WASHINGTON (Pakistan Point News / Sputnik - 11th April, 2023) The uncertainty about the world economic forecast has increased due to recent financial market volatility, the International Monetary Fund (IMF) said in its World Economic Outlook report.
"With the recent increase in financial market volatility and multiple indicators pointing in different directions, the fog around the world economic outlook has thickened," the report said.
Last week, the IMF warned in a blog regarding its latest Global Financial Stability Report about potential intensified risks to banks and the financial sector in the coming months amid continued tightening of monetary policy globally.
The report highlighted that nonbank and market-based finance had significant growth since the last global financial crisis. Global financial assets held by nonbank financial intermediaries (NBFIs) has grown from about 40 to nearly 50 percent, it added.
Such a development in part was a consequence of regulatory and supervisory initiatives that have made the banking system more resilient and have effectively pushed activities to other segments of the financial system, the report added.
The IMF also said the sector's vulnerabilities increased in the past decade.
The IMF called on policymakers to get appropriate tools to tackle turmoil in this sector, adding that problems there may adversely affect financial stability.
The fund advocated for international cooperation on the issue, adding that it will help to better identify risks and manage possible crises.
