The world faces greater uncertainty and potential complications this year as the economic recovery momentum is slowing and risks looming from inflation and supply chain bottlenecks, said the International Monetary Fund leader. .
The IMF is bracing for a possible surge in demand for its loans this year as a number of central banks tighten their monetary policies and after many developing countries increased their debt, the managing director said on Wednesday. of the entity, Kristalina Georgieva, in a virtual event.
Discontent with two years of economic upheaval due to the pandemic could generate greater unrest in some countries, he said.
Central banks must do “delicate juggling“Between fighting inflation and supporting an economic recovery, he said Georgieva. The indirect effect of the tightening of monetary policy in emerging markets “can add fuel to the fire of divergence”Between advanced and developing economies, he said.
“We have to be prepared for the possibility of further complications“, He said Georgieva at an online event hosted by the Center for Global Development, a Washington-based think tank.
Last year, the IMF allocated a record $ 650 billion in reserves, known as special drawing rights, for its 190 member countries to cope with the consequences of the pandemic. The fund also dedicated $ 168 billion to help 87 countries cope with the pandemic.
On Friday, the board of the IMF will discuss the proposal for a resilience and sustainability trust to provide long-term financing at low interest rates to help countries weather both the pandemic and the climate crisis, he said. Georgieva.
Funding for the trust would come from the reallocation by wealthy nations of some of the reserves they received through the issuance of special drawing rights last year.
