The International Monetary Fund has put in guard against “geo-economic fragmentation” as policymakers and business leaders gather at the World Economic Forum in Davos, in Swiss.
In a post on the blog, the managing director of the International Monetary Fund Kristalina Georgieva said that the global economy is facing the “test largest since World War II, “as the Russian invasion of Ukraine exacerbates the persistent economic effects of the Covid-19 crisis, undermining growth. It has pushed inflation to the highest levels in decades.
The sharp rise in food and energy prices has put pressure on households around the world, as central banks are tightening monetary policy to curb inflation, putting more pressure on debt-laden countries, businesses and households. according to a report released by CNBC and viewed by “Al Arabiya.” net”.
When combined with a sharp increase in volatility in financial markets and the continuing threat of climate change, the International Monetary Fund said the world faces a “potential confluence of disasters”.
“However, our responsiveness is hampered by another consequence of the war in Ukraine, the sharp increase in the risk of geoeconomic fragmentation, “said Georgieva.
“The tensions on trade, standard technology and security have increased for many years, undermining growth and confidence in the current global economic system. “
He added that trade policy uncertainty alone reduced global GDP by nearly 1% in 2019, according to IMF research, and nearly 30 countries restricted their neighbors on food, energy and other materials. prime.
Georgieva warned that further disintegration would have enormous global costs, harming people both economically and socially.
Read More About: World News