 Hello everybody, welcome to this World Economic Forum, Global Economic Outlook. My name is Jeff Cutmore and you are all very welcome. Let me introduce our panelists to you. We've got a terrific lineup. Kristalina Gorgieva is the managing director of the IMF. Paulo Geddes is the Minister of the Economy for Brazil, Sri Malyani Indrawati, the Minister of Finance for Indonesia. Harahiko Koroda, the governor of the Bank of Japan and of course Christine Lagarde is the president of the European Central Bank. Before I ask some questions, let me just make a few comments. Policymakers face a global economy this year marked by divergence in growth, vaccines and of course fiscal resources. Inequality of opportunity is now compounded by not only high inflation but in some countries high unemployment rates. And of course we've got high levels of debt and those high inflation rates. So leadership and coherent policymaking at this point is critical. But my question is, is there a risk in using the Orthodox playbook in unorthodox circumstances? Have we set the current policy course correctly? And are we all on the same page effectively when it comes to how we beat inflation, how we maintain growth and how we level out the playing field in terms of livelihoods? Managing director in that context and as we focus on the great unwind in monetary policy and emergency conditions. Can I start with you? How do policymakers respond appropriately to stubborn inflation if ultimately it coincides with slower growth? We had a jobless claims number in the United States yesterday that imply perhaps growth is slowing now in the world's largest economy in terms of employment. That does raise some questions about whether our central banks are pursuing the right strategy and whether stagflation is not potentially a higher risk than many have assumed. Let me start by saying that the response to this crisis so far has been anything but Orthodox. It was diagnosed correctly at the beginning of the pandemic as both supply and demand shock. And in a highly coordinated manner, both central banks and finance authorities have responded in a way that prevented the world into falling into yet another great depression. And you are absolutely right. We have to be data-driven and we have to be flexible. So if I were to use the factor still in January and offer policymakers a new year resolution, it would be policy flexibility. Why? Because 2022 is like navigating an obstacle course with all the risks you outlined. Inflation, COVID continuing and high debt levels. So what is that we anticipate for 2022? On the good news side, we anticipate the recovery to continue. But it is losing some momentum and it is faced with the renewal of infections on top of them the persistent, much more persistent than anticipated inflation. And on top of it, the record high debt levels, $226 trillion in debt. And since your question is specifically on inflation, we need to understand why inflation is higher and more persistent in many places. And when we understand the reasons, it would be clear that it is not just for central bankers to fight it. So what are the reasons? And actually we have very competent, much more competent than me as speakers to step forward. But if you look at the reasons for inflation, one is demand surging with supply being higher still falling behind. And supply interruptions primarily caused by COVID, by restrictions that are associated with the waves of COVID still with us. The pressure on prices comes from food prices shooting up to a certain degree because of climate impacts and because of energy prices shooting up. And this is a very complicated story in which that there is also an element of geopolitical tensions. And then we have a phenomenon that is strictly related to the pandemic. And it is the fact that labor markets are changing. We see that everywhere, but especially in countries where unemployment has fallen quite significantly. So when you this aggregate the reasons for inflation, then you understand that it is for central banks to be evidence data driven to communicate clearly. But it is also for other segments of policymaking that has to be in place. First and foremost, we need to recognize the importance to fight the pandemic to build our response capabilities everywhere. And unfortunately, this is still not quite where it should be. We have 86 countries, Jeff, where the target of 40% at least vaccinations by the end of last year has not been met, 86 countries. If you compare Sub-Saharan Africa to advanced economies, in Sub-Saharan Africa vaccinations, 7%, in advanced economies, 70%. Obviously, this also has significance for supply chain disruptions. And it has significance on this very dangerous divergence that we are seeing in the world economy. So just to stop here, we have to recognize the complexity of the challenges. We also have to recognize that even this one inflation is country specific. I look at my dear good friend, Kuroda-san. He has the opposite problem. He needs to lift up inflation. So that country specificity is what makes 22. In a way, even more difficult than 2020. Why? In 2020, we had similar policies everywhere because we were fighting the same problem. An economy in standstill. In 2022, conditions in countries are very different. So we cannot anymore have the same policy