Exactly 20 years on from the Asian financial crisis and 10 years on from the crisis in the advanced economies, achieving a secure and sustainable economic future for the world economy continues to be a challenge. While the global economy is beginning to show signs of stronger performance, unresolved vulnerabilities and ongoing fundamental changes to the economic environment have made the task for policy-makers even more complex.
The wide-ranging vulnerabilities have only been amplified by the low-interest-rate environment. Rising indebtedness and excessive risk taking are precipitating a misallocation of economic resources. Soaring financial asset prices that do not reflect the underlying fundamentals further reinforce this trend. Increasing income inequality is a further area of concern. Policy-makers are also confronted by changes arising from the digitalisation of the global economy with its disruptive technologies, including those associated with cybersecurity.
