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IMF: This year will be a difficult year for the global economy

International Monetary Fund (IMF) Director Kristalina Georgieva spoke at the panel titled “Global Economic Outlook” in Davos. Stating that this year will be a difficult year for the global economy, Georgieva said, “The lesson we can take after the consecutive crises is: think about the unthinkable.”

International Monetary Fund (IMF) President Kristalina Georgieva participated in the panel titled “Global Economic Outlook” at the World Economic Forum (WEF) held in Davos, Switzerland.

Georgieva said, “We think 2022 will be a difficult year. Along with this, commodity price shocks are coming in many countries. The shock I would like to draw your attention to is the full price shock last week. Because perhaps the feeling that the economy is entering more challenging waters. The price of oil has fallen, but the price of food continues to rise.”

Referring to the reasons for the rise in food prices, Georgieva said, “We can reduce the use of gasoline when growth slows down, but we have to eat it every day. The concern about accessing food at a reasonable price globally stands on us like a roof.”

Reminding that the production and application of vaccines in the fight against Covid-19 at the beginning of this year was thought to end the quarantines on a global scale, Georgieva said that the ongoing epidemic in China, however, caused disruptions in the supply chain.

IMF Director Georgieva said, “We learned that with the war (in Ukraine) there can be unimaginable shocks that fuel inflation. In this sense, we learned a broader lesson that we live in a world that is more prone to shock.”

Georgieva stated that the Ukrainian economy is expected to enter into a recession, shrinking by at least 35-40% this year and the Russian economy by 11.5%, and economic difficulties are felt in economies such as Egypt, Sri Lanka and Lebanon.

Underlining that there are some important lessons to be learned in many issues that have deeply affected the global economy in the recent period, Georgieva said, “The lesson we can take after the consecutive crises is: think about the unthinkable. Stopping the economy (with the epidemic) was unthinkable. It was unthinkable until a war broke out in Europe. How many times will unthinkable situations occur?”

Stating that economies as a whole must be prepared and healthy with all its elements in order to be resilient, Georgieva noted that for example, a resilient banking system cannot be considered sufficient without social issues, people’s working conditions and a more resilient world that can be passed on to future generations.

Source: NTV / Translated by Irem Yildiz

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