Dear MARIA, welcome to the April 25 briefing from the Spring MeetingsIn Friday's edition of the daily briefing, we highlight the International Monetary and Financial Committee, the evolving art of monetary policy in emerging markets, press briefings from the IMF's African, European, and Western Hemisphere departments, the New Economy Forum, and more. |
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(Credit: IMF Photo/Erin Scott) The IMF must continue to focus on its core mandate, including supporting international monetary cooperation, encouraging the expansion of trade and economic growth, and discouraging policies that would harm prosperity, Mohammed Aljadaan, chair of the International Monetary and Financial Committee, said on Friday. Trade tensions and related uncertainty pose real risks to global growth and financial stability, but it’s also a moment for countries to hold constructive conversations about how to move forward, Aljadaan, who is also Saudi Arabia’s finance minister, told a briefing at the end of the committee’s 51st meeting. “History tells us that the bigger the challenge, the more it requires us to come together, to convene, and to have an honest conversation,” Aljadaan said. “That’s exactly what happened this week, and that’s the power of the IMF, to be able to convene everybody around the same table in closed rooms and discuss issues in a constructive way.” IMF Managing Director Kristalina Georgieva said finance ministers and central bank governors showed a constructive spirit to take on the challenges facing the global economy. “What I heard this week was an incredible determination by our members to steer their economies through this period of change and uncertainty,” she said. “It gave me confidence that we can have a more resilient and more balanced world economy.” |
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(Credit: IMF Photo/Tom Brenner) Current and former governors of central banks in emerging markets convened for a discussion Friday on why independence helps deliver economic and financial stability, how communicating clearly helps achieve mandates, and why pursuing foreign exchange intervention should be strategic and purposeful. Governors Lesetja Kganyago of South Africa and Eli Remolona of the Philippines joined University of Chicago professor Raghuram Rajan, former head of the Reserve Bank of India, and IMF First Deputy Managing Director Gita Gopinath to discuss the evolving landscape of monetary policy in emerging markets—against a backdrop of uncertainty and volatility. “It helps absolutely if you have a very clear monetary policy framework,” Gopinath said during the discussion, which was moderated by Lisa Abramowicz of Bloomberg News. “If you rely on your policy rate as the main tool for doing monetary policy, I think that remains the case,” but using additional tools multiple times “can be terribly confusing." Remolona said his institution is fortunate to have enjoyed three decades of autonomy. “Independence is crucial for the central bank to do its job properly,” he said. “That means we can control inflation and then we don't have to worry about hyperinflation, which is what tends to happen when the central bank loses independence.” “Independence comes from the constituencies who believe you perform a vital function,” Rajan said. Sending this message, he said, means going to the public, beyond analysts, but very carefully: too much communication can confuse, too little may forgo support. Kganyago said central banks also need to clearly explain when they buy or sell their currency in the foreign exchange market because some people, and politicians, think of the exchange rate as being akin to a country’s share price. “You've got to get that out of the way to say that that is not how you should actually be seeing it,” he said. “You've got to be ready to communicate.” |
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(Credit: IMF Photo/Alyssa Schukar) The IMF now expects growth in sub-Saharan Africa to ease to 3.8 percent in 2025 and 4.2 percent in 2026—marked down from October projections, driven largely by weaker demand abroad, softer commodity prices, and tighter financial markets, Director of the IMF’s African Department, Abebe Aemro Selassie said at a press briefing. Any further increase in trade tensions or tightening of financial conditions in advanced economies could further dampen regional confidence, raise borrowing costs, and delay investment, Selassie cautioned. Declining official development assistance places extra strain on the most vulnerable populations. Longstanding vulnerabilities, such as high debt and elevated inflation in some countries, remain. Selassie underscored the importance of calibrating policies to balance growth, social development, and macroeconomic stability—particularly through policies to strengthen resilience. “A strong, stable, and prosperous sub-Saharan Africa is important for its people but also for the world. It is the region that will be the main source of labor and incremental investment and consumption demand in the decades to come. External support as the region goes through its demographic transition is of tremendous strategic importance for future global prosperity.” |