everywhere. It has to be country specific. And that makes our job in 2022 so much more complicated. Absolutely, managing director. But of course, as we all know, there are some central banks that have a greater impact on the rest of the world than others. And in that context, let me just ask you, the talk is of the Federal Reserve, quote, regaining credibility by hiking interest rates next week. Now, does that language sound unhelpful in the context of a pandemic recovery? We have to be very humble in terms of how we determine actions at the time of high uncertainty. The Fed is acting responsibly because inflation in the United States is turning into an economic and social concern. We also know that actions by the Fed are very significant for the US. So this delicate balancing act between fighting inflation but protecting the recovery is something that I am confident the Fed is very mindful of. The issue here is that what the Fed does has implications for the US. It has implications for other countries, especially for those that have high level of dollar denominated debt. And there that could throw cold water on what for some countries is already a weak recovery. And this is why what the Fed is doing to clearly communicate, to prevent surprises is hugely important. And now a message to countries with high level of dollar denominated debt is act now. If you can extend maturities, please do it. If you have currency mismatches, now is the moment to address them. And I can tell you where my worry is high is it is for low income countries where 60% of them are now either in debt distress or in the danger of debt distress. This is twice as much as in 2015. So we have to be careful how we also support those that without international support are going to be in deep, deep trouble. We'll come back to the debt story a little bit later on because I think it's very interesting in the context of Indonesia and its role heading up the G20 this year. So we'll, if you'll excuse me, come back to debt a little bit later on. But I want to talk some more about this great unwind and President Lagarde, I should bring you in. This week, as you know, the markets pushed the 10 year boom yield positive. We saw in the data, the highest factory gate prices, PPI numbers in Germany since 1949. Now you have consistently said that you are going to act much less aggressively than the Fed. So can I ask you, how does a piece of data like that from Germany come into your considerations? Because there are many who think that this horse has already bolted and you just haven't got to the stable door in time. You see, the beauty of Europe is that it is not just one country, however big it is. It is, as far as the Euro area is concerned, 19 countries that share a single currency, the Euro, which has just celebrated its 20th anniversary, by the way. So what we need to look at is numbers from all such countries to determine an average, both in terms of GDP, in terms of inflation, in terms of employment. And then of course we have to look underneath on a disaggregated basis to appreciate the differences and value the convergence efforts that will be undertaken using all sorts of policy tools. So what are we seeing at the moment? We are seeing a recovery that has been stronger than anything we had expected. If you remember, Jeff, a year ago, we were together and we were hoping for some recovery. Little did we know that recovery would be as strong and as fast as it has been, particularly in the advanced economies. And I could not agree more with what Chris Salina has indicated about the divergence, the divide, the different rhythm at which countries are progressing. But in the advanced economies, it has just been staggering. And in a way, we are victim of our own success, whether it is scientific success as a result of vaccinations moving much faster than we had anticipated, whether it is a combination of monetary policies and fiscal policies working hand in hand and deliberately avoiding the scaring that we would have had, the massive layoffs that we would have had, had those two policies not join hands to respond exceptionally to this exceptional situation. So being victim of our own success, it doesn't stop us from having to be state dependent, data dependent, numbers dependent. And on that front, if there is one thing that all economists have learned in the course of this crisis is a lesson of humility because whoever you look at, whether it's the ECB, whether it's the IMF, whether it's the OECD, whether it's all those forecasters, however professional they are, we all massively underestimated both the recovery, both the employment participation, as well as obviously inflation. So as far as I'm concerned from our corner of the world, we look at what is behind the numbers. So when we see that 5% year on year number in December, which was a striking number for inflation, we hadn't seen that in years and years because we had suffered from too low inflation for too long. We have to ask ourselves, where is it coming from? Is it likely to last? And we are trying to figure out how long it will last because that is going to be critical in really composing the policy response that will be needed. And what do we see under the numbers? Well, we see 50% energy prices. And as Crystalina alluded to, it is not just the recovery. It