IMF - World Economic Outlook, July 2023

The 2023 World Economic Outlook Update from the International Monetary Fund (IMF) provides an assessment of the global economy and financial system, highlighting both areas of resilience and persistent challenges. The report notes that while the global economy has shown near-term resilience, there are still concerns about the potential for sudden, sharp repricing of financial assets if there are upside surprises to inflation. Additionally, falling prices for commercial and residential real estate could add to pressures on indebted households and firms and weaken nonbank financial institutions exposed to vulnerable sectors. Many lower-rated issuers of sovereign bonds in emerging and frontier markets are still struggling to maintain access to international markets, which could exacerbate financial sector vulnerabilities. The report also notes that there are risks to the global financial sector from recent actions by US and Swiss authorities. Overall, the report suggests that policymakers should remain vigilant and take steps to address vulnerabilities in the global economy and financial system. This could include measures such as strengthening supervision and monitoring risks, employing macroprudential policy measures, and rebuilding fiscal buffers while protecting vulnerable populations.