The storm that unloaded on the alpine town of Davos on Monday afternoon served the managing director of the International Monetary Fund (FMI), Kristalina Georgieva, to frame his metaphor about the world economy: “The horizon has darkened,” he said, although he ruled out “for the time being” the risk of a global recession which, in any case, could occur in some countries “with a more fragile situation and heavy dependence on food and energy” from Russia or Ukraine.
In April, the IMF lowered its global growth forecast to 3.6% due to the war in Ukraine. Since then, the horizon has darkened and 2022 will be a difficult year, Georgieva warned in a debate on the world’s economic outlook at its annual meeting. World Economic Forum (WEF), which this year is plagued by the geopolitical, strategic and economic consequences of the war in Ukraine. “I do see a recession in Europe,” said another speaker at the panel, Citi’s CEO in the United States. Jane Fraser.
Georgieva focused his concern on inflation, and in particular on inflation the rise in food prices. “We are experiencing a shock in commodity prices, particularly food prices,” which are skyrocketing to an unprecedented level, he said. “We can reduce our oil consumption, but we must eat every day,” added the IMF director, who on Monday signed a document urging states to take steps to restore confidence. and to avoid geoeconomic fragmentation to the detriment of the poorest countries, in a context in which the economy is “perhaps” facing the biggest challenge since World War II. The Fund calls on states to prioritize four measures to restore global confidence: reducing trade barriers; promote debt agreements of vulnerable countries; modernize cross-border payment systems, and tackle the transformation towards green energy.