Forum told resilience of international supply chains is critically important

Enhancing communication and macroeconomic policy coordination to cope with potential debt threats and a high level of inflation will be key to global economic recovery next year, experts and former officials said.

Joining the annual meeting of the International Finance Forum via video link on Saturday, Gita Gopinath, chief economist of the International Monetary Fund, said countries are experiencing wide differences in their pace of economic recovery from the impact of the COVID-19 pandemic, and the world is facing notable downward pressure.

She suggested all countries expedite COVID-19 vaccination and make policy adjustments to cope with inflationary pressure in light of their domestic conditions.

Monetary policies should be crafted in light of a country's specific recovery condition, while credit must be maintained for both the monetary and fiscal policy frameworks, Gopinath said. As global economic recovery is not yet stable, she urged central banks of all countries to enhance communication and coordination on monetary policies to avoid panicking the market.

"Keeping international supply chains unimpeded and resilient to make room for innovative and unconventional economic policies is critically important for a steady global economic recovery," Zhou Xiaochuan, former governor of the People's Bank of China, China's central bank, said during the weekend event.

His view was echoed by Jin Liqun, president of the Asian Infrastructure Investment Bank, who urged a multilateral approach in coping with challenges in supply chains and climate change.

Former Australian prime minister Kevin Rudd, also speaking at the event via video, warned that the large debts accumulated by countries, particularly developing ones, because of the COVID-19 pandemic will be a truly pressing issue for global recovery.

The outlook for the Chinese economy is expected to be brightened by stronger domestic demand and its expanding middle-income consumer base. Huang Qifan, former mayor of Chongqing and chairman of the Institute of Internet Industry's advisory board on industry transformation at Tsinghua University, said via video that the Chinese economy will demonstrate some new features.

"The country is fostering a stronger, more resilient and globally competitive industrial chain, and the population of the middle-income group in China will reach 800 million by the year 2035, fostering greater consumption capacity for the next few years," he said.

The weekend event issued a report on global finance and development that forecast 5.9 percent growth for the global economy this year and 4.7 percent growth next year. It projected that global consumer price inflation will reach 4.5 percent this year before moderating to 3.8 percent next year.