exchange Rates and Competitiveness: Te Role of Global Value Chains
October 2015, Box 3.2
Labor Force Participation Rates in Advanced Economies
October 2017, Box 1.1
Recent Wage Dynamics in Advanced Economies: Drivers and Implications
October 2017, Chapter 2
Labor Market Dynamics by Skill Level
October 2017, Box 2.1
Worker Contracts and Nominal Wage Rigidities in Europe: Firm-Level Evidence
October 2017, Box 2.2
Wage and Employment Adjustment after the Global Financial Crisis: Firm-Level Evidence
October 2017, Box 2.3
IX. External Payments, Trade, Capital Movements, and Foreign Debt
Te Evolution of Current Account Deficits in the Euro Area
April 2013, Box 1.3
External Rebalancing in the Euro Area
October 2013, Box 1.3
Te Yin and Yang of Capital Flow Management: Balancing Capital Inflows with Capital Outflows
October 2013, Chapter 4
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SELECTED TOPICS
Simulating Vulnerability to International Capital Market Conditions
October 2013, Box 4.1
Te Trade Implications of the U.S. Shale Gas Boom
October 2014, Box 1.SF.1
Are Global Imbalances at a Turning Point?
October 2014, Chapter 4
Switching Gears: Te 1986 External Adjustment
October 2014, Box 4.1
A Tale of Two Adjustments: East Asia and the Euro Area
October 2014, Box 4.2
Understanding the Role of Cyclical and Structural Factors in the Global Trade Slowdown
April 2015, Box 1.2
Small Economies, Large Current Account Deficits
October 2015, Box 1.2
Capital Flows and Financial Deepening in Developing Economies
October 2015, Box 1.3
Dissecting the Global Trade Slowdown
April 2016, Box 1.1
Understanding the Slowdown in Capital Flows to Emerging Markets
April 2016, Chapter 2
Capital Flows to Low-Income Developing Countries
April 2016, Box 2.1
Te Potential Productivity Gains from Further Trade and Foreign Direct Investment Liberalization
April 2016, Box 3.3
Global Trade: What’s behind the Slowdown?
October 2016, Chapter 2
Te Evolution of Emerging Market and Developing Economies’ Trade Integration with
China’s Final Demand
April 2017, Box 2.3
Shifts in the Global Allocation of Capital: Implications for Emerging Market and
Developing Economies
April 2017, Box 2.4
Macroeconomic Adjustment in Emerging Market Commodity Exporters
October 2017, Box 1.4
Remittances and Consumption Smoothing
October 2017, Box 1.5
A Multidimensional Approach to Trade Policy Indicators
April 2018, Box 1.6
Te Rise of Services Trade
April 2018, Box 3.2
Role of Foreign Aid in Improving Productivity in Low-Income Developing Countries
April 2018, Box 4.3
Global Trade Tensions
October 2018, Scenario Box
Te Price of Capital Goods: A Driver of Investment under Treat?
April 2019, Chapter 3
Evidence from Big Data: Capital Goods Prices across Countries
April 2019, Box 3.2
Capital Goods Tariffs and Investment: Firm-Level Evidence from Colombia
April 2019, Box 3.4
Te Drivers of Bilateral Trade and the Spillovers from Tariffs
April 2019, Chapter 4
Gross versus Value-Added Trade
April 2019, Box 4.1
Bilateral and Aggregate Trade Balances
April 2019, Box 4.2
Understanding Trade Deficit Adjustments: Does Bilateral Trade Play a Special Role?
April 2019, Box 4.3
Te Global Macro and Micro Effects of a U.S.-China Trade Dispute: Insights from Tree Models
April 2019, Box 4.4
A No-Deal Brexit
April 2019, Scenario Box
Implications of Advanced Economies Reshoring Some Production
October 2019,
Scenario Box 1.1
Trade Tensions: Updated Scenario
October 2019,
Scenario Box 1.2
Te Decline in World Foreign Direct Investment in 2018
October 2019, Box 1.2
Global Trade and Value Chains during the Pandemic
April 2022, Chapter 4
Effects of Global Supply Disruptions during the Pandemic
April 2022, Box 4.1
Te Impact of Lockdowns on Trade: Evidence from Shipping Data
April 2022, Box 4.2
Firm-Level Trade Adjustment to the COVID-19 Pandemic in France
April 2022, Box 4.3
Geoeconomic Fragmentation and the Natural Interest Rate
April 2023, Box 2.2
Geoeconomic Fragmentation and Foreign Direct Investment
April 2023, Chapter 4
Rising Trade Tensions
April 2023, Box 4.1
Balance Sheet Exposure to Fragmentation Risk
April 2023, Box 4.2
Geopolitical Tensions, Supply Chains, and Trade
April 2023, Box 4.3
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X. Regional Issues
Te Evolution of Current Account Deficits in the Euro Area
April 2013, Box 1.3
Still Attached? Labor Force Participation Trends in European Regions
April 2018, Box 2.3
XI. Country-Specific Analyses
Abenomics: Risks after Early Success?
