Demographics, AI and climate force shift in policy frameworks
Structural shifts across demographics, climate and artificial intelligence demand institutional agility anchored in enduring economic principles, according to the Bank of Mauritius at the SSIRC 2026 conference.
Three pillars meet four structural shifts
Economic policy rests on three enduring foundations: binding budget constraints across households and governments, human responses to incentives such as inflation expectations, and robust institutional design.
However, four structural forces are altering these dynamics.
In Mauritius, where the population reached 1.24 million in 2024, demographics project a 30 percent decline by 2070.
Concurrently, climate change alters agricultural yields and food prices, while the green transition could yield up to 32,000 jobs by 2030 according to the World Bank.
Alongside geopolitical fragmentation, rapid advancements in artificial intelligence are reshaping labor markets and productivity at accelerating speeds.
Navigating uncertainty through scenario agility
To navigate these challenges, policymakers are urged to prepare for a range of plausible scenarios rather than optimize around a single forecast.
Managing baseline macroeconomic stability, price stability and fiscal sustainability remains essential.
At the same time, central banks must cultivate agility and institutional flexibility.
As highlighted in the address, “conviction and humility are not opposing virtues” when anchoring decisions in established principles while confronting unpredictable disruptions.
Sound philosophy, scarce operational detail
The keynote delivers a timely defense of fiscal and monetary orthodoxy against technocratic overconfidence.
Yet advocating agility without detailing concrete operational trade-offs offers limited practical guidance.
Philosophical balance cannot replace explicit policy frameworks when structural shocks hit.
Source: Economic policymaking in a changing world
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