Global Perspectives and Policies

Global growth is projected to slow down after a period of stable but disappointing performance, amid changes in policies and new uncertainties. Overall global inflation is expected to decrease further, despite upward revisions in some countries. The risks to the outlook are tilted to the downside. Escalating trade tensions and high policy-induced uncertainty could further hinder growth. Changes in policies could lead to a sharp tightening of global financial conditions and capital outflows, which would particularly affect emerging markets. Demographic changes threaten fiscal sustainability, while the recent cost-of-living crisis could reignite social unrest. More limited international development assistance could further indebted low-income countries, jeopardizing their standard of living. At this critical juncture, it is necessary to calibrate policies to foster international cooperation while ensuring domestic economic stability, thereby contributing to reducing global imbalances.