Meteorological language has prevailed over economic language in the presentation this Wednesday of the Global Policy Agenda by the managing director of the International Monetary Fund (IMF), an institution that is holding its spring meeting in Washington this week. Kristalina Georgieva has delivered a report rained down by energy crises, gusty inflation winds, supply storms and, ultimately, the perfect global storm. “The world is facing crisis upon crisis. The pandemic has been followed by a war. It is as if a storm hit us without having recovered from the previous one, ”she has sentenced before the press.
And amid the bleak overall picture, Georgieva has stepped into the eye of the storm. The managing director has calculated at “five billion dollars a month” the financial aid that Ukraine needs to “keep its economy running”. “The priority is to make sure that support covers the next three months,” she said.
And then? Little by little, said the Bulgarian economist, who has promised that the IMF will work “with its partners to get the money” for kyiv, while praising the management of its authorities, which they have achieved in the first eight weeks of war “maintain macroeconomic and financial stability in a country under enormous stress”. “We are already discussing with Ukraine a follow-up and recovery program. At the moment, the uncertainty is very high, but that should not prevent us from starting work on a reconstruction package.
Georgieva has recalled the dark omens shared on Tuesday by the IMF in its outlook report: the war in Europe, a catastrophe that the institution did not see coming at its last meeting in October, will cut one point from global growth forecast “for this year and the one that comes”, until leaving it at 3.6%.
“A total of 143 countries have seen their expectations reduced as a result of the conflict”, which has brought, according to Georgieva, “in addition to enormous suffering” for the victims in Ukraine and for the “neighboring countries most affected”, “the acceleration of inflation and an increase in oil and food prices that is strangling family economies, as well as a tightening of countries’ financial policies” caused by all of the above. “To this we must add”, added the head of the IMF, “the brutal confinements that China has imposed, which cause even more serious bottlenecks in global supply chains”.
Georgieva, who has called for “actions by central banks to keep the pulse of the economy” and reflexes to the national financial authorities to “adjust their policies on the fly if necessary”, is also concerned about “the risk of fragmentation geopolitics that could jeopardize the development gains of the past 75 years.” Not to mention “pressing global challenges such as climate change”, which have been postponed due to the aforementioned emergencies.
He knows in depth all the sides of the coin.
For this reason, he considers that global cooperation in the G-20 “must and will continue”, although some economy ministers have threatened to boycott meetings of the bloc of developed countries attended by Russian representatives, such as the one scheduled for this Wednesday in Washington. There is a long list of issues that “no country can solve on its own,” Georgieva said. “I can attest that it is more difficult when there are tensions, but [la cooperación] It is not impossible”.
The proof that the storm of the pandemic has not yet completely abated has been offered by the very format of this week’s IMF meeting, still predominantly virtual. Also the situation in China, whose growth forecast has been cut to 4.4% due to the severe confinements decreed by its authorities to stop the advance of covid, more than two years after it entered the scene. Georgieva has recommended that Beijing fiscally stimulate consumption “as it faces a slowdown caused by the new quarantines.” “What we see in China is that consumption is falling short, and that it is not recovering with the necessary force,” Georgieva warned.
About Argentina, accustomed to permanent economic storms, the director explained that inflation is the “great risk” that the country faces and has advanced that the design of an IMF economic program for it must be readjusted “quickly ” to reflect the changes in the global economy caused by the war in Ukraine.
To dismiss her speech, Georgieva has resorted to another language, that of poetry, in search of some hope among so much bad news. She has done so with perhaps the most quoted (and printed on breakfast cups and fridge magnets) lines from African-American poet Maya Angelou: “Every storm stays / No rain.” “And this storm,” added Georgieva, “will not be an exception.”