Washington: International Monetary Fund member countries on Friday expressed concern about tensions over rising trade tensions, advances in artificial intelligence and changes in global markets.
The IMF Steering Committee statement nevertheless expressed hope for resilient economic growth and sustained deflation.
The International Monetary and Financial Committee statement highlighted downside risks from low growth, high debt, extreme weather, global imbalances and wars.
“Major policy changes in trade and other areas are reshaping global markets and policy frameworks, increasing uncertainty,” IMFC President Mohammed Al-Jadaan said in the statement.
“These changes, as well as transformative forces such as digitalization and demographic shifts, bring challenges but also opportunities.”
The statement said that the progress of deflation will vary significantly in different countries.
IMF officials observed this week that countries that impose tariffs like the United States could face higher inflation over a longer period of time.
Meanwhile, some Asian economies, including China, are at risk of potential deflation, according to the IMF’s assessment.
The committee’s statement stressed the need for independent central banks to maintain policy credibility.
“Central banks are 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 confirmed.
It also called for addressing financial vulnerabilities by strengthening oversight of systemic risks from AI, non-bank financial institutions and digital assets.
The statement highlighted the importance of benefiting from financial and technological innovation while managing the associated risks. – Reuters
