The global financial stability risks have increased since April and have led the balance of risks to be skewed to the downside, the International Monetary Fund (IMF) said in its updated 2022 Global Financial Stability Report on Tuesday
WASHINGTON (Pakistan Point News / Sputnik - 11th October, 2022) The global financial stability risks have increased since April and have led the balance of risks to be skewed to the downside, the International Monetary Fund (IMF) said in its updated 2022 Global Financial Stability Report on Tuesday.
"Global financial stability risks have increased since the April 2022 Global Financial Stability Report (GFSR), and the balance of risks is significantly skewed to the downside. The range of adverse GDP growth outcomes based on the probability distribution of future GDP growth is in the worst 20th percentile of the last four decades," the report said.
The IMF pointed out in the report that the financial vulnerabilities have elevated in the sovereign and non-bank financial institution sectors, while market liquidity has deteriorated across some key asset classes.
The fragile global environment, high inflation and deteriorating economic outlook for many countries are the major drivers that have led to the current situation, the report said.
The IMF also warned about the risk of disorderly tightening in the governments' bid to fight inflation, the report said.
"With the global economy facing a number of challenges and policymakers continuing to normalize policy to tame high inflation, there is a risk of a disorderly tightening of global financial conditions that may be amplified by vulnerabilities built over the years," the report added.
