BIS Annual Economic Report Chapter 1
by Agustín Carstens
Key takeaways:
- Following the most synchronised and intense monetary policy tightening in a generation, inflation has declined substantially with little collateral damage so far. The financial system has been largely strain-free since March 2023, and market pricing suggests a smooth landing.
- That said, a number of pressure points could throw the global economy off track. Inflationary pressures may prove more stubborn than anticipated, growth may stall and long-standing fiscal and macro-financial vulnerabilities may lead to stress.
- Monetary policy will need to finish the job on disinflation. Fiscal policy will need to consolidate. Prudential policy will need to remain vigilant and continue efforts to enhance resilience. Structural policy will need to set the basis for sustainable growth and prepare the economy for the challenges ahead.
Link:
BIS Annual Economic Report Chapter 1: Laying a robust macro-financial foundation for the future