IMF update

 

Dear MARIA, In today's edition, we highlight: The managing director in Saudi Arabia Gita Gopinath on trade openness Joshua Gans on artificial intelligence Resilient remittances The IMF's digital history WORLD TRADE Global Trade Must Be Open and Predictable (Credit: IMF Photo) The world must promote openness and predictability amid a series of challenges to the global trading system, from geopolitical tensions to industrial policies and climate change, Gita Gopinath said in a speech on Wednesday. Speaking at a trade conference in Washington, the IMF’s first deputy managing director said solutions could include addressing long-standing issues like subsidies and tariffs through strengthened trade rules as well as securing open markets in modern areas of the global economy. World trade growth is projected to decline from 5.1 percent in 2022 to 0.9 percent this year. Governments imposed almost 3,000 trade restrictions last year—nearly 3 times the number in 2019. Foreign direct investment is increasingly driven by geopolitical preference rather than business fundamentals. Read more: F&D’s magazine June issue on the growing threats to global trade. MANAGING DIRECTOR INTERVIEW Conflict adds to economic challenges The conflict in Israel-Gaza is another cloud on the horizon of an already gloomy global economic outlook, Kristalina Georgieva told CNN’s Richard Quest on Wednesday in a wide-ranging interview at the Future Investment Initiative in Saudi Arabia. The IMF managing director also appeared on a panel to discuss the outlook for the region and the world. FINANCE AND DEVELOPMENT Embracing Artificial Intelligence (Credit: Sonia Pulido) Assessing the power and pitfalls of AI requires putting it in the hands of people, says economist Joshua Gans in a conversation with F&D magazine's Marjorie Henriquez. Gans, who is coauthor of Power and Prediction: The Disruptive Economics of Artificial Intelligence, assesses AI’s impact on the economy, debunks overhyped concerns about the new technology, and explains the challenge of identifying an ethics enforcer. He also discusses why AI should be made accessible through competitive means and traded widely. Read more: The IMF’s Gita Gopinath discussed the economics of AI, its impact on women and developing economies, and much more in an interview with Washington Post columnist Heather Long. Millions of families, even some countries, rely on workers living abroad to keep their economies afloat. Global remittances reached a record $647 billion in 2022—three times that of official development assistance. In this podcast, World Bank economist Dilip Ratha talks about his own experiences growing up in rural India and how they led him to become a leading voice on the power of remittances to reduce global poverty. Read Resilient Remittances in the IMF’s F&D magazine. Weekly Roundup MONETARY POLICY Transmission Effects The hit to economy activity from tighter monetary policy happens swiftly, but the effects on inflation and inflation expectations take time to fully materialize, a new IMF staff paper finds. Across countries, monetary policy is more effective in countries with flexible exchange rates, more developed financial systems, and credible monetary policy frameworks. Monetary policy transmission is stronger when uncertainty is low, financial conditions are tight and monetary policy is coordinated with fiscal policy. INFLATION Supply and Demand How do demand and supply contribute to inflation? Looking at 32 countries between 2008 and 2021, an IMF staff paper finds that supply-driven inflation is more reactive to oil shocks and supply-chain pressures. Demand-driven inflation, meanwhile, displays a more pronounced response to monetary policy shocks. These results also suggest a steeper Phillips curve when inflation is demand-driven, holding significant implications for effective policy design. FACTSHEET Resilience and Sustainability Facility The Resilience and Sustainability Facility (RSF) provides affordable long-term financing to countries undertaking reforms to reduce risks to prospective balance of payments stability, including those related to climate change and pandemic preparedness. Read our factsheet to find out more. IMF HISTORY Digital Collection The IMF eLibrary hosts a digital collection of publications and documents that provide insight into the Fund’s history. These include the full collection of the IMF’s official histories, which were each authored and curated by official historians at the time as well as other works that chronicle the Fund’s 70-year history. Thank you again very much for your interest in the Weekend Read! Be sure to let us know what issues and trends we should have on our radar. Nick Owen Editor IMF Weekend Read nowen@IMF.org

(Photo: IMF Photo) With the years of access to cheap money behind them and the effects of climate change and geopolitical tensions only getting worse, what does resilience look like for emerging market economies? This year’s Per Jacobbson lecture brings together three influential thinkers to discuss how countries can work towards economic resilience in an era of greater uncertainty. The talk features Lesetja Kganyago, Governor of the Reserve Bank of South Africa, Masood Ahmed, President of the Center for Global Development, and is moderated by Guillermo Ortiz, former Governor of the Bank of Mexico. Watch the webcast   Listen to the podcast on: IMF.org | Apple Podcasts | Spotify |  Libsyn | Google Podcasts     Thanks for listening to the podcast. We're always looking to improve your experience so let us know if you have any suggestions! Send your comments to me at bedwards2@imf.org.   Bruce Edwards Producer, IMF Podcasts