Indeed, the economic outlook has significantly darkened in recent months. We are now confronting higher and more persistent inflation, tighter financial conditions and a global growth slowdown. The war in Ukraine looms over the current outlook and is exacerbating the impact of all these economic challenges. As a consequence, recession risks are spreading, and there is considerable volatility in financial and commodities markets. At the current juncture, decisive economic policies are more important than ever. From the perspective of central banks, fulfilling our mandate of ensuring price stability is crucial. Decisive action by us in the current juncture will support medium-term growth, by reducing inflationary pressures and avoiding a de-anchoring of inflation expectations. Communicating clearly and transparently is key to avoiding disruptions in financial markets. From the perspective of governments, it is critical that they provide support to the most vulnerable households and firms. But this support must be temporary and targeted. In particular, we need to avoid a general fiscal stimulus that amplifies current inflationary pressures or a permanent increase in fiscal imbalances that would weigh on public debt sustainability. In other words, consistency between fiscal and monetary policy is of the utmost essence. And beyond this immediate response to the crisis, governments need to look beyond the current juncture and press ahead with structural reforms to increase medium-term growth potential. In particular, they should focus on the green transition and rethink the functioning of energy markets.

1  Moreover, the most indebted countries should, with a medium-term perspective, reinforce the sustainability of their public accounts. A particular difficulty when designing policy responses in the current context is the extraordinary uncertainty and volatility currently surrounding the global economy, which generates risks of policy miscalculation and disruption to financial markets, and requires policymakers to stand ready to adjust policies depending on how the situation evolves. This is clearly how monetary policy is currently being conducted, with data-dependent decisions being made on a meeting by meeting basis, but this may be more difficult to achieve in the case of fiscal policy, given the longer implementation lags involved. From a more global perspective, economic policy-making is facing the challenge of increasing geopolitical tension. If this trend ends up triggering a scenario of runaway fragmentation, the consequences in terms of trade and financial flows, productivity, inflationary pressures, and ultimately economic activity would be very severe. With this in mind, it is not difficult to conclude that, amid the increasing risk of fragmentation in the international sphere, strengthening supranational policies and institutions, which support international cooperation, is more important than ever. I firmly believe that our multilateral system, with the necessary reforms and adaptations to the new circumstances, remains pivotal to global progress, as has been the case over the last few decades. In this respect, I believe that forums like this one are an example of fruitful international cooperation, insofar as they enhance regional cooperation and dialogue.