Dimming prospects of tax reform in the U.S. The economic crisis in Venezuela. Persistent nuclear threats from North Korea.
These are just some of the monumental challenges facing global finance ministers and central bankers as they gather in Washington this week for the annual meetings of the International Monetary Fund and the World Bank.
Here’s a look at four of the key issues likely to be on the agenda:
A big question heading into this week’s meetings: Can the Trump administration deliver on its promise to overhaul the U.S. tax system by the end of this year?
The administration has been betting that tax reform, along with regulatory relief and renegotiated trade agreements, will help spur U.S. economic growth. A windfall, they argue, that could provide benefits to economies worldwide.
In April, the IMF predicted a boost to the U.S. economy in anticipation of the tax cuts.
But now there are signs of skepticism.
On Tuesday, economists at the IMF left the U.S. economic growth forecast unchanged, citing “significant policy uncertainty.”
“The IMF is not really the one to be rating the odds for [tax reform],” a senior Treasury official told reporters on a call Wednesday. “It’s a work in progress.”
The White House revealed a blueprint of its plan on Sept. 27, but it lacked many critical details that congressional tax-writers will now have to agree upon as they draft legislation.
All eyes were on President Trump Wednesday night when he made his latest tax reform pitch in Pennsylvania.
With persistent threats of a nuclear crisis on the Korean peninsula, global security will be “a big focus” when Treasury Secretary Steven Mnuchin and David Malpass, his undersecretary for international affairs, meet with top finance chiefs later this week, the Treasury official said.
Items on the agenda include U.S. sanctions against Iran, Venezuela, Russia and North Korea. A schedule of 16 planned bilateral meetings has yet to be released by the Treasury Department.
The Trump administration is seeking cooperation with China, and other foreign partners, to exert maximum pressure on North Korea to disband its nuclear weapons program.
In September, a week after North Korea carried out its sixth and largest nuclear test, the United Nations Security Council unanimously adopted a U.S.-draft resolution to impose new sanctions on the rogue nation.
Venezuela’s economy is spiraling out of control, with rampant inflation causing severe shortages of food and medicine for the nation’s 30 million citizens.
The Trump administration has already issued sanctions against President Nicolas Maduro and his associates, after they moved to consolidate power and silence the opposition in July. President Trump also barred banks from buying Venezuelan state bonds.
Maduro has said the sanctions have exacerbated the crisis.
The IMF on Tuesday forecasted that Venezuela’s triple-digit annual inflation rate is set to jump to more than 2,300% in 2018.
“Our goals have been clear: We want a better life for the Venezuelan people,” said the senior Treasury official on the call. He did not outline any further steps the U.S. may propose.
World Bank spending
Two years ago, a goal was set for member countries to agree upon a capital increase for the main lending arm of the World Bank. But the Trump administration is likely to derail that effort this week.
The majority of the bank’s 189 member countries support the capital increase for the World Bank’s main lending arm. But the U.S. — the bank’s largest shareholder — could veto the decision.
One of the key messages the U.S. plans to send this week is that both the IMF and World Bank should more effectively use their resources, said the senior Treasury official. That includes mobilizing the private sector to make investments around the world.
The Trump administration plans to ask the World Bank to review its balance sheet and rethink its lending.
World Bank President Jim Yong Kim has said the institution is focused on drawing in “more private capital, but there is no way to do that without us having more capital ourselves.”
-CNNMoney’s Patrick Gillespie, Jeanne Sahadi and Ivana Kottasova contributed to this report.
CNNMoney (Washington) First published October 12, 2017: 12:01 AM ET