International Monetary Fund :Daily Briefing: Spring Meetings | April 23

 

Dear MARIA, welcome to the April 23 briefing from the Spring Meetings In Wednesday's edition of the daily briefing, we spotlight the Fund's Fiscal Monitor report, explore the pathways to prosperity for our membership, hear from the Governors of Argentina, Kazakhstan, and Malaysia, and much more as the IMF-World Bank Spring Meetings continue. FULL SCHEDULE (Credit: Sarah Silbiger/IMF Photo) Fiscal Monitor: It's Urgent for Countries to Keep Their House in Order “Global public debt is very high and rising,” said Vítor Gaspar, director of the IMF’s Fiscal Affairs Department. “In 2025, it will rise above 95 percent of GDP. It is higher and growing faster than pre-pandemic,” he added at the launch of the April 2025 Fiscal Monitor.   According to staff calculations, 119 countries in the world have public debt higher than before the pandemic onslaught. To address this challenge, “resilience is needed everywhere: countries should redouble efforts to keep their own fiscal house in order,” Gaspar added.   The Fiscal Monitor suggests three policy priorities: fiscal policy should be part of overall stability-oriented macroeconomic policies; in most countries, it should aim at reducing public debt and rebuilding buffers to create space to respond to spending pressures and other economic shocks; and third, fiscal, together with other structural policies, should aim at improving potential growth, thereby easing difficult choices between reducing debt, social spending or investments to increase growth.  “There is a sense of urgency in policy action,” Gaspar also said. “There is still time to adopt policies that improve resilience, and there is still time to think through what are the most relevant vulnerability scenarios that apply to individual countries, to regions, or even to broad systems. And it's very important to do that systematically so that one is ready if and when a crisis comes,” he added.  Read the related blog: Rising Global Debt Requires Countries to Put their Fiscal House in Order  LEARN MORE Watch the Fiscal Monitor Press Briefing (Credit: IMF Photo/Tom Brenner) IMF Helps Countries Build More Resilient Economies  Economic challenges can spur countries to pursue ambitious reforms, a panel of policymakers discussed at a seminar, Pathways to Prosperity: Policies and Partnerships for Success, which was moderated by IMF Deputy Managing Director, Nigel Clarke.  Improving governance and redirecting resources toward investment and diversification were among Benin’s secrets to success under its IMF program, according to the country’s finance minister, Romuald Wadagni.   Speaking of his country’s IMF program, Paraguay’s finance minister, Carlos Fernández Valdovinos, emphasized the importance of complementary macroeconomic policies—such as fiscal-monetary coordination—and strong partnerships with the private sector.   Four of the six EU countries with fiscal surpluses in 2024 had IMF programs in recent years, noted Greece’s finance minister, Kyriakos Pierrakakis. He highlighted his country’s success in garnering public support for the program by “showing not telling”—through ingraining communications into policy-building.   The Center for Global Development’s Masood Ahmed called on the Fund and Bank to identify shared objectives and define responsibilities clearly.  LEARN MORE (Credit: IMF Photo/Alyssa Schukar) Bausili Wants to Make Argentina Normal Again In one of the most sought-after events of the day, Argentina central bank governor Santiago Bausili spoke about the policy transformations his country is undertaking to “ultimately become a normal economy.” He detailed how the central bank is changing the foreign exchange regime to eventually eliminate the existence of “multiple prices for the same asset.” The central bank recently announced that Argentina would be moving from a fixed crawling peg regime to a free-floating regime within bands. In fact, the transition takes advantage of the existence of very effective capital controls to manage imbalances in both foreign exchange flows and the stock of imbalances linked to imports already contracted but not yet paid form. Argentina is a dual-currency economy, the governor explained, in which the peso is used for short-term transactions, and US dollars are used as a long-term store of value. “Society is doing that, whether we like it or not.”  The new regime is designed in a way that naturally becomes a fully free-floating regime. “The bands have a crawling rate to them,” the governor explained. Both the floor and the ceiling move up and down, respectively, at a pace of one percent a month. “The idea of that is to avoid the question of when will you free float? It’s going to come, in time, there’s no further phase in the in terms of the free flow. There’s no further stage that becomes a source of anxiety and of bets of when is the next regime change.”  LEARN MORE (Credit: IMF Photo/Alyssa Schukar) Kazakhstan Navigates Uncertainty, Economic Shocks “Everyone has yet to find their place on this new global map,” said Timur Suleimenov, Governor of the National Bank of Kazakhstan, in a conversation with Jihad Azour, Director of the Middle East and Central Asia Department. The discussion focused on Kazakhstan’s efforts to navigate recent uncertainty and economic shocks, including geopolitical disruptions, inflation, and trade challenges. Since his appointment in 2023, the Governor has overseen inflation reduction from double digits to 8.4%.   