is also geopolitical factors that are critically important at the moment, unfortunately. It is also some idiosyncratic factors. It is some weather related factors. And the rest, essentially taking out a few base effects that will eventually clear out in the next month, actually, we see a lot of this super strong recovery that has outpaced supply, which was constrained. And as a result of that, we all talk about the bottlenecks, the congestion of ports, the lack of truck drivers and what have you. So then you ask yourself, these two big factors, are they going to be with us for the long term? Are they going to affect this inflation number and make it sustainable? And will that dictate our monetary policy response? And on all those fronts, we have to look at special indicators, one of which is wages. Are salary negotiations, are collective discussions between unions and employees actually driving towards what many would fear, which is this second round effect that would then lead to inflation being sustainable for the medium term and at the level that maybe is not desirable because it is above target. But I think that we have, first of all, we're not seeing in the euro area in particular and in Europe in general, we're not seeing these wages, negotiations being way up, not yet at the moment, at least. And as a result of that, we are not seeing this sustainable movement that could lead to inflation spiraling out of control. On the contrary, we assume, and again, less than our humility here, there is a lot of uncertainty about it. But we assume for the moment that energy prices will stabilize in the course of 22, that those bottlenecks and those congested ports and drivers missing in action and all the rest of it will also stabilize in the course of 22 and that gradually those inflation numbers will decline. Now, it doesn't mean to say that we have to be open to any change to this inflation outlook. And I'm looking at the numbers that we have since a month ago. We will be having new projections in a couple of months that might look different. And at that point, I will have to look at my roadmap and we have agreed within the euro area, a roadmap that is called forward guidance. And I have to look at whether my three criterias of inflation at target 2% at the end of the projection horizon, which is three years, midpoint and currently sufficiently strong to actually be consistent with inflation being sustainable at 2%. If and when those three criterias are satisfied, then of course we need to act. And we have, by the way, we have actually started because we are now scheduling the end of our exceptional program at the end of March. We are phasing out our net asset purchases in significant volumes, moving from 80 down to 20 billion per month over the course of 22. And we know exactly in which sequence we need to move. And it's once we have completed our net asset purchases, then we will look at other tools in the toolbox, including interest rate hives. I think when you spoke to French radio on Thursday, you said, we have every reason not to act as rapidly and as brutally that one can imagine the Fed would do. I just wanted to ask you, as you see the markets trying to reprice European sovereign paper and you obviously see the reaction that we had in the euro from the news that the council was split, how do you convince the markets that you are going slower for longer because they seem to be trying to hustle you into acting? Well, again, I think that we have to be data-dependent, state-dependent, patient, and we have to conduct the right analysis. And what do we look at? We look at two different markets. When I look, for instance, at demand, which is clearly a major factor on which monetary policy can have some impact. Our demand in Europe is not a state of excessive demand as compared with the US, which is 30% above pre-pandemic levels. We are just about at pre-pandemic level here in Europe. When I look at the labor market, we are not experiencing anything like the great resignation and our employment participation numbers are getting very close to the pre-pandemic level. So I think if only those two factors, if you look at them carefully, are clearly indicating that we're not moving at the same speed and we are unlikely to experience the same kind of inflation increases that the US market has faced. I remind you that core inflation in the US is at 5.5% when it is at 2.6% in the euro area. And as I said, we have forward guidance, which is pretty, it's a complicated one, granted, but it is pretty solid. We know what to look at when to combine the three and we will act. There's no question in my mind that once the criterias are satisfied, we will. But at the moment, they're not satisfied. If I might just quickly follow up, we've just seen a euro group meeting where they've been discussing adjustments to the fiscal rules in Europe. Do you fear that if there is a relaxation of the growth and stability pact, that will push the ECB into a corner where you can't act on the basis of the data? You have to ultimately prop up countries like Italy and others in the euro zone that maybe have weak sovereign debt profiles. You know, I think the discussion that has now begun and I was at that euro group meeting and the subsequent ecofin meeting which brings together 27 finance ministers. The