WASHINGTON: Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), on Thursday urged the international community to unite in addressing shared economic and environmental challenges.
Speaking in Washington ahead of the upcoming annual meetings of the IMF and World Bank, Georgieva emphasized the need for collaboration despite a “difficult geopolitical environment.”
Georgieva, who recently commenced her second five-year term, highlighted the progress made in combating inflation while cautioning that significant risks remain for the global economy.
“The big global inflation wave is in retreat,” she stated, attributing this shift to a combination of decisive monetary policy, easing supply chain constraints, and falling food and energy prices. She praised these efforts for averting a global recession and preventing widespread job losses.
However, she warned that while inflation rates are declining, the elevated price levels affecting consumers will continue. “The higher price level that we feel in our wallets is here to stay,” she noted.
In her address, Georgieva announced that the IMF’s executive board will welcome a new third chair for Africa, which will be held by Ivory Coast. This move aims to enhance representation and influence for African nations within the IMF.
As geopolitical tensions rise, particularly in the Middle East, and with the US presidential election approaching, Georgieva’s remarks resonate with urgency. She referenced the potential economic repercussions of escalating conflicts, asserting, “We live in deeply troubled times.”
The former president, Donald Trump, has proposed increasing tariffs and altering the current independence of the Federal Reserve, raising concerns about the future of global monetary policy.
In her speech, Georgieva reaffirmed the importance of independent central banks and the role of international financial institutions in providing support during crises, such as the Covid-19 pandemic.
However, she warned of the pressing challenges posed by increasing military expenditures and diminishing aid budgets for developing countries.
“The peace dividend from the end of the Cold War is increasingly at risk,” she said. “We must not allow this reality to become an excuse to do nothing to prevent a further fracturing of the global economy.”
