The managing director of the International Monetary Fund (IMP), Kristalina Georgieva, said Thursday that, in the current context marked by the commercial war initiated by the US government, the next economic projections of the agency “will include notable reductions” in terms of growth, “but not recession.”
In his speech prior to spring meetings of the IMP and the World Bank Group (BM) that are held next week in Washington, Georgieva also announced that the agency’s perspective report that directs and will be published on Tuesday will show “increases in inflation forecasts for some countries” due to tariff disputes.
“The volatility of Financial markets It has increased. And the uncertainty about commercial policy is huge, “warned the Bulgarian economist at the start of her speech, in which he stressed that global resilience” is being tested again with the reconfiguration of the world commercial system. “
“To a large extent, what we are observing is the result of an erosion of trust: confidence in The international system And the confidence between countries, “Georgieva said regarding the negative and inequality perception that globalization has left in different countries and strata.
The need for states to put self -sufficiencyespecially as far as industrial and manufacturing sectors are responsible, it is resurfaceing supported by growing concerns on national security.
Georgieva indicated that “the short response” with respect to the consequences of these developments is that “they are significant” and listed several, starting with the fact that “the more uncertainty persists” with respect to the erratic offensive tariffs activated by Washington “the greater the cost” for Economieswith expensive delays in decisions that concern, for example, investment.
Undermine growth
The managing director also wanted to remember that, being barriers to tradetariffs tend to undermine growth, and pointed out that “it takes time” to get the processes of business relocation, one of the goals that Donald Trump’s government has said that he pursues with his commercial war.
“Erosion protectionism productivity In the long term, especially in smaller economies, “Georgieva added, which warned of the collateral risk that many markets end up flooded with goods from diverted commercial flows because of the strap between powers, as it is feared that it can happen with Chinese imports.
- With regard to its recommendations to face the current situation, the economist warned of the starting one that “Economies They face the new challenges from a weaker initial position, with a public debt load much greater than that of just a few years ago. “
Therefore, most should “take fiscal measures Decisive to rebuild his margin of maneuver “, and in the case of those with” unsustainable “liabilities it would be recommended in some cases to” make the difficult decision to opt for a debt restructuring. “
He also recommended emerging economies to preserve “the flexibility of exchange rates As a shock absorber “and, in general, he considered that states” should focus again on internal and external macroeconomic imbalances. “
For practical purposes, Georgieva brought together recommendations for the three major world economies and placed China’s priority in the need to promote and revive its weakened private consumption, while emphasizing the need to progressively reduce US public debt.
In the case of the European Union (EU), the list of priorities was somewhat broader: “Europe needs a bank union. Europe needs a union of the capital market. And Europe needs less restrictions on internal services,” he said. EFE