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(Credit: IMF Photo/Tom Brenner) “More trade is better,” said the IMF’s European director Alfred Kammer, at his regional press briefing on Friday. While Europe’s growth for the next two years has been downgraded (for the Euro Area, 0.8% in 2025 and 1.2% in 2026, with downgrades of -0.2%), the IMF encouraged the continent to pursue regional and domestic reforms that boost productivity and growth and offset the increasing risks stemming from trade tensions, uncertainty and tight financial conditions. The briefing highlighted the Euro Area’s success in controlling inflation, with the IMF projecting that the European Central Bank’s target of 2 percent will be sustainably achieved by the second half of 2025. However, in Central, Eastern and Southeastern European (CESEE) countries, inflation is still higher and “more caution is needed” on easing policy. Kammer recommended that European countries continue moving forward in trade relationships. At the same time, the region should proceed with fiscal consolidation and with rebuilding spending capacity for future shocks and for long-term spending pressures, such as aging, health care and defense. Finally, the region should prioritize growth-enhancing reforms as outlined in the Draghi and Letta reports that could add up to 3 percent to the level of GDP. These include lowering labor mobility barriers, enhancing capital markets functioning and better integrating the electricity market. Kammer also highlighted the potential for domestic reforms, which could boost growth by about 5 percent in advanced Europe and between 7 to 9 percent in the CESEE region. “The biggest gains would come from raising skills of workers and improving the functioning of labor markets,” he said in prepared opening remarks. |
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(Credit: IMF Photo/Tom Brenner) “Today’s economic landscape is shaped by a complex interplay of global factors ranging from tariffs and value chain disruptions to commodity price and financial market volatility, and policy uncertainty,” Rodrigo Valdes, director of the IMF’s Western Hemisphere Department, told a press briefing on Friday. He added that the impact of these factors on growth is largely negative, even if trade diversion could benefit some countries. Growth in Latin America and the Caribbean is expected to decline from 2.4% in 2024 to 2% this year, a downward revision from October projections. Inflation is also expected to continue declining, although most countries will not reach targets before 2026. Valdes highlighted the importance of countries sticking to their policy frameworks, noting that “it is imperative for countries in the region to continue strengthening economic resilience.” |
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(Credit: IMF Photo/Alyssa Schukar) In an era where artificial intelligence is rapidly transforming industries, how can we ensure our workforce is prepared to thrive? This question set the stage for a lively panel discussion at the New Economy Forum, moderated by Era Dabla-Norris, Deputy Director of the IMF's Fiscal Affairs Department. The panel featured esteemed experts: Sir Christopher Pissarides, Regius Professor of Economics at the London School of Economics; Eric Parrado, Chief Economist at the Inter-American Development Bank (IDB); Stephanie Bell, Chief Programs and Insights Officer at Partnership on AI; and Alex Tamkin, AI Research Scientist at Anthropic. Era Dabla-Norris opened the discussion by highlighting an IMF study that found AI could potentially affect 40% of jobs worldwide. Sir Christopher Pissarides emphasized that for AI to boost worker productivity, three key issues must be addressed: information, skills, and geographic friction. Eric Parrado introduced the IDB’s new AI Generated Index of Occupational Exposure, a novel measure that quantifies the potential impact of AI on various occupations and their associated tasks. And Stephanie Bell stressed the importance of organizations protecting employee space and creating opportunities for workers to provide insights on leveraging AI in their daily activities, promoting efficiencies without diminishing their passion. She advocated for viewing workers as collaborators in building higher productivity. Alex Tamkin shared his experiences in accurately measuring AI's impact and usage, noting that many workers are using AI for educational purposes, expanding their knowledge in areas such as biology, mathematical calculations, coding, and clean energy. Era Dabla-Norris concluded the discussion with a thought-provoking remark: “If AI is rewriting the rules of work, today’s conversation really proves that we don’t have to let it write the ending.” |