discussion has just begun. And in my view, what will be critical and will be scrutinized by markets is how much consensus is there and how effective will the rules be that are decided ultimately by the leaders, I suppose, upon proposal of the finance ministers. And if there is an agreement about a deal that will provide for simple criterias for efficient rules that will be counter cyclical in its impact. And hopefully we'll be associated with something that will not be the next generation EU, but some sort of fiscal capacity that is common to all euro area and possibly all European countries to respond to a crisis collectively, which has served all of us so well in the crisis. I think that that would be a very positive sign as far as markets are concerned. When I look at how welcome the bond issuance by the commission has been on this common, I will not call it European bond because it is not, but it is a joint issuance of significant magnitude. There is appetite there to see a region that is stronger and more united in its response from not just something monetary point of view but fiscal point of view. Governor Corroda, if I could bring you in. Some in the market are surprised that we're talking about a terminal interest rate from the United States of as low as 1.8%. I wonder if you can share with us maybe Japan's experience. Have we misunderstood something in the West? Is it actually high levels of debt and leverage that will weaken the recovery this year and not actually higher policy rates? So we also condemn to have low policy rates now in the West going forward. Maybe first, I'd like to mention about the COVID situation in Japan. In the last two years, about two million people have been infected and about 18,000 have died. This death rate per population is approximately 1.15 of that in the United States and Europe. So Japan's response to the pandemic so far has been relatively successful. However, the pandemic has had a significant negative impact on the Japanese economy. Japan's GDP for fiscal 2020 declined by 4.5%. And in the first half of fiscal 2021, it also declined at the annualized rate of 0.7%. So this decline was driven by the combination of weak consumption of phase trade services and so on and so forth. And also decrease in export and production reflecting supply chain disruptions in Southeast Asia. Nevertheless, the unemployment rate will remain at a low level of around 3%. Even during the worst period of the pandemic. So since the second half of the fiscal 2021, Japan's economy has improved significantly. Of course, in the short run, Japan's economy may again come under strong downward pressure due to the Omicron variant. However, we released this week the forecast for Japan's GDP for fiscal 2021 being 2.8% positive and next fiscal year, positive 3.8%. But federal inflation rate is still only 0.5%. And this is of course much lower than the 7% in the US and 5% in Europe. Why three factors? One, the increase in demand due to the reopening of economy has been somewhat lagged in Japan compared to US and Europe. And second, Japan has maintained sufficient supply capacity to meet the recovery in demand as firms have ordered workers even after the outbreak of the pandemic. And also third, firms' cautious mindset that has taken hold due to the experience of deflation from 1998 through 2013 has been exerting still somewhat. But that said, recently firms' price setting behavior has shown signs of becoming active. And so we are paying close attention to this. Now, you mentioned debt in Japan. If you look at the figures, you can find that the really big debt is really in the public sector. And the private sector, household as well as corporations, they have relatively small size of debt. So as far as the debt overhang or debt in Japan is concerned, I mean, I don't think there's any negative impact on the economy through the corporate sector and the household sector. The problem is only the public sector. Public sector debt is now well over 200% of GDP. So that the government maintains that they would achieve primary surplus by 2025. And thereafter, public debt due ratio should be gradually declined. That is the government position. But anyway, in this situation, the Bank of Japan's very accommodative, easy monetary policy has been working in some sense quite well, because after a long deflation period of 15 years from 1990 through 2013, because of our very simulative, expansionary accommodative monetary policy, the economy started to grow. And although inflation rate is still 0.5%, but in the last 80 years or so, inflation rate fluctuates around 1% compared with negative in the 15 years until 2013. And the corporate sector increased profit substantially and the corporate sector also made substantial fix investment in the last eight years. And if you check the figures among G7 countries, really not per capita income, but per working-age population, Japan's growth rate is fairly high, even the highest in the G7 countries. So I think the extremely accommodative, simulative monetary policy worked quite well to reinvigorate the economy, but inflation rate still far less than the 2% target. So that means that unlike in the US or Europe, we have to continue our extremely accommodative, easy monetary policy for the time being because we expect the inflation rate in fiscal 