The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, warned during a press conference on Wednesday that nations must "prepare for difficult times" if oil prices remain elevated due to the ongoing war in the Middle East.
اضافة اعلان
"We must prepare for a difficult period" if the conflict persists and oil prices stay high, Georgieva stated, emphasizing that "all countries are affected, even if the impact of the shock is not uniform" across them.
Urgent Energy and Fiscal Measures
During the IMF and World Bank Annual Meetings in Washington, Georgieva urged countries to take immediate action:
Energy Consumption: Nations should implement measures to reduce energy-intensive activities. "They should do so now, rather than waiting several weeks," she added.
Public Spending: The IMF head called on states to avoid significant expenditures at a time when global debt has reached its highest levels since World War II.
Global Debt Projections
According to the "Fiscal Monitor" report published by the IMF on Wednesday:
Global debt reached 94% of global GDP last year.
Projections suggest it could hit 100% by 2029 if no corrective measures are taken.
Critique of Temporary Fixes
Georgieva criticized certain measures some countries might adopt, such as "export controls or poorly designed tax cuts." While acknowledging that "the intentions are good," she warned that protecting citizens through such measures would only prolong the hardships associated with high prices.
Monetary Policy and Aid Requests
Central Banks: Georgieva advised central banks to remain cautious and "monitor how the situation evolves" before making decisions on key interest rates, particularly if inflation expectations remain high.
Emergency Assistance: While the IMF already had 40 active programs before the war, it has recently received "about 12 requests" for new assistance programs, some of which are from Sub-Saharan Africa.
"These countries need our attention," Georgieva concluded, noting that a primary focus of this week's discussions is how to best provide aid in a world characterized by "frequent shocks and deep uncertainty."
Source: AFP
