The IMF and the World Bank open their annual assembly with a message of pessimism due to the multiple crises

The International Monetary Fund (IMF) and the World Bank have raised the curtain on their annual meeting in Washington on Monday with a dialogue that seemed like a contest of pessimism. The managing director of the Fund, Kristalina Georgieva, and the president of the Bank, David Malpass, have drawn a gloomy picture of the world economy, which will be specified in figures this Tuesday with the presentation of the World Economic Outlook report.

The annual meetings are being held at a time when the world is facing the slowest phase of economic activity in the last 80 years, rising inflation, the food and energy crisis, the war in Ukraine, to the continued negative impact of the pandemic, climate change and the worsening of poverty.

Georgieva already eviscerated the report’s main message in a speech at Georgetown University last week. This Monday she has reiterated the essential points. The IMF will lower global growth forecasts and the risk of recession has increased. Central banks have to act tough to control inflation, but without going overboard and causing or worsening a recession more than necessary. Governments must be careful with their fiscal policy and act responsibly, without generalized tax cuts or indiscriminate and permanent spending measures. The combination of monetary and fiscal policies is complicated and, although addressing them jointly is essential, nothing guarantees success. Although this Monday’s intervention had a conversation format for two,

Malpass has shared that diagnosis: “There is a real risk and danger of recession next year,” he insisted. In particular, she has warned of the risk of capital outflows from emerging markets and developing countries that are going to finance the fiscal deficits and corporate debts of advanced countries. “Currency depreciation makes the debt levels of developing countries increasingly onerous. The increase in interest rates is an additional burden. And inflation is still a big problem for everyone, but especially for the poor”, she pointed out in his speech.

The president of the World Bank has stressed that the crisis is especially affecting the poorest countries. He recalled that his latest report on poverty shows that there are 70 million more people in poverty and that the average income has fallen by 4%. “So when we think about our goal of shared prosperity, it’s not happening. There are setbacks in development. I call it the development crisis,” Malpass said.

As if that were not enough, both leaders have highlighted the additional risk of the climate crisis, which Georgieva has highlighted as an existential threat to humanity. Humanity can survive a recession or a period of high inflation, she has said, adding: “What we will not be able to survive is an endless climate crisis.”

Malpass, whose commitment to the fight against climate change has been called into question by statements made a few weeks ago, has highlighted the performance of his institution in this matter. In a parallel event to the Assembly of the United Nations (UN) in New York, Malpass was asked a few weeks ago if science supported the thesis that man is contributing decisively to climate change with the emission of greenhouse gases. greenhouse and refused to give an answer: “I don’t even know, I’m not a scientist,” he said then.

Days later, he apologized: “When they asked me ‘are you a climate denier?’ I should have said no,” Malpass said. “It was a poorly chosen phrase, I’m sorry, because we as an organization use science every day,” he added. This Monday he highlighted the funding that his institution lends to programs aimed at combating the climate threat.

Previous articleElon Musk – Career, Family, Net Worth and more
Next article“Neither left or right: forward”: this is the third party that wants to end polarization in the US