The Director General of the International Monetary Fund (IMF), Kristalina Georgieva, This Thursday he called on States and institutions to act in the face of the growing risk of recession in the world.
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It is essential to “stabilize the world economy by addressing the most immediate challenges”, including fighting inflationBut if central banks act too aggressively they could “plunge many economies into prolonged recession,” he warned days before the IMF releases its forecasts for next year, which he said will be on the downside.
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The IMF, in effect, will lower global growth prospects next week in the face of the uncertainty that exists at the international levelas announced this Thursday Georgieva.
In addition, the IMF assures that the risk of recession is increasing and that even when growth is positive, the feeling will be one of recession because of falling real incomes and rising prices.
In a speech at Georgetown University (USA), the head of the international financial entity assured that the global economy is experiencing a paradigm shift: from one in which predictability, cooperation, low inflation and low interest rates to a more fragile and highly uncertain one.
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According to Georgieva, this new global economy will also have to face increased volatility, geopolitical clashes, and more frequent and devastating weather disasters.
For all these reasons, the fund will lower the outlook for global growth by
her update next week – although Georgieva did not clarify what percentage. The organization estimates that a third of the world economy will experience at least two consecutive quarters of contraction this year or next, which is considered a technical recession.
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Stabilize the global economy by addressing the most immediate challenges
The last projection published by the IMF in the spring of this year was that in 2023 the world economy will grow by 2.9%.
The Bulgarian economist also referred to increased financial stability risks caused by rapid price fluctuations, high levels of sovereign debt and concerns about lack of liquidity in key segments of the financial market.
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To try to stabilize the economy, the IMF proposed to politicians and authorities around the world to maintain the fight against inflationpursue “responsible” fiscal policy that protects the vulnerable, and join forces to help emerging markets and developing economies.
INTERNATIONAL WRITING
* With information from AFP and EFE
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