In her speech at the conference organized by the South African Central Bank, International Monetary Fund (IMF) First Vice-President Gita Gopinath stated that external conditions have changed for emerging markets due to challenging global financial conditions, increasing geoeconomic divergence and rising costs of climate change.
Pointing out that these changes transformed the economic environment, Gopinath emphasized that they made the world more volatile and uncertain.
Gopinath stated that global financial conditions have become more challenging, “We expect global interest rates to remain high for a long time while the struggle to return inflation to the target continues. Moreover, there are reasons to think that it may never return to the period when interest rates were low for a long time.” made its assessment.
Noting that the financing conditions for developing countries can be expected to continue to be challenging in this environment, Gopinath stated that strengthening macro fundamentals is of critical importance to overcome all kinds of difficulties, old or new.
Gopinath stated that emerging markets need to rebuild their fiscal buffers in the face of a challenging economic environment, increase resilience to divergence through trade diversification and reforms, and implement a fiscally and socially sustainable climate strategy.
