“If we don’t reduce inflation, it will hurt the most vulnerable, because an explosion in food and energy prices for the better-off is an inconvenience – for the poor, a tragedy. So we think of first to the poor when we argue for a forceful attack on inflation,” Georgieva said.
Central banks around the world have “no choice” but to raise interest rates to fight inflation, she added.
“Fiscal policy, if it generously helps everyone, will actually get in the way of monetary policy, that would be the enemy of monetary policy, because you increase demand and that drives prices up again, and then there needs to be more tightening,” the IMF chief said. “The crucial question facing us is to restore the conditions for growth, and price stability is a critical condition,” she added.
The events that led to price hikes – primarily the Omicron variant of Covid-19 and Russia’s invasion of Ukraine – have “made inflation today our greatest enemy”, the chief said. of the IMF in Amanpour.
“This year is difficult, next year more difficult. Why? Because of shock after shock after shock. In just three years: the pandemic (not yet over), the war, the invasion of Russia which has drives up energy and food prices, and then the result is a cost of living crisis,” she told CNN.
Asked about an increase in support for far-right candidates like in Italy and Sweden, Georgieva said she was “not surprised to see people getting angry. They’ve been locked up in their homes for months and years. months and months. They see prices rising dramatically. And that’s why my appeal to policy makers is to “be considerate.”
The IMF chief told Amanpour that the events that led to price hikes – primarily the Omicron variant of Covid-19 and Russia’s invasion of Ukraine – have “made inflation today our greatest enemy.
There will be “people on the street”, she said. “If we are not able to protect the sense of survival and the sense of togetherness, that is what will happen.”