Mouatassem Boudiaf: IMFC Deputies meeting Statement

Statement by Mr Mouatassem Boudiaf, Deputy Governor of the Bank of Algeria, on behalf of the Islamic Republic of Afghanistan, Algeria, Ghana, Islamic Republic of Iran, Libya, Morocco, Pakistan, and Tunisia, at the IMFC Deputies meeting, Session 1 "Global Economic Outlook" and Session 2 "Managing Director's global policy agenda", Washington DC, 20 September 2022.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Session 1

Global Economic Outlook

• Thank you Chair. I also thank the First DMD for the lucid presentation. Since our last meeting, the global economy continues to face strong global headwinds, triggered by the cumulative negative spillovers of the two overlapping crises. Risks to the global outlook feared in April, and even as late as July, have materialized, and the outlook continues to be subject to unusually high downside risks, due to a number of global economic and political factors. We are also facing a global inflation crisis reflecting the consequences of the unprecedented policy support during the pandemic and the pandemic's lingering impact on supply chains. In most cases, price pressures predate the conflict in Ukraine, but were exacerbated by direct and indirect impacts of the war.
• Taming the global inflation would require a collaborative approach and coordinated policy action. It is understandably a delicate balancing act and policy slippage, in either direction, would potentially have severe consequences, including a prolonged global recession in case of over-tightening, that we can ill afford. In fact, the global tightening of financial markets and the sharp real appreciation of the US dollar are already having pronounced adverse impact on EMDEs through capital flows, currency depreciation and debt distress. The increase in sovereign spreads has elevated debt at risk for vulnerable EMDEs, including those in our constituency.