Central banks facing pandexit challenges

Speech by Mr Agustín Carstens, General Manager of the BIS, on the occasion of the Bank's Annual General Meeting, Basel, 29 June 2021.

BIS speech  | 
29 June 2021

After an unprecedented global downturn last year, a remarkable recovery is under way in many countries. However, policymakers face many challenges, with the Covid-19 pandemic far from over, the recovery highly uneven and incomplete, and the global outlook uncertain. Fiscal policy needs to remain supportive, yet has to become more targeted. In the face of many near-term uncertainties, including the risk of higher inflation or the pandemic intensifying once again, monetary policy will need to proceed flexibly and communicate carefully. With public and private debt very high and the pandemic's adverse legacies large, many longer-term challenges loom. These include treading a sustainable path for fiscal and monetary policies and avoiding tensions between the two. The best way to overcome these challenges is through higher sustainable growth, which calls for forceful and continued structural reform policies, supported by growth-friendly fiscal measures.

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