Christian Mumssen, the International Monetary Fund's newly appointed director of strategy, told officials on Wednesday that maintaining credibility in both fiscal and monetary policy is essential to preserve price stability in a period marked by unusually high uncertainty.
Addressing an audience at the Atlantic Council, Mumssen listed a succession of large shocks that have buffeted the global economy in recent years. He cited the coronavirus pandemic, cost-of-living crises, persistent trade frictions and the wars in Ukraine and the Middle East as factors that have strained policymakers' ability to keep inflation under control.
He warned that price stability remains vulnerable to frequent supply disruptions and urged governments to strengthen resilience to shocks and geopolitical tensions. "Governments must pay close attention to sound public finances and debt, inflation, jobs and growth," he said, adding that enhanced resilience is needed to manage the higher degree of uncertainty the world now faces.
Mumssen drew attention to rapid technological developments as another source of disruption and opportunity. "Technologically, artificial intelligence and digital finance are advancing at a speed few of us anticipated. And geopolitically, the post-war global order is giving way to a more fragmented, multipolar world," he said. He described the current moment as one in which multiple major transformations are occurring simultaneously, elevating the risks that policymakers must manage.
Highlighting the importance of inclusive outcomes from fast-moving technical change, Mumssen said it is critical to ensure that the rapid AI transformation contributes to broad-based growth. He urged governments to engage with the IMF to develop appropriate responses and solutions to these combined structural and technological challenges.
Mumssen also sounded a caution on global cooperation. "The problem is: just when massive structural challenges and a new technological revolution would call for greater international cooperation, the global governance system is fragmenting," he said. The comments underscored his view that fragmentation complicates coordinated policy action at a time when countries face overlapping shocks.
While noting that the global economy has shown resilience, Mumssen emphasized that the scale and simultaneity of changes create an "exceptionally high degree of uncertainty - and we should expect the unexpected." His remarks stressed the twin priorities of maintaining credible macroeconomic policy and building buffers against supply-side and geopolitical shocks.