Suleimenov emphasized that being an oil-dependent, landlocked country created complex vulnerabilities, particularly as 50% of exports and over 30% of fiscal revenues come from oil. The Governor also addressed how the current global fragmentation in trade is pushing Central Asian nations toward stronger regional cooperation. Kazakhstan is working with neighbors to streamline trade, energy, and logistics systems.   On reforms, he acknowledged challenges in reducing reliance on oil revenues and emphasized the importance of coordinated efforts to manage long-term fiscal sustainability. “Sometimes crises call for very difficult reforms. But all these stakeholders should be on the same page...it is for the governments and central banks to sit down together and see what the priorities are, the common national interests,” he said.   LEARN MORE (Credit: IMF Photo/Alyssa Schukar) Malaysia Enjoys Economic Strength Amid Global Uncertainty, BNM Governor Says Malaysia isn’t isolated from global developments. However, even in a world beset by considerable policy uncertainty, its small and open economy is well positioned, according to Bank Negara Malaysia Governor Abdul Rasheed Ghaffour. The economy is in “a position of strength, because we started out with very strong growth last year,” Ghaffour said Wednesday in a Governor Talk with Asia-Pacific Department Director Krishna Srinivasan. Ghaffour, who has led the central bank since 2023, cited strong private consumption, record investment, low unemployment, and historically high labor-force participation. The economy grew by 5.1 percent last year. The regional economy also has room to do better with greater integration of trade and finance among Association of Southeast Asian Nations, Ghaffour added, highlighting the potential of one the world’s largest trade blocs and its relatively youthful population. A recent meeting of ASEAN finance ministers and central bank governors, convened in early April, featured a “strong discussion moving towards what can we do within ASEAN,” Ghaffour said. “There’s a lot we can do together in terms of enhancing our intraregional trade.” LEARN MORE (Credit: IMF Photo/Sarah Silbiger) Navigating Inflation and Financial Stability Challenges  Price stability and financial stability. Are they complementary, or can they be at odds? How to decide between these two key central bank mandates in times of high inflation? Or worse, in times of financial turbulence? How does all of that affect central bank independence? These topics were discussed on Wednesday by a panel of academics and policymakers. IMF Chief Economist Pierre-Olivier Gourinchas presented IMF staff research showing how price stability and financial stability interact conceptually. “Typically, central banks like to achieve separation. They want to be able to tighten their policy rate and somehow deal with the financial stress with other instruments, so that it doesn’t threaten their mandate to maintain price stability. Whether they can do certain practices is not a given and will depend on the cost of using additional tools.”  While arguing that in principle price and financial stability should never be in conflict, Sarah Breeden, deputy governor for financial stability at the Bank of England, described to the audience exactly a situation in which they were at odds. Specifically, the financial stress caused by the so-called mini-budget crisis in the UK in 2022. “We were effectively able to navigate the perceived trade off through the careful design of our intervention.” She highlighted three key features: 1) the intervention was targeted; 2) the intervention was temporary, strictly limited to 13 days; and 3) “It was conducted with clear purpose and accountability to intervene in markets explicitly for financial stability purposes.”  Chang Yong Rhee, governor of the Bank of Korea, and former director of the IMF’s Asia and Pacific Department, recalled how in 2022 the Bank of Korea had to deal with its own set of conflicts. It was in the middle of a policy tightening cycle; but had to make liquidity injections to support financial institutions affected by a crisis in the real estate sector, aggravated by exposure to the US dollar. The central bank had to continue tightening monetary policy while providing liquidity, and intervening in the foreign exchange market. “Believe me, this separation principle doesn’t [always] work,” he quipped to the IMF chief economist.   Gourinchas concluded that “financial stability and price stability are complements and help each other. You want to do everything to avoid a situation where those two things are not necessarily aligned.” He highlighted that central bank independence is a critical feature: “If you start to deviate from your price stability mandate… the concern is that somehow the market will read this as a sort of financial put… But you’re promising that you’re going back to your central bank targets, and that’s where central bank independence is absolutely critical.”  