October 2013, Box 1.4
Is China’s Spending Pattern Shifting (away from Commodities)?
April 2014, Box 1.2
Public Investment in Japan during the Lost Decade
October 2014, Box 3.1
Japanese Exports: What’s the Holdup?
October 2015, Box 3.3
Te Japanese Experience with Deflation
October 2016, Box 3.2
Permanently Displaced? Labor Force Participation in U.S. States and Metropolitan Areas
April 2018, Box 2.2
Immigration and Wages in Germany
April 2020, Box 4.2
Te Impact of Migration from Venezuela on Latin America and the Caribbean
April 2020, Box 4.3
Pass-Trough from Wages to Prices: Estimates from the United States
October 2022, Box 2.1
Political Economy of Carbon Pricing: Experiences from South Africa, Sweden, and Uruguay
October 2022, Box 3.2
XII. Climate Change Issues
Te Effects of Weather Shocks on Economic Activity: How Can Low-Income Countries Cope?
October 2017, Chapter 3
Te Growth Impact of Tropical Cyclones
October 2017, Box 3.1
Te Role of Policies in Coping with Weather Shocks: A Model-Based Analysis
October 2017, Box 3.2
Strategies for Coping with Weather Shocks and Climate Change: Selected Case Studies
October 2017, Box 3.3
Coping with Weather Shocks: Te Role of Financial Markets
October 2017, Box 3.4
Historical Climate, Economic Development, and the World Income Distribution
October 2017, Box 3.5
Mitigating Climate Change
October 2017, Box 3.6
Te Price of Manufactured Low-Carbon Energy Technologies
April 2019, Box 3.1
What’s Happening with Global Carbon Emissions?
October 2019, Box 1.SF.1
Mitigating Climate Change—Growth and Distribution-Friendly Strategies
October 2020, Chapter 3
Glossary
October 2020, Box 3.1
Zooming in on the Electricity Sector: Te First Step toward Decarbonization
October 2020, Box 3.2
Who Suffers Most from Climate Change? Te Case of Natural Disasters
April 2021, Box 1.2
Jobs and the Green Economy
October 2021, Box 1.2
Clean Tech and the Role of Basic Scientific Research
October 2021, Box 3.2
Commodity Market Developments and Forecasts
October 2021, Chapter 1
Special Feature
A Greener Labor Market: Employment, Policies, and Economic Transformation
April 2022, Chapter 3
Te Geography of Green- and Pollution-Intensive Jobs: Evidence from the United States
April 2022, Box 3.1
A Greener Post-COVID Job Market?
April 2022, Box 3.2
Near-Term Macroeconomic Impact of Decarbonization Policies
October 2022, Chapter 3
Near-Term Implications of Carbon Pricing: A Review of the Literature
October 2022, Box 3.1
Political Economy of Carbon Pricing: Experiences from South Africa, Sweden, and Uruguay
October 2022, Box 3.2
Decarbonizing the Power Sector While Managing Renewables’ Intermittence
October 2022, Box 3.3
Te Natural Rate of Interest and the Green Transition
April 2023, Box 2.1
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SELECTED TOPICS
XIII. Special Topics
Getting By with a Little Help from a Boom: Do Commodity Windfalls Speed Up
Human Development?