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(Credit: IMF Photo/Alyssa Schukar & Tangyu Zhang) Artificial intelligence is rapidly evolving from automating routine tasks to becoming a predictive—and even prescriptive—tool in public finance. At Thursday's New Economy Forum Workshop, two panels explored how AI and GovTech are being used across governments, and how to scale responsibly while pushing innovation forward. "It's not about getting one big thing right… [it's about] getting 32 million things right," said Edward Kieswetter, Commissioner of the South African Revenue Service. Since introducing AI tools like chatbots, biometric facial recognition for e-filing registration, and web-based assistance, South Africa has added $18 billion to its fiscal year revenue. Kieswetter pointed to three key gains: streamlining services for taxpayers, stronger compliance and fraud prevention, and most notably, increased public trust. Across OECD countries, "there is no single or even preferred model [of adoption]", said Delphine Moretti, Working Party Lead on Public Financial Management and Reporting for the OECD. Governments are using AI to forecast economic trends and help inform spending decisions. France and Indonesia, for instance, use AI to monitor fiscal risk at the subnational level through accounting data. Still, oversight bodies, public financial management frameworks, and communities of practice are critical to help manage risk and ensure that innovation leads to real gains. In Brazil, AI is also being leveraged for fiscal education. Tania Gomes, Coordinator for Data, Products and Digital Transformation, Treasury of Brazil, showcased "Talk to SICONFI", a generative AI agent that answers queries on public fiscal data across federal, state, and local levels. Promoting training and digital literacy for AI is just as essential, she added. AI tools can be scaled broadly at extremely low costs, but doing so requires strong risk management frameworks and agile governance, says David Hadwick, a researcher at the Centre of Excellence 'Digitax'. Spanish Tax Agency's Chief Information Officer, José Borja Tomé, illustrated this with the agency's "test-and-pause" approach, underscoring that "assigning responsibility is key". Panelists agreed that policies guiding AI use in public finance should prioritize transparency, fairness, efficiency, and use trusted, high-quality data. Increasingly so, "the metrics of AI ethics correspond to the metrics of performance for these administrations," Hadwick added. |
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Navigating an Uncertain WorldHigh economic uncertainty may be an overarching theme of the IMF Spring Meetings. But it has been on an upward trend over the past few decades, reflecting a confluence of factors. In a panel discussion today, IMF Middle East and Central Asia Department director Jihad Azour highlighted recent Fund research showing how uncertainties have particularly large negative economic impacts in the region, affecting growth as well as investment. Muhammad Aurangzeb, Minister for Finance and Revenue of Pakistan, said that uncertainty provided opportunity to countries in the region. “We need to focus on what’s in our control,” he said, citing the example of crop yields, technological innovation, and increased trade with neighbors. European Bank for Reconstruction and Development (EBRD) Chief Economist Beata Javorcik agreed: “What's important is not which shocks hit you, but how you respond.” She added that uncertainty may create an impetus for action, “focusing minds and paradoxically leading to better outcomes” regarding opportunities. Elena Duggar, Moody's Chief Credit Officer - Americas, said that “the impact of trade measures and tariffs will play out over time. So it will be over the coming weeks and months that all of the impact on the economies will play up. But we've seen the financial markets have already reacted.” It’s important for countries to respond to uncertainty in a timely manner and to build buffers, according to Azour. “If you don't address an uncertainty issue for two years, you could lose four and a half percent of growth.” Marc Uzan, Executive Director of the Reinventing Bretton Woods Committee, moderated the discussion. |
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(Credit: IMF Photo/Tom Brenner) |
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TODAY'S MEDIA PARTNERSFrom market shifts to boardroom decisions, policy changes to power plays, Business Day remains the essential guide to the forces shaping the South African economy, while also reporting on the broader influences affecting the regional and African economy. Every story is your business. www.businessday.co.za Since 1993, Euronews is Europe’s leading international news media with a unique European identity and a multilingual model in 17 languages. Present on all digital platforms and on television, Euronews' mission is to give a meaning and a voice to Europe. Euronews. Making sense of Europe. |
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