2022 as well as 23 being around 1% still. So we will continue our low interest rate, the expansionary monetary policy for the time being until we achieve 2% inflation. This is completely different in the US and European situation. So we are not afraid of inflation because the inflation rate is so low. But we are determined to achieve the 2% inflation target as soon as possible. Governor, Prime Minister Koshida has prepared another enormous budget for Japan. My question as it relates to that really is, does not that give you some room to maneuver on taking back some of this easy policy because this fiscal stimulus will be quite strong into the Japanese economy this year or is the problem that Japanese citizens have now a deflationary mindset and this money is just gonna find its way into savings accounts rather than being spent as the stimulus has been spent in the United States and in Europe, but the Japanese will save it rather than spending. I think you have to differentiate from fiscal 2022 budget from the supplementary budget for the fiscal 2021. Recently the parliament approved the supplementary budget for the fiscal 2021, which included many kinds of income support for families and so on and so forth. So as far as that part is concerned, as you said, some of them may be just deposited. Instead of spent and so on and so forth. That you may say. On the other hand, fiscal 2022 budget now proposed to the diet include various kinds of fiscal investment on technological research, infrastructure investment particular IT related and so on and so forth, which are basically spent by the government. So as far as the 2022 budget is concerned, once approved by the parliament, then would be spent and would be very stimulating. So as I said, we expect the growth in fiscal 2022 be 3.8% which is far higher than the potential growth rate of about 1%. So we expect this high growth in coming fiscal year to be very much affected by estimated fiscal policy. That is helpful for the economy. But at the same time, as I said, even given this fairly large fiscal stimulus measures and even with 3.8% growth in fiscal 2022, inflation rate, we expect about 1%. So that means that we will continue our expansionary monetary policy unlike in other disabled countries. Thank you, Governor. Minister Srimalyani, Indonesia has both reduced its government deficit and grown 4% in 2021, while as we've heard, many other countries have struggled. But Indonesia has, if I could suggest, managed to achieve that because it's been a big beneficiary of the commodity-related inflation. Can I ask, can you continue to do that in 2022 if commodities have been reduced if commodity price inflation falls? Well, thank you so much. The 2021, as I also hear from Kristalina and Christine, it is exceptional year when the commodity boom as a result of a very fast recovery also on the energy side. As well as in this case, we also see quite strong recovery in the Indonesia economy. If we look at the revenue side, one part is of cost commodity, but this is only explaining around 10% to 15%. It's really depend on tax and non-tax revenue. So basically the surge of the revenue is contributed by a very strong demand-driven recovery, which is, I think it's really a very encouraging. Given the fact that 2021, we also actually affected severely by the Delta variant. That is on the third quarter last year, when we locked down or in this case, have imposing a severe restriction movement, I was actually quite worried that it will decline very sharply the recovery process, which is still at the very early stage for Indonesia. But we saw that the overall growth in third quarter is still at 3.7%, but the underlying revenue from our tax was still extremely, extremely strong. What is also interesting from the revenue, especially from tax in Indonesia, the Profile 2021, as opposed to what you just described, it is contributed significantly by the commodity. But what is actually the underlying data showing that manufacturing and trade sector are the two most important contributor to our tax revenue. So it's definitely also a story of recovery and rebound on the economy. So that is one thing that we also have to look in a very more detail, how does it mean for us in 2022? From the budget point of view, because of our target for 2022 was based on the baseline 2021, which is, if you compare with the achievement, revenue on a tax, customs, exercise, as well as non-tax revenue, they are all way above our target. While the 2022 target for our revenue, which is around 105% for the taxation, while others is around 110% from our target, meaning the target for 2022 will definitely much easier to achieve because it was calculated based on the baseline, which is below the achievement in 2021. Even if the commodity, as I listened very carefully from Christine as well as Kristalina, if the commodity is going to be normalized, then we are still having a strong source of revenue which is coming from the non-commodity activity. As I mentioned earlier, manufacturing, trade, as well as information technology. And of course, if the COVID is going to be managed well and we are transforming into a more enemy situation, then all sector, for example, like transportation, construction, real estate, as well as hospitality, like restaurant, food, it's going to be also