Front Matter Page
THE MANAGING DIRECTOR’S GLOBAL POLICY AGENDA
CONFRONT GLOBAL CHALLENGES TOGETHER
April 2015
Against a backdrop of declining oil prices, sharp variations in exchange rates, and market volatility, global growth remains uneven. The prospect of a new mediocre lingers as medium-term forecasts have been marked down since the last GPA. Promoting balanced, sustained growth requires an integrated policy package that bolsters today’s actual and tomorrow’s potential output, diminishes risks, and confronts emerging global challenges. Specifics include:
Lifting Today’s Growth. Boosting growth and jobs requires continued monetary accommodation and supportive fiscal policies, where possible. But improving policy effectiveness and securing financial stability is crucial. This includes tackling debt overhangs and encouraging productive investment rather than excessive financial risk-taking. The approaching increase in the U.S. interest rate and large currency variations call for proactive policies to manage risks and growing leverage, particularly by emerging market firms. Stronger fiscal frameworks can make revenue and spending more growth friendly and contain fiscal risks.
Fortifying Tomorrow’s Prospects. Structural reforms are lagging compared to other areas of the global policy agenda. Targeted structural reforms can boost investment and productivity. While bottlenecks vary, priorities include advancing energy subsidy reforms to take advantage of lower oil prices, financial deepening, upgrading infrastructure, increasing employment, removing distortions in product markets, and improving the business environment. Trade reforms in traditional areas and emerging ones such as services and regulations can complement and augment other structural reforms.
Working Together for the Future. The recent impact of asynchronous monetary policies on currencies and capital flows underscores the need to make the International Monetary System more resilient, promote the continuing integration of dynamic emerging economies, and ensure an adequate and cohesive global safety net. Anchored by three major international conferences, 2015 marks an unprecedented opportunity for the world to chart the course for sustainable development for the next decade and beyond.
Fund Initiatives. The Fund will help members deliver on this policy agenda by providing flexible financing arrangements to members facing pressing challenges. The Fund also will closely link policy advice and capacity development and highlight priorities such as implementing growth-friendly fiscal policies, macro-critical financial and structural reforms, and addressing debt overhangs. The Fund will take stock of challenges facing the international monetary system, embrace the 2015 global development agenda, and tailor its work to meet members’ evolving needs. Full implementation of quota and governance reforms remains the highest priority.
