IMF chief calls for global action in anticipation of possible deflation around the world

Washington-Sana

International Monetary Fund Managing Director Kristalina Georgieva called on countries and institutions to act together in the face of the growing risks of deflation around the world.

And Sky News quoted Georgieva as saying in a speech today in Washington that “countries and institutions must move together in the face of the growing risks of deflation all over the world, and with more will to move in order to face the risk of seeing a period of fragility become a new and dangerous normal. "There is an urgent need to stabilize the economy," she added.

The reason for the reduction in growth expectations is due to the multiplication of crises reinforced by the Ukrainian crisis, and the environmental disasters that struck several regions of the world during the summer and led to the destabilization of a global economy that was mainly affected by the “Covid-19” epidemic.

Georgieva pointed out that "the epidemic represented a fundamental shift for the global economy, as it moved from a relatively predictable world to a world prone to shocks and more uncertainty."

The IMF expected that a large number of countries will witness a decline in the gross domestic product over two consecutive quarters, which indicates a recession between the end of this year and the next.

This danger is expected to affect about a third of the global economy, in addition to the suffering of many families around the world from the high cost of living, according to Georgieva.

Georgieva said that "the uncertainty is very high in the context of war and the epidemic, and there may be other economic shocks," considering that "the most important priority is to prevent prices from continuing to rise and prevent inflation from entrenching."

Georgieva warned of the danger of the debt crisis spreading to all countries, noting that more than a quarter of emerging countries defaulted on their debts or are at difficult levels.

The G20 economic ministers are expected to meet in Washington, along with central bank governors, on the sidelines of the International Monetary Fund's annual meeting on Wednesday and Thursday.

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