Thursday, September 29, 2022
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IMF chief warns 'fasten your seat belts' as threat of inflation fight grows

(Bloomberg) – International Monetary Fund Managing Director Kristalina Georgieva said she expects the global economy to avoid a technical downturn next year due to higher borrowing costs The slowdown in growth will leave millions feeling a recession.

“A rate hike will have an impact, and we’ll see an impact on growth,” Georgieva said in an interview with Bloomberg TV’s Francine Laqua in New York on Wednesday.

“For hundreds of millions of people, this feels like a recession, so buckle up,” she said. “Hopefully, if we get inflation under control, then we can see the basis for growth and recovery.”

Soaring prices forced global central banks to tighten monetary policy, which is expected to cool inflation, but The risk of the economy falling into recession. In the U.S., Fed officials turned to aggressively raising interest rates to stem the fastest price rise in 40 years.

U.S. interest rate hikes have also helped the dollar strengthen, making it harder for countries to service their dollar-denominated debt and adding to their own inflationary pains.

Georgieva also said in the interview that “there is no doubt” that the IMF board will soon approve the so-called food shock window, a form of help triggered by the Russian invasion The supply crisis hit the country’s mechanism Ukraine, which disrupted food shipments.

Georgieva said in September 13 after talking to President Volodymyr Zelenskiy that the war-torn country could be one of the countries that benefited from it one. Georgieva has previously said Ukraine could receive aid similar to the $1.4 billion in emergency resources it received in March, just days after the war began. The country faces a financial shortfall of up to $5 billion a month, according to government estimates. Kyiv also plans to repay about $4 billion in debt to the International Monetary Fund by 2024.

The International Monetary Fund will start a visit to Ukraine in October, Prime Minister Denis Schmehar said on Tuesday. Last week, he criticized the Washington-based bank for being too slow to strike a new deal as Ukraine fights back against a full-scale invasion by President Vladimir Putin’s forces that began in February.

Kyiv formally applied for a new IMF loan program in August and hopes to receive initial disbursements as early as November.

©2022 Bloomberg LLC

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