Check back here for the recording. (Credit: IMF Photo) AI in the Service of Central Bank Communications  In the Capacity Development Talk Leveraging AI Tools for Strategic Central Bank Communications held today, IMF experts showcased their artificial intelligence (AI) tool that has been built to support central banks in upgrading their communications. Presenting firsthand experience, Aubin Belalahy, Second Vice Governor at the Central Bank of Madagascar, confirmed that the new IMF tool has helped them refine monetary policy and financial stability messaging, identify communications gaps, and strengthening public engagement. Results from the tool highlighted that central banks from developing countries tend to make their monetary policy communications more complex and less readable. “The tool helped us see gaps in our communications,” Belalahy said. “We are now addressing them, applying a more forward-looking approach.”   Kei Moriya from the IMF’s Information Technology Department explained that the AI tool is built on an unprecedented global dataset of over 70,000 documents and 20 million sentences from more than 160 countries, in multiple languages.    Thiago Silva from the IMF’s Monetary and Capital Markets Department showcased how the tool has been used to upgrade monetary policy communications for anchoring expectations, building credibility, and enhancing transparency.  Check back here for the recording. NUMBER OF THE DAY 119 countries have public debt higher than before the pandemic.   119   Countries (Credit: IMF Photo/Sarah Silbiger) Partnership in Action: Active Collaborations Yield Successful Fiscal Reforms in Sri Lanka Sri Lanka was the focus of a Capacity Development Talk on Tuesday. Three years ago, in April 2022, the country was facing one of its worst economic crises in decades after defaulting on its external debt payment obligations. Debt levels became unsustainable and inflation was soaring. By the following spring, the IMF Board had approved a program to help restore macroeconomic stability and debt sustainability. Today, halfway through the program, the country is on the path to economic recovery, with inflation stabilized and 5 percent GDP growth last year.  Mahinda Siriwardana, Secretary to the Treasury and Ministry of Finance, Planning and Economic Development in Sri Lanka discussed his country’s recent experiences with the IMF’s Peter Breuer, former mission chief for Sri Lanka, and Ozlem Aydin and Cindy Negus of the IMF’s Fiscal Affairs department, and thanked the Fund for its continued partnership during the crisis.  Siriwardana advised other countries in similar situations to “act early and act comprehensively” and said that in his view, “asking for support early is a strength, not a weakness.” Siriwardana emphasized that one of the key strengths of the IMF's approach was the seamless integration of technical assistance with the broader program support under the Extended Fund Facility arrangement.  LEARN MORE (Credit: IMF Photo/Allison Robbert) UPCOMING EVENTS THURSDAY, APRIL 24 8:00 AM - 8:45 AM ET IMF Managing Director Press Briefing on the Global Policy Agenda 9:15 AM - 10:00 AM ET IMF Press Briefing: Asia Pacific Department 10:30 AM - 11:15 PM ET IMF Press Briefing: Middle East and Central Asia Department Governor Talks 11:00 - 11:30 AM | Ethiopia 2:30 - 3:00 PM | Poland 12:10 PM - 12:40 PM ET G20 Press Briefing 1:00 PM - 2:00 PM ET Empowering Data-Driven Policies Through Renewed Partnerships – Launching Data for Decisions Fund Phase II  3:00 PM - 4:00 PM ET New Economy Forum: AI in Labor Markets  3:15 PM - 4:15 PM ET Seminar: Debate on the Global Economy 4:15 PM - 6:15 PM ET New Economy Forum Workshop: AI and GovTech in Public Finance  FRIDAY, APRIL 25 8:30 AM - 9:15 AM ET IMF Regional Economic Outlook Press Briefing: Africa 10:00 AM - 10:45 AM ET IMF Regional Economic Outlook Press Briefing: Europe 12:00 PM - 12:30 PM ET IMFC Press Briefing 12:30 PM - 1:15 PM ET Seminar: The Evolving Art of Monetary Policy in Emerging Markets 1:30 PM - 2:15 PM ET IMF Regional Economic Outlook Press Briefing: Western Hemisphere 2:30 PM - 3:30 PM ET Navigating an Uncertain World TODAY'S MEDIA PARTNERS The Washington Post is an award-winning media publisher dedicated to holding power to account through impactful and consequential journalism. The Post connects Washington to the world and the world to Washington with vital news, ideas and insights in the form of rigorous, trustworthy reporting.  CNN en Español provides continuous Spanish-language news coverage of major world events, live breaking coverage supported by in-depth analysis, worldwide business and financial news, global weather updates, sports and feature programming on such topics as health, technology and entertainment.    VIRTUAL NEWSSTAND Read a selection of Spring Meetings related news from the world's leading media outlets. What do you think of the Spring Meetings and our newsletter coverage so far? Share your thoughts and feedback directly by clicking here. Your comments will help inform our agenda and coverage moving forward. Sincerely, IMF 2025 Spring Meetings Team

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