recovered very strongly. So I'm more optimistic that the 2022 revenue will still continue strong. In addition to that, we also have already reformed on a legislation point of view. I've already passed three law actually during this COVID. First, the emergency law in which we are putting a very strict discipline, only three years to allow us to have to receive above 3%. That is a very strict jacket for Indonesia. We are very, at that time, was actually seen by many of the rating agency. Are you sure, Srimoyani, you are going to be able to come back to the below 3% within three years? Now I'm more confident than last year, of course. But also we passed another two law that is on harmonizing tax legislation as well as on the job creation, which also including on a taxation. These are all very important legislation reform for the taxation because it's not only addressing the weaknesses. For example, like addressing the issue of tax avoidance, tax evasion, loophole. But also we are addressing the issue, for example, like the digitalization and the digital economy, which is growing very fast in Indonesia. So we are going to have a much wider basis for our tax revenue. We also increase our VAT, which is starting next April. We are stopping the declining of the corporate income tax that's supposed to be declined into 20%. We put it a break at the 22%. We also, as I mentioned earlier, filling the loophole on compliance. So these are all is going to be quite a strong. At least we are expecting 1% of GDP additional revenue from this reform. This is not to add the recovery, strong recovery, which we are witnessing last year and we will hope that it will continue for this year. So that is going to be like the cushion for our fiscal, especially on the revenue side. But on the spending, we also very disciplined in this case. Go ahead. Minister, let me just follow up, though. Is the resource nationalism that the president is pursuing going to distort pricing in the commodity markets and cause further inflationary pressure? And is it appropriate in a year of recovery for the global economy? Well, it is not nationalism. If you look at the Indonesia economic history, these are all a Christian, Kristalina, Kurodasan knows very well. Indonesia has been independent for 76 years. And if you look at the structure of our economy, I think we have quite a lot of what you call it holo-middle. We have a very strong commodity base as an upstream but no value added has been created in our economy. It can be blamed from many different excuses. What you call it, investment climate, policy certainty, sensitivity of contract and all those things. So when Indonesia addressing the structural issue, I think I remember Kristalina, we say reform now. Christine, when she was in the IMF, do it when the weather is good. So you actually fix your roof when the weather is good. We are doing exactly that. And that is exactly what we are doing is structural reform in order for us to be able to create more, what you call it downstream industry. Because Indonesia is a big country. We are the biggest economy in ASEAN. You cannot allow this economy to just depend on commodity without value added. And then we have downstream industry, we just live in time sea. That's creating a widening gap as well as non, what you call it, a strong structure of the economy. We are very vulnerable. You still remember when we have tapered time from 2013, it was identified because Indonesia have a current account deficit. The current account deficit is because every time we grow by 1% higher, then we are going to suffer for more current account deficit. It creates vulnerability. You cannot run fast enough. So this kind of reform and policy, which is implemented under President Jokowi leadership, should not be seen as a nationalism because we are opening up our investment. It is not that the nationalism, as you say, is that this is supposed to be for us only, this is only for the state-owned enterprise. No, we are open. Please come and invest. Do it here. We are improving our investment climate. And so the value added creation with the competitiveness will create a much stronger and better competitiveness and stronger structure for Indonesia. So that is really because we also see a lot of what you call it policy recommendation and assessment about Indonesia. And we actually act accordingly. And that is exactly what we are trying to do at this very moment. On all commodity. You talk about nickel, you talk about boxed, you talk about copper. We are talking about oil refinery. I think it's just right for Indonesia with the size of the economy. Minister, thank you so much. I'm sure Minister Geddes would also like people to come to Brazil if they're trying to figure out where to head this year. But let me ask you, Minister Geddes, Brazil responded early to inflation. You started a hiking cycle in March last year. How is the government trying to offset the impact on growth? Well, Jeff, I think the two points before I go to this point, I would like to make a brief comment. On two very important points that were raised by Cristalina and Christine Lagarde. If Cristalina and Christine remember, we met at Davao in 2019. And the diagnosis was clear that the world was in synchronized deceleration. So the world was landing, landing, trying a soft landing. And