Kristalina Georgieva admits that the war in Ukraine violated the forecasts of the International Monetary Fund
The Director General of the International Monetary Fund (IMF) said on Thursday that the global economic situation, aggravated rising inflation “it will still get worse before it gets better”, acknowledging that the invasion of Ukraine undermined the organization’s predictions.
Speaking at Georgetown University in Washington DC, Kristalina Georgieva said he thought the situation would “get worse before it gets better”.
“Uncertainty is very high,” he said, highlighting the effects of the war, noting that the pandemic “hasn’t gone away yet” and adding that “the risks associated with financial stability are growing.”
The IMF’s director-general said the organization had again lowered its forecasts for the global economy in 2023, projecting four billion euros of lower economic growth through 2026.
Georgieva also revealed that the institution had already cut its global growth forecast three times and now expects 3.2% this year and 2.9% in 2023.
The IMF Director General said that the situation could be resolved by three priorities for the economies, calling, firstly, for measures to reduce inflation, preventing it from “fixing” at current levels. However, these efforts must be balanced, he said, because otherwise they could plunge “many countries into a protracted recession.”
“Central banks must continue to respond,” he said, “even if the economy slows down.”
The second priority, Georgieva said, includes fiscal measures that protect “the most vulnerable families and businesses,” warning that these measures must be “very targeted” and urging countries “not to subsidize the rich.” The IMF Director General also warned of the negative effects of universal price controls.
Finally, Georgieva stressed the importance of supporting emerging market and developing countries.