July 18, 2025
KwaZulu-Natal, South Africa: Gita Gopinath, First Deputy Managing Director of the International Monetary Fund (IMF), addressed the third meeting of the G20 Finance Ministers and Central Bank Governors in KwaZulu-Natal. She expressed gratitude to South Africa for hosting the event and acknowledged Minister Godongwana and Governor Kganyago for leading discussions on economic and financial issues.
Gopinath noted that "high levels of policy uncertainty remained a key theme" during the talks but emphasized a shared objective to navigate these uncertainties to spur growth both domestically and collectively.
The global economic outlook remains uncertain. The IMF's April World Economic Outlook forecasted global growth at 2.8% in 2025 and 3.0% in 2026, below the historical average of 3.7%. Major economies like the U.S. and China faced downgrades due to policy uncertainty, trade tensions, and softer demand momentum. Global headline inflation is projected to decline slowly, reaching 4.3% in 2025 and 3.6% in 2026.
Gopinath mentioned improvements in global financial conditions due to some trade deals lowering tariffs, although downside risks continue to dominate the outlook.
Policy priorities should focus on resolving trade tensions and implementing macroeconomic policies to address domestic imbalances. This includes restoring fiscal space, ensuring debt sustainability, maintaining price stability through careful monetary policy calibration, protecting central bank independence, and pursuing structural reforms for medium-term growth.
Strengthening public finances is crucial, particularly through domestic revenue mobilization. The IMF supports countries in reforming tax policies and improving tax collection efficiency.
Despite resilient capital flows to emerging markets and developing economies (EMDEs) in 2025 amid financial volatility, financing conditions remain tight for many borrowers. Domestic reforms are essential to lower capital costs and attract investment.
For countries with unsustainable debt, efficient restructuring mechanisms are necessary. Progress has been made with publications like the Global Sovereign Debt Roundtable’s “Restructuring Playbook” but further advancements are needed.
Financial sector issues remain a concern with stretched asset valuations and high leverage use posing risks amidst geopolitical uncertainties. Vigilant surveillance is essential alongside improving cross-border payment systems through new technologies.
The IMF welcomes efforts focused on bolstering Africa’s growth potential by addressing macroeconomic vulnerabilities with international support remaining critical through concessional financing and capacity development.