Hi all, greetings from Tokyo!
At the centre of this vibrant metropolitan of Japan, the IMF/World Bank Joint Annual Meeting is currently being held, from 8th to 14th October. The conference is mainly held at the Tokyo International Forum (along with Hotel Okura), situated near Tokyo station – which takes only 20 minutes on subway from where I live.
Let me first go through the important remarks from the IMF publications that were announced so far.
On Tuesday morning, the World Economic Outlook (WEO: October 2012 edition) was publicly released by the IMF’s top economist, Olivier Blanchard who is also the author of my college economics textbook! He estimated that the global growth rate will be 3.5% in 2013, down from 3.9% in its previous forecast. The WEO warns that the economy would slow down even more if the European policy makers don’t sufficiently handle the region’s sovereign debt crisis. It is also stated that emerging markets would stay relatively solid, in contrary to the sluggish trends in advanced economies. The global unemployment rate would remain high with a fragile financial condition.
Right after the WEO was announced, the IMF’s Fiscal Monitor was illustrated by Carlo Cottarelli, the Director of the IMF’s Fiscal Affairs Department. While the Fiscal Monitor noted the progress in fiscal consolidation around the world, it also cautioned against a high level of fiscal vulnerabilities lingering on. It was recommended that structural adjustments (particularly in advanced economies) “should proceed at a pace that is consistent with the state of the economy.”
Also, on Wednesday, Global Financial Stability Report (GFSR) was presented by Jose Vinals, the Director of Monetary and Capital Markets Department. The report recognised that the European crisis avoided its worst case scenario through “significant efforts” by the regions’ governments. However, it pointed out the banks’ capital vulnerability and high interests of sovereign bonds in corporate sector, despite the increasing financial stability since April. And hence, it is necessary for government debts to be downsized. IMF urged that the risks of Europe, US, and Japan should be tackled without delay.
In addition to the publications of economic forecasts and policy recommendations, the conference held side events in Okura hotel, including workshops and seminars. One of them was the workshop on SMEs’ financial issue which was held on Tuesday the 9th. The workshop was a great success to share perspectives by different countries including Japan and other emerging nations such as Philippines and Kenya. Wednesday’s schedule was a seminar marathon from morning to evening. In one day, four seminars by IMF and WB were held, respectively on 1) sovereign risk, capital markets and financial stability, 2) public debt sustainability, 3) development and sustainable growth, and 4) natural resources. Each seminar was held with high profile participation from IMF, public and private institutions, and academe from all over the world.
As I am writing this article in the middle of this event, I would like to touch upon the upcoming schedule: the head of IMF, Christine Lagarde, holds a press briefing this morning (on 11th of October), and the IMF and WB’s plenary meeting will be held on Friday. Today is also the day of G7 financial ministers and central bank governors meeting in Tokyo, which means that we will be able to get a bigger picture of global financial policy dialogue later this week.
So, allow me to come back with fruits of IMF/WB and G7 conferences next week, and please closely follow up on FSC’s other posts that will deliver latest financial policy news from Korea. Bye for now!