IDB Invest and IFC Discuss Macro Shock Impact on Development

Eusebio Garre, Director and Head of Funding at IDB Invest, and Yuri Kuroki, Head of Funding at IFC, addressed the significant impact of macroeconomic shocks on development finance and investment in essential sectors. Speaking at the 2026 Canadian Finance Conference, facilitated by Bloomberg's Olivia Raimonde, Garre and Kuroki detailed how current global economic conditions, characterized by persistent inflation, elevated interest rates, volatile energy prices, and a slowdown in global growth, are creating substantial challenges for investment in critical areas such as infrastructure, housing, and essential services. These shocks not only increase the cost of capital but also introduce greater uncertainty, making long-term project financing more precarious. Development finance institutions (DFIs) like IDB Invest and IFC play a crucial role in mitigating these effects and ensuring continued investment in sustainable development. They aim to mobilize private capital and provide long-term financing solutions that can withstand economic downturns. The discussion highlighted the need for innovative financial instruments and strategic partnerships to navigate the complex and evolving global economic landscape. Garre and Kuroki emphasized that DFIs are adapting their strategies to support projects that are resilient to climate change and economic volatility, recognizing that these factors are increasingly intertwined. The conversation underscored the importance of maintaining a focus on social impact, ensuring that investments continue to benefit vulnerable populations and contribute to inclusive growth, even amidst significant economic headwinds. The role of DFIs in providing counter-cyclical financing and technical assistance was also a key theme, as they work to bridge funding gaps and de-risk investments for private sector partners. The 2026 Canadian Finance Conference served as a platform for these leaders to share insights and strategies for fostering resilience and sustainable development in a challenging global economic environment. The institutions are committed to supporting developing economies through these turbulent times by leveraging their expertise and financial capacity to drive impactful projects forward. Their collective efforts aim to ensure that progress on sustainable development goals is not derailed by short-term economic fluctuations, focusing on long-term value creation and societal well-being.