Opening Remarks by Deputy Managing Director Kenji Okamura at the 7th IMF-JICA Conference, Tokyo, Japan
Honorable Ministers and Governors, President Tanaka, Vice Minister Mimura, and Ladies and Gentlemen:
Welcome to the 7th IMF-JICA Conference. I am so pleased to be here. Let me first express my gratitude to our co-organizer, JICA, and to the Japanese authorities for their generous support. My thanks also to the JICA and IMF staff who have been working for months to organize this event.
Let me start with the good news. Despite the shocks of recent years, the global economy has remained surprisingly resilient. Our global projections released in January suggest global growth will hold steady at 3.3 percent this year and next.
Having said that, divergences across countries are widening. The U.S. is outperforming its advanced economy peers with stronger growth than projected. By contrast, growth in the Euro area will increase only modestly due to weak momentum and high energy prices.
For emerging market economies, growth projections remain at 4.2 percent and 4.3 percent this year and next. We revised up our growth forecast for China slightly for this year and next. But growth remains slower than in past years and is now more like that of other emerging market economies.
These forecasts could easily change. There is tremendous uncertainty. The world is changing rapidly: global trade and capital flows are shifting; AI is fast advancing.
Policymakers will need to be agile and focused on building resilience and lifting growth, which is key to raising living standards and creating jobs. We will discuss how to do that in some of the topics covered today but let me focus on three priorities.
First, implementing reforms to lift productivity. There is no one-size-fits-all approach, but measures that improve the business environment and encourage entrepreneurship, like cutting red tape and deepening capital markets are important. And through our surveillance, we will work with you to identify the right approach with granular and tailored policy advice.
The second priority is to rebuild fiscal buffers. Public debt and debt servicing ratios in Asia are well above pre-pandemic levels, especially in many Pacific Island countries and emerging markets. Well-designed and growth-friendly fiscal consolidation can reduce debt risks, and create the fiscal space needed to deal with shocks and challenges like ageing or climate change. The Fund can provide useful capacity development in this area, including through peer-to-peer learning.
Finally, strengthening cooperation. By working together, Asian countries can leverage their collective strengths. In a changing world, this can help buffer against shocks and heightened uncertainty.
Among Asian countries, cooperation in the areas of AI, digital connectivity, and cross-border digital payments is moving fast, and could be a big boost to growth.
Let me add one more point as an important message from my end. The IMF continues to play its part at the center of the Global Financial Safety Net (GFSN). My goal—as the Deputy Managing Director that oversees the Fund’s finances—is to ensure that the IMF remains financially strong and sound well into the future. We are also committed to helping Regional Financing Arrangements (RFAs) in Asia be important elements of the GFSN.
In conclusion, I hope that today’s sessions can contribute to strengthening our ties, as we all navigate these uncertain times together.
Thank you.