There will be “people on the streets” globally unless measures are taken to protect the most vulnerable from inflation, International Monetary Fund (IMF) head Kristalina Georgieva warned Wednesday.
“It is important to think that this combined impact of multiple crises is already testing people’s patience and resilience. And if you don’t act to support the most vulnerable, there will be consequences, ”she told CNN’s Christiane Amanpour.
“If we don’t reduce inflation, it will harm the most vulnerable, because an explosion in food and energy prices for the better off is a drawback – for the poor, a tragedy. So let’s think of the poor first when we claim to attack inflation forcefully, ”said Georgieva.
Central banks around the world “have no choice” but to raise interest rates in an effort to fight inflation, he added.
“Fiscal policy, if it goes generously to help everyone, will actually be an obstacle to monetary policy, it would be the enemy of monetary policy, because demand increases and this pushes prices up again, and therefore there must be more tightening”, said the head of the IMF. “The critical issue facing us is restoring the conditions for growth and price stability is critical,” he added.
The events that led to rising prices – mainly the Omicron variant of Covid-19 and the Russian invasion of Ukraine – have “made inflation our greatest enemy today,” the IMF chief told Amanpour. .
“This year is difficult, next year more difficult. How come? Owing to shock upon shock upon shock. In just three years: the pandemic (not over yet), the war, the Russian invasion that drives up energy and food prices, and then the result is a cost of living crisis, “he told CNN.
Asked about increasing support for far-right candidates like Italy and Sweden, Georgieva said she is “not surprised to see people get angry. They have been locked in their homes for months and months and months. They see prices rise dramatically. And that’s why my appeal to politicians is ‘be considerate’ ”.
The IMF chief told Amanpour that the events that led to rising prices – mainly the Omicron variant of Covid-19 and the Russian invasion of Ukraine – have “made inflation our greatest enemy today.” .
There will be “people on the street,” he said. “If we can’t protect the sense of survival and the sense of solidarity, this is what will happen.”