then at that point I said, listen, Brazil is out of sync with the rest of the world. We are just taking off. As a matter of fact, we could not beat the revenues of the first quarter of 2020 yet. Even now this year that we bounce it back strongly and we are above the level of output that we were before the pandemic hit us. So it was a very important point that Cristalina made there. And she made it now another very important point judgment which is there will be an enormous divergence in economic policies now. The case of Japan is quite clear. They are in the opposite position of the US, for instance. The US has to raise interest rates and then Japan is saying that it will keep easing monetary policy because it's a huge savings country, a huge savings glut that they have. So I would have mentioned that this is very important that Ms. Cristalina said. Very asymmetric policies and very different policies specific to the country. And she also mentioned that the adverse supply shocks were common to everybody. So we had a 2020 very common. Everybody suffered adverse supply shocks and food and energy related also to climate change and all that. And then she said also that all of us answered commonly with expansionary monetary and fiscal policy. And then begins the difference with Brazil. Brazil is probably the only country, only country that is exactly where it was before the crisis. Our debt-GDP ratio, people were forecasting 100% moving from 75% to 100% or 76% to 100% our debt-GDP ratio. Well, because we kept pursuing our structural reforms in 2021, our debt-GDP ratio is just 80%. So 20% last on the forecast. Even the IMF came to Brazil and projected forecast a drop of 9.4% in GDP. We dropped with 3.9% only. A lot of people were very skeptical about Brazil bouncing back and then we escaped from the bottom creating 4 million new jobs, 3 million new formal jobs just this year of 2021. Last year, 21. We preserved 11 million jobs in the formal market. We assisted 68 million Brazilians with direct income transfers, non-orthodox, direct income transfers, we digitalized them. Well, we won in the World Bank ranking the first place in Americas before the US and before Canada as the digital government. Our digital government serves 120 million people that use public service digitally. So we made income transfers to 68 million people digitally every month. So there is a big underestimation of, I remember I told our friends in 2019 that they should not underestimate resilience, our democracy and our economy. So the first point that she made, I fully agree, very important is we must keep our eyes on the specifics of each country from now on. The common shocks are there but the answers were different and we have asymmetric situations. We vaccinated 95% of our adult population. Two shots, 70% of our whole population. So we are practicing now a safe return to work. That's why GDP bounced back very strongly. Of course, Omicron is still around, infecting people, looks like it is a little less severe but we are ready with the protocol. Shoot the crisis, the health crisis, either way, we are ready to shoot again. All our programs were very successful, the job preservation, the credit programs, the direct income transfers. So we are ready to mass vaccinate third, fourth, 50 doses as long as you keep producing it, we will be producing it here in Brazil also. We already had agreements with the British and the Americans, Pfizer, to produce locally. So we'll be producing locally and exporting to our neighbors. And the second very important point before I go to Brazil was made by Christine Lagarde. Christine Lagarde, when she said that she kept her eyes, she's keeping her eyes on the labor market. And then I submit to your consideration. That's why I went back to 2019 because we had a synchronized deceleration, then we were hit by COVID. We answered correspondingly and we then got a very successful avoidance of a great depression. So the coordination was very fundamental. But now we are back to that situation of synchronized deceleration and the advanced economies with another problem now, which is inflation. So we are back to deceleration. It's not surprise to me that they will keep reviewing downwards your growth forecast because inflation is there. And now the question is how transitory, how permanent are the factors? This adverse supply shocks in one side and this expansionary demand in the other side. Brazil is probably the only country that removed already. We took advantage of the V-shaped recovery instead of growing five and a half or six last year. We are growing four and a half or five because we removed as soon as the economy bounced back and got power. We removed instantaneously the fiscal and the monetary. So our central bank is now three or 4% real interest rates. And on the fiscal side, we were spending 19% of GDP, public expenditures as a ratio of GDP, federal government. We went to 26 and a half in 2010, in 2020 as a response to the crisis. Well, we finished 2021 with 19% again. So all our expenditures were for health. We did not let temporary expenditures with the health problem to become permanent expenditures with the public machine. So expenditures went from 19% to 26 and a half and then bounced back to 19% exactly where they are now. Same thing with the deficit. The deficit came from 1% of GDP to 10 and a half and we finished this year with a small surplus, surplus, consolidated surplus. So it is a very asymmetric situation. We instead of growing five, five and a half or six, we took advantage of the recovery to remove gradually the monetary and the fiscal. So we have room, we have fiscal and monetary space to react through the third wave or a fourth wave come. And just to finalize the comment on Mr. Lagarde because I think observation that wages are still under control and this might be an asymmetric position with respect to the US. I want to remember you all that for 30 or 40 years we took advantage of the globalization to rise on inflation. Inflation was muted by the factor price, Stoper-Samuelson factor price equalization theorem. 