IMF chief warns of ‘potential confluence of calamities’ regarding global economy
Rising inflation powered by monetary policy tightening has exerted more pressure on the economy
• Rising inflation powered by monetary policy tightening has exerted more pressure on the economy
IMF managing director, Kristalina Georgieva said the global economy faces its “biggest test since the Second World War” with a combination of the Russia-Ukraine war, the COVID-19 pandemic, the volatility of global financial markets, and persistent threat from climate change.
In a blog post ahead of this week’s World Economic Forum, the IMF chief said that the world faces a “potential confluence of calamities” as spiraling food and energy prices are squeezing households around the world, while central banks are tightening monetary policy to rein in inflation.
“Yet our ability to respond is hampered by another consequence of the war in Ukraine—the sharply increased risk of geoeconomic fragmentation,” Georgieva said.
“Tensions over trade, technology standards, and security have been growing for many years, undermining growth—and trust in the current global economic system,” she added.
Georgieva warned that further disintegration would have enormous global costs, harming people across the socio-economic spectrum, and said technological fragmentation alone could lead to losses of 5% of GDP for many countries.
Source: IMF
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