Policy Papers

The global economy is facing complex challenges. The strength and quality of the recovery vary widely across regions, resulting in very different concerns. In most advanced economies, problems include slow and job-poor growth, amidst fiscal and financial vulnerabilities; in most emerging markets, countries must deal with rapid credit growth, large capital inflows, and inflationary pressures; and rising food and fuel prices affect all members, but low-income countries most harshly. Meanwhile, crisis hot spots persist in some regions, and global imbalances show little sign of receding. This landscape makes global policy cooperation as critical as it was at the peak of the crisis. Participants at the recent IMFC and G-20 meetings shared this view, and I am heartened that they reiterated their commitment to policy cooperation.

The Fund’s mandate of promoting cooperation on global economic and financial problems could not be more relevant in this context. But the task is so vast that we must focus our efforts on the key issues facing the membership. In the near and medium terms, I see three priority areas: (i) pursuing growth consistent with macro-financial stability; (ii) reforming the international monetary system; and (iii) respond to the challenges confronting our low-income members in the face of a difficult global environment. One theme cutting across these areas is the need to enhance our surveillance of the global economy to be ahead of the curve.