October 2015, Box 2.3
Breaking the Deadlock: Identifying the Political Economy Drivers of Structural Reforms
April 2016, Box 3.1
Can Reform Waves Turn the Tide? Some Case Studies Using the Synthetic Control Method
April 2016, Box 3.4
A Global Rush for Land
October 2016, Box 1.SF.1
Conflict, Growth, and Migration
April 2017, Box 1.1
Tackling Measurement Challenges of Irish Economic Activity
April 2017, Box 1.2
Within-Country Trends in Income per Capita: Te Cases of Brazil, Russia, India,
China, and South Africa
April 2017, Box 2.1
Technological Progress and Labor Shares: A Historical Overview
April 2017, Box 3.1
Te Elasticity of Substitution between Capital and Labor: Concept and Estimation
April 2017, Box 3.2
Routine Tasks, Automation, and Economic Dislocation around the World
April 2017, Box 3.3
Adjustments to the Labor Share of Income
April 2017, Box 3.4
Smartphones and Global Trade
April 2018, Box 1.1
Has Mismeasurement of the Digital Economy Affected Productivity Statistics?
April 2018, Box 1.4
Te Changing Service Content of Manufactures
April 2018, Box 3.1
Patent Data and Concepts
April 2018, Box 4.1
International Technology Sourcing and Knowledge Spillovers
April 2018, Box 4.2
Relationship between Competition, Concentration, and Innovation
April 2018, Box 4.4
Increasing Market Power
October 2018, Box 1.1
Sharp GDP Declines: Some Stylized Facts
October 2018, Box 1.5
Predicting Recessions and Slowdowns: A Daunting Task
October 2018, Box 1.6
Te Rise of Corporate Market Power and Its Macroeconomic Effects
April 2019, Chapter 2
Te Comovement between Industry Concentration and Corporate Saving
April 2019, Box 2.1
Effects of Mergers and Acquisitions on Market Power
April 2019, Box 2.2
Te Global Automobile Industry: Recent Developments, and Implications for the Global Outlook
October 2019, Box 1.1
Measuring Subnational Regional Economic Activity and Welfare
October 2019, Box 2.1
Te Persistent Effects of Local Shocks: Te Case of Automotive Manufacturing Plant Closures
October 2019, Box 2.3
Te Political Effects of Structural Reforms
October 2019, Box 3.1
Te Impact of Crises on Structural Reforms
October 2019, Box 3.2
Te Persistence and Drivers of the Common Component of Interest Rate-Growth Differentials in
Advanced Economies
April 2020, Box 2.2
Social Unrest during COVID-19
October 2020, Box 1.4
Te Role of Information Technology Adoption during the Pandemic: Evidence from the
United States
October 2020, Box 2.2
Education Losses during the Pandemic and the Role of Infrastructure
April 2021, Box 2.2
Food Insecurity and the Business Cycle
April 2021, Chapter 1,
Annex 1.SF.1
Food Insecurity and Prices during COVID-19
October 2021, Box 2.1
mRNA Vaccines and the Role of Basic Scientific Research
October 2021, Box 3.1
Intellectual Property, Competition, and Innovation
October 2021, Box 3.3
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IMF EXECUTIVE BOARD DISCUSSION OF THE OUTLOOK,
SEPTEMBER 2023
Te following remarks were made by the Chair at the conclusion of the Executive Board’s discussion of the
Fiscal Monitor, Global Financial Stability Report, and World Economic Outlook on September 26, 2023.
xecutive Directors broadly agreed with staff’s
volatility due to climate and geopolitical shocks. Most
assessment of the global economic outlook,
Directors noted the risk of a further deterioration in
risks, and policy priorities. Tey welcomed
China’s property sector and, in this regard, welcomed
E
the continued global economic resilience,
the recent policy actions taken by the authorities.
particularly of some advanced and emerging market
Directors also highlighted the risk of further debt
economies, but acknowledged that divergent growth
distress in those EMDEs heavily reliant on external
prospects across the world’s regions pose a challenge
borrowing and generally indicated that the presence
to returning to pre-pandemic output trends. In
of a weak tail of banks in some major economies also
the case of many emerging market and developing
poses vulnerabilities. Directors emphasized that should
economies (EMDEs), the loss of momentum has
financial conditions tighten abruptly, adverse feedback
reduced prospects for income convergence. Directors
loops could be triggered and again test the resilience of
recognized that tight monetary policies, necessary to
the global financial system.
fight inflation, and the withdrawal of fiscal policy
Directors noted that global core inflation remains
support to tackle soaring global debt and support
persistent and declining only slowly, and stressed
disinflation efforts are also headwinds to growth in
that monetary policy should maintain a restrictive
the short run. Most Directors agreed that increasing
policy stance, tailored to country circumstances, until
geoeconomic fragmentation is also weighing on the
inflation declines sustainably to target. Tey called
recovery and welcomed the Fund’s analysis on the
for clear and transparent communication to avoid
costs of fragmentation. A few Directors emphasized
a de-anchoring of inflation expectations. Directors
that diversification in supply chains is important
also indicated that policies aimed at encouraging
to build resilience. More generally, a number of
labor market participation can help ease labor market
Directors stressed that the Fund’s communication
tightness in many advanced economies, which would
on geoeconomic fragmentation should be balanced.
support disinflation.
