- Says $1trn required annually to boost growth
BY FESTUS OKOROMADU, ABUJA
The Managing Director of the International Monetary Fund, Kristalina Georgieva, has warned of the economic threat posed by the continued rise of inflation figures in many countries around the globe.
Georgieva stated this during a press conference at the official start of the World Bank and IMF’s spring meetings on Thursday.
Inflation around the globe has witnessed a spike in recent times with Nigeria recording 21.91 percent in February.
Ghana, a neighbouring country in Sub-Saharan Africa, recorded 45 percent in March, dropping from 52.8 percent in February.
The IMF Chief warned also that governments need to work hard to reduce their budget deficits, and do more to improve sluggish growth prospects in the mid-term.
“We expect central banks to stay the course in the fight against inflation, holding a tight stance to prevent a de-anchoring of inflation expectations,” Georgieva said.
She also called on member states to push through the structural transformations needed to speed up digital transformation, improve the business environment in many countries, and accelerate the green energy transformation.
“We estimate $1 trillion a year is needed just for renewable energy and investment that can translate into growth and jobs,” she said.
The IMF chief also cautioned countries to avert the costly consequences of growing global trade fragmentation, and a second Cold War.
“I am among those who know what the consequences of a Cold War are: it is loss of talent and contribution to the world.
“I don’t want to see that repeating,” she said, adding that the world should “rationally accept there will be some cost, there will be some fragmentation, but keep these costs low.”
Georgieva was born and raised in Bulgaria, a former Soviet satellite state.
“Multilateral institutions like the World Bank and IMF have an important role to play in preventing the world from splintering into different blocs with severe economic consequences,” she said.
An IMF report earlier this week predicted that growing trade fragmentation resulting from events like Brexit, the US-China trade war and the Russian invasion of Ukraine, could make the global economy as much as seven percent smaller than it otherwise would have been.
“Policymakers had a crucial role to play to defend the interests of their citizens,” Georgieva said, adding “If we fail to be more rational, then people everywhere will be worse off.”