3.7 billion Eurasians got out of poverty jumping into the global labor markets. So there was an enormous and increasing discomfort in the Western world because wages couldn't go higher. Inflation was muted and wages were going higher. And 3.7 people in India and Indonesia and Russia and South Vietnam and South Korea getting out of poverty. What Japan did in the 50s and the 60s, all Asia practicing in the last 30 to 40 years. So we Western side didn't have inflation but now my fear is that the beast is out of the bubble. So I don't think inflation will be transitory at all. I think these supply adverse shocks will fade away gradually but there's no arbitrage anymore to be exploited by the Western side. So I think the central banks are sleeping at the driver wheel. They should be aware. And I think inflation will be a problem, a real problem very soon for the Western world. Brazil because we have very tragic previous experiences with inflation we move it faster. Minister, thank you very much for that. And I think it's interesting to see that not everybody is on the same page on this question of whether inflation will be transitory. And I thought for a moment there you were offering up an olive branch to the managing director. But as I understand it, you're still intending that the IMF closes their desk in the middle of the year. But we'll see what happens. We love each other. We love each other. Let me, we only have about five minutes left unfortunately and there are so many topics we haven't touched upon but I think the one story really that affects everybody at the moment is what happens in the world's second largest economy. So managing director, might I just come back to you as we close out this panel and say, is it really not time now that China stepped away from its zero COVID policy and perhaps you can explain a face saving way that the leadership might be able to do that. But China is slowing down and it is a concern for China. It is a concern for the rest of the world. And this slow down is due to two things. One is the interruptions that are caused by COVID and zero COVID policy means that if there is any outburst it has to be put down with all the impact coming from it. It is also due to the fact that consumption is not picking up as much as it was expected. So for now China is using zero COVID but what Omicron is teaching all of us is that a highly transmittable variant of COVID may be much more difficult to contain without a dramatic impact on the economy. And our view is that this has to be taken into account. And therefore we will see how China integrates this message both in terms of the policy they apply but also in terms of how they advance on the direction of what are the vaccines that are most effective and how that would be integrated in China's action. China does have policy space. We actually are on the view that perhaps it was a bit premature to withdraw policy support that it should have been retained a bit longer. We are seeing people's Bank of China doing something to ease conditions and we might see more of it. So China performs its function for itself but also as a factor of growth for the rest of the world. So the zero COVID policy was a mistake? Well, the zero COVID policy for quite some time did contain infections in China. It is now that we see with a highly transmittable variant that this contagion effect cannot be achieved easily and the restrictions that need to be imposed are more of a burden to the economy but put more at risk not only China but also China as a supply source for the rest of the world. And it is at this time that it is important to reassess what is the best way to deal with the pandemic. We don't know what the future would bring for all of us. One thing we know is that pandemic policy remains a top economic policy in 2022. Unless we build protections around the globe we are going to continue to see disruptions and the future would not be as bright as we want it to be. So my main message here is to all of us to recognize that the world must spend the billions necessary to contain COVID in order to gain trillions in output as a result. Managing director, thank you so much for that final message. And unfortunately we are out of time now. So let me just thank our panelists, Kristalina Gorgieva, Minister Paulo Guedes, Minister Srimalyani Haruhiko Koroda, the governor of the Bank of Japan. And as always, Christine Lagarde, the president of the European Central Bank. Thank you all for being on this terrific panel on the global outlook. And thank you all for watching.