Georgieva made evaluations on the global economy before the IMF-World Bank Spring Meetings that will start on April 18.
Stating that we are facing crisis after crisis, Georgieva said that first the epidemic turned people’s lives and economies upside down, and then Russia’s attack on Ukraine caused shock waves around the world.
Georgieva pointed out that the economic consequences of the war spread rapidly, noting that hundreds of millions of families are already struggling with lower incomes and higher energy and food prices, the war has made this worse and threatens to increase inequality even more. “For the first time in many years, inflation has become a clear and present danger for many countries around the world,” Georgieva said. said.
Decrease expectation in global economic growth
Emphasizing that inflation is a major setback for the global recovery, Georgieva said, “Economically, growth is falling and inflation is rising.” made its assessment.
Georgieva said bilateral crises such as epidemic and war and the ability to deal with them are further complicated by the risk of the world economy splitting into geopolitical blocs.
Pointing out that the global recovery had already lost momentum before the war, Georgieva said that the IMF cut its global growth forecast for 2022 to 4.4 percent in January, and the outlook has deteriorated significantly since then, largely due to the war and its repercussions. .
Georgieva said, “We will foresee further declines in global growth for both 2022 and 2023. Fortunately for most countries, growth will remain in positive territory. However, the impact of the war is 143 percent of global GDP this year, accounting for 86 percent. It will contribute to lowering the forecast for the economy.” she said.
“The outlook is extraordinarily uncertain”
Stating that high energy and food prices increase inflationary pressures, Georgieva said, “The outlook is extraordinarily uncertain, far beyond the normal range. War and sanctions may escalate. . New Covid-19 variants may emerge. Crops may fail.” said.
Georgieva pointed out that food insecurity is a serious concern and noted that a multilateral initiative should be taken to support food security.
Stating that food and energy prices continue to increase inflation along with supply chain problems, Georgieva said, “We expect inflation to stay higher for a longer period of time than previously anticipated.” said.
Pointing out that there is an increasing risk of inflation expectations not being fixed in a way that may make inflation more permanent and difficult to control, Georgieva noted that central banks should act decisively.
Ending the war urgent priority
Georgieva, “The immediate priorities are to end the war in Ukraine, confront the epidemic, fight inflation and debt.” said.
Pointing out that the threat from climate change is also getting worse, Georgieva said that the IMF Board approved the creation of a new Resilience and Sustainability Trust, which provides affordable long-term financing and accelerates private investment in macro-critical climate change. stressed that it would help address the challenges.
Georgieva, also referring to the digital revolution, “The digital revolution includes unlocking the potential of innovations such as central bank digital currencies and strengthening the regulatory framework around cryptoassets.” said.