While presenting his first budget speech as the territory’s leader earlier this week, Dr Wheatley shared that the IMF’s World Economic Outlook published in October 2022 forecasts that global growth will slow from 6 per cent in 2021 to 3.2 per cent in 2022, and 2.7 per cent in 2023. 

The IMF further noted that about a third of the world economy faces two consecutive quarters of negative growth, and global inflation is forecast to rise from 4.7 per cent in 2021 to 8.8 per cent in 2022. It will see a further decline to 6.5 per cent in 2023 and 4.1 per cent by 2024. 

“That is still very high,” the Premier said.
“With an outlook such as this, governments and people in countries everywhere will not have an easy time, and they will have to distinguish between things they “want” and things they “need”. Even things that fall in the category of “needs” will have to be prioritised,” the Premier said.

Impossible situations

Dr Wheatley also shared that the World Economic Forum (WEF), in its Chief Economist’s Outlook published in September 2022, describes the present as “a time of significant economic danger”, with persistent, surging inflation at levels not seen in a generation.

According to that outlook, it is expected that there will be a sharp tightening of monetary policy in many countries that threaten global growth; freefall of wages and consumer confidence that increase the prospect of social unrest in many countries; and increased human suffering; among other effects.

“Governments worldwide have been placed in near impossible situations because every response option comes with high cost and even higher risks.”

Premier Wheatley further explained that according to the WEF outlook, traditional approaches to rein in inflation risk triggering a recession and a spike in unemployment. 

Fast-tracking green energy transition

The Premier also noted that the IMF has made some suggestions for how to survive these challenges in the long run. 

He explained that these suggestions include intensifying structural reforms to improve productivity and economic capacity, and also fast-tracking policies for the green energy transition to boost energy security and mitigate some of the costs associated with climate change.

“Being prepared and resilient tomorrow requires making the tough decisions and doing the work today, “ the Premier said. “Perhaps the one consolation in crises is that challenges create the atmosphere for innovation. As people are confronted by problems, they find creative ways to overcome them. This is one of the strengths of the indomitable Virgin Islands people throughout our generations.”