IMF, recession and financial stability risks increase

"The risks of recession are increasing", as are those of financial stability.

This was stated by the director general of the IMF Kristalina Georgieva, announcing a cut in growth estimates for next year in the World Economic Outlook that will be released next week.

"We are experiencing a fundamental shift in the global economy: from a relatively predictable world to a more fragile world with greater uncertainty, higher economic volatility and more frequent environmental disasters," highlights Georgieva.

"We estimate that about a third of the world economy will experience at least two consecutive quarters of contraction this year or next. And even in the case of positive growth, the feeling will be that of recession due to falling real incomes and rising income. prices ", says Georgieva, underlining that the IMF expects losses in terms of GDP of about 4 trillion dollars between now and 2026, or as much as the economy of Germany in" what is a strong setback for the world economy ".

"Uncertainty remains extremely high between the war and the pandemic. There could be further economic shocks. The risks to financial stability are increasing," she adds, pointing to three priorities for stabilizing the economy.

"One,

we must move forward to bring down inflation.

Two, it is necessary to implement a responsible fiscal policy, which protects the weak without fueling inflation.

Three, efforts must be made to support emerging and developing markets. "It is necessary to" bring down inflation "and" implement responsible fiscal policies, which protect the weak and do not fuel "the price rush. to stabilize the economy.

"While monetary policy is pulling on the brake, you shouldn't have a budget policy that is pushing on the accelerator," explains Georgieva, urging them to move forward in the battle against high prices.

"Inflation remains high and central banks must continue to act. In the current environment it is the right thing to do: act decisively even if this inevitably slows the economy. It is not easy and it is not painless in the short term but it is essential to avoid greater and more lasting pain for all, "says Georgieva, warning about the imminent cut in growth estimates by the IMF.

"We have lowered them three times already, to 2.3% for 2022 and 2.9% for 2023. And as you will see next week in the World Economic Outlook,

"One, we need to move forward to bring inflation down. Two, we need to implement a responsible fiscal policy, which protects the weak without fueling inflation. Three, efforts to support emerging and emerging markets must go out. of development".

"Our economy is like a ship in troubled waters. We need all the wisdom we can to stabilize the ship and navigate."

This was stated by the director general of the IMF Kristalina Georgieva, underlining that it is necessary to act to prevent this "period of fragility from becoming a dangerous 'new normal'".