Directors generally agreed that ending Russia’s war
Directors acknowledged that the fast pace of
against Ukraine remains the single most impactful
monetary policy tightening adds further pressure
action to improve the global outlook.
on the financial sector, requiring careful monitoring
Directors broadly agreed that risks to the outlook
of risks, better risk assessment and strengthened
are more balanced relative to April 2023, but remain
supervision, and closing supervision gaps in the
tilted to the downside. While the acute stress in the
nonbank financial sector. Tey called for an assessment
banking system seen in March this year has subsided,
of how consistently international standards in banking
in part due to swift action in Switzerland and the
regulation were implemented during recent financial
United States, they broadly noted that financial
stresses. Noting vulnerabilities in the commercial real
stability risks remain elevated. In particular, Directors
estate sector of some countries, Directors called for
emphasized that persistence in global underlying
continued vigilance and close monitoring.
inflation could warrant higher-for-longer policy
Directors stressed the need to gradually tighten fiscal
rates, which could in turn trigger a correction in
policies as deficits and debt remain elevated. Tey
financial markets and capital flow volatility. Tey also
considered that, although the primary responsibility
considered that commodity prices could see more
for restoring price stability lies with central banks,
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WORLD ECONOMIC OUTLOOK: Navigating Global Divergences
tightening the fiscal stance can further ease inflation
maintain debt sustainability. Some Directors reiterated,
by reducing aggregate demand and reinforcing the
however, that carbon pricing is not an adequate
overall credibility of disinflation strategies. Directors
solution in all countries. Directors acknowledged that
recommended mobilizing revenues through tax
the green transition will be challenging, particularly
capacity building and achieving efficiency gains in
for EMDEs with high debt and sizable investment
spending to help restore some fiscal space, while
needs; at the same time, delaying the transition will
safeguarding targeted measures to protect the most
only increase its costs. Tey generally agreed that
vulnerable. Tey also noted that some countries in
incorporating climate change considerations into debt
debt distress may require preemptive and orderly
sustainability analyses could improve policy planning,
debt restructuring, underscoring the importance of
while taking into consideration country-specific
multilateral cooperation in this regard.
characteristics.
Directors expressed concern over the dimming
Directors underscored that internationally
growth prospects for the medium term. In this
coordinated efforts are indispensable to minimize the
context, they emphasized the importance of facilitating
cost of decarbonization, especially for low-income
investment and of targeted and carefully sequenced
countries and small developing states. In this context,
supply-side reforms, which can enhance productivity
they highlighted the important catalytic role that
growth despite constrained policy space and help
the Resilience and Sustainability Trust could play in
dampen inflationary pressures.
attracting green financing and investments. Directors
Directors called for accelerating decarbonization
stressed that green industrial policies should avoid
efforts, while noting that the policy mix will need
distortions to trade and investment flows, in line with
to strike a balance between climate goals, fiscal
the rules of the World Trade Organization (WTO). In
sustainability, and political feasibility. Tey agreed that
this context, a few Directors emphasized that measures
relying mostly on spending-based measures will be
such as carbon border adjustment mechanisms should
costly and instead favored a combination of revenue,
also be WTO-compliant to safeguard international
expenditure, and other financing and structural
trade. While they considered that, in principle, green
policies to deliver on climate goals. In this context,
and food corridor agreements could help safeguard
most Directors agreed that a policy package containing
the energy transition and avert food insecurity, a few
carbon pricing, complemented with measures to
Directors underscored the difficulty of implementing
address market failures, catalyze private finance and
these mechanisms. More generally, Directors
green investment, and mitigate distributional concerns
emphasized that safeguarding the rules-based trading
has higher chances to deliver on climate goals and
system would be important for global prosperity.
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