Daily Management Review

IMF Chief Georgieva Says It Was 'Too Early To Say' If Global Economy Faces Long-Term Inflation


IMF Chief Georgieva Says It Was 'Too Early To Say' If Global Economy Faces Long-Term Inflation
The president of the International Monetary Fund has said it was "too early" to judge whether the global economy was in for a period of prolonged inflation but cautioned that failing to make economies more resilient to future economic shocks may result in major consequences.
Global policymakers must carefully balance their fiscal and monetary policies in 2022, according to IMF Managing Director Kristalina Georgieva, to ensure that the broad withdrawal of Covid-19 support funds and increasing interest rates do not damage the recovery.
Last week, the IMF lowered its economic predictions for the United States, China, and the global economy, citing increased risks from the pandemic, inflation, supply disruptions, and US monetary tightening.
Unlike 2020, the year when the pandemic first emerged and throughout the world, and when finance ministers and central bankers of countries collaborated and synchronized their activities, conditions in the current year and at the present time vary considerably all around the world. That has necessitated more "specificity" in reactions, she explained.
According to Georgieva, the Covid-19 pandemic remains the greatest threat to the global economy, and it is critical to increase vaccination rates in low-income nations in order to fulfill a worldwide goal of vaccinating 70% of people in countries throughout the world by mid-2022.
Due to supply chain disruptions, stronger-than-anticipated consumer demand for products, and climatic shocks on food prices, the IMF head said inflation had lasted longer and climbed higher than predicted.
When asked if such factors, as well as the rising conflict between Russia and the West over Ukraine, may usher in a period of prolonged inflation, Georgieva responded, "The quick answer is that it's too soon to tell. We can expect a world that is more prone to shocks."
She believes that investing more in people's resilience, the economy, and the environment today will help create more chances for employment development and prosperity in the future.
Failure to make such investments would result in a bleaker future, with "more unexpected occurrences for which we are not prepared," Georgieva warned, adding that governments were also unprepared to deal with multiple crises at once.