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.
"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."
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.
He said governments should enhance resilience from supply shocks and global political tensions and work to manage uncertainty.
Mumssen also said it was critical to address fast-moving technical innovations, including to ensure the rapid AI transformation translates to inclusive growth.
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.
Reuters
