(Finance) – The director of the International Monetary Fund, Kristalina Georgieva, he stated that “at this stage we see that the risk of abandoning the fight against inflation should be viewed with caution, as inflation has proved to be more persistent than expected”. As for tensions who have invested some banks in recent weeks, Gerogieva has stressed that “this is not 2008”. “It’s not because in 2008 the reason for the crisis was in securities portfolios full of inappropriate tools that they don’t have today. Today – he underlined at an event to present the spring meetings with the World Bank – the banking system is much cleaner. This does not mean that there are no vulnerabilities that need to be monitored.”
The global economy has embarked on the five-year period of growth lowest for thirty years now, while one recovery more solid “escapes” with the growing risks due to geopolitical tensions and the persistence of high inflation. “This damages the prospects of everyone, especially the most vulnerable countries and people,” said the director of the International Monetary Fund.
Georgieva anticipated some data from the updates on the forecasts of World Economic Outlook, reporting that the IMF now forecasts global growth “below 3% this year” and “around 3% over the next five years: our lowest medium-term forecast since 1990,” he said. “There growth remains weak from the point of view of historical precedents, both in the short and medium term after more than halving in 2022″, from 6.1% in 2021, the rebound following the collapse caused by lockdown and restrictions imposed by governments due to Covid, at 3.4% in 2022.
According to Georgieva they loom marked differences between economies, with some loss of momentum on growth of emerging countries against which “about 90% of advanced economies are expected to slow down this year”. LDCs are expected to grow by per capita income lower than that of the emerging economies “and this makes it even more difficult to bridge the gaps”, he added.
The first obstacle listed on the road to the global economy is represented by the fight against inflation and the safeguarding of financial stability. “As long as limited financial pressures persist we expect the Central banks stay the course on fighting inflation. At the same time, where risks to financial stability emerge, they must intervene with appropriate liquidity supplies”. “La key issue – he added – is to closely monitor the risks in banks and non-bank financial institutions, as well as weaknesses in sectors such as real estate”.
Second director of International Monetary Fund need to strengthen productivity and the potential for economies to expand, while at the same time moving ongreen economy. On this last aspect, he reported that the IMF estimates that 1,000 billion dollars a year would be needed just for the renewable energy sector. “These expenses – he argued – would be repaid in terms of growth and employment dividends”.