Chapter 2: Wage Dynamics Post–COVID-19 and Wage-Price Spiral Risks

Inflation has reached a 40-year high in some economies. Although wage growth has generally stayed below inflation so far, some observers warn that prices and wages could start feeding off each other, with wage and price inflation ratcheting up in a sustained wage-price spiral. This chapter examines past and recent wage dynamics and sheds light on prospects. Similar historical episodes were not followed by wage-price spirals on average. Analysis highlights that more backward-looking expectations require stronger and more frontloaded monetary tightening to reduce risks of inflation de-anchoring. Risks of a sustained wage-price spiral appear limited since underlying inflation shocks come from outside the labor market and monetary policy is tightening aggressively.

Chapter 3: Near-Term Macroeconomic Impact of Decarbonization Policies

Decades of procrastination have transformed what could have been a smooth transition to a more carbon-neutral society into what will likely be a more challenging one. By the end of the decade, the global economy needs to emit 25 percent less greenhouse gases than in 2022 to have a fighting chance to reach the goals set in Paris in 2015 and avert catastrophic climate disruptions. Using a new model developed at the IMF (GMMET), the chapter analyses the near-term macroeconomic impact of feasible decarbonization policies and potential challenges for monetary policy.

2022 Annual Report: Crisis Upon Crisis

The report, available in nine languages, highlights the IMF’s work on COVID-19 recovery and the impact of Russia’s invasion of Ukraine; inflation; how to achieve an equitable recovery; debt; and climate change, digital money, and inclusion.

Annual Report, 2022

Chapter 3 Asset Price Fragility in Times of Stress: The Role of Open-End Investment Funds

Chapter 3 analyzes the contributions of open-end investment funds to fragilities in asset markets. Open-end investment funds play a key role in financial markets, but those offering daily redemptions while holding illiquid assets can amplify the effects of adverse shocks by raising the likelihood of investor runs and asset fire sales. This contributes to volatility in asset markets and potentially threatens financial stability. The impact of these vulnerabilities could also spillover to emerging markets and lead to a tightening of financial conditions. To correct course, policymakers should ensure that liquidity management tools are available, calibrated appropriately, and utilized by funds.

IMF Strategy Toward Mainstreaming Gender

Mainstreaming gender at the IMF starts with the recognition that reducing gender disparities goes hand-in-hand with higher economic growth, greater economic stability and resilience, and lower income inequality. At the same time, economic and financial policies can exacerbate or narrow gender disparities. Well-designed macroeconomic, structural, and financial policies can support efficient and inclusive outcomes and equitably benefit women, girls, and the society in general.

Pandemic, War, and Global Imbalances

Global current account balances—the overall size of current account deficits and surpluses—continued to widen in 2021 to 3.5 percent of world GDP, and are expected to widen again this year. The IMF’s multilateral approach suggests that global excess balances narrowed to 0.9 percent of world GDP in 2021 compared with 1.2 percent of world GDP in 2020.

IMF Regions

Asia and the






Middle East









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