This is confirmed by the words of Kristalina Georgieva, the new head of the International Monetary Fund
Trade disputes are putting a strain on the global economy, substantially weakening manufacturing activity and investment, while retaining economic potential. This is confirmed by the words of Kristalina Georgieva, the new head of the International Monetary Fund (IMF).
“For the global economy, the cumulative effect of trade conflicts could result in a loss of around $ 700 billion by 2020, or about 0.8% of GDP,” said the IMF CEO. “As a reference, this is roughly the size of Switzerland’s entire economy,” said the Bulgarian economist, who took over from Frenchwoman Christine Lagarde from 1 October.
The new IMF chief called for synchronized political action to accelerate growth
The trade conflict between the United States and China has not only increased the direct costs for businesses and consumers, but has also caused secondary effects, such as loss of confidence and market reactions. “The results are clear. Everyone loses in a trade war,” Georgieva said. “So we have to work together now and find a lasting solution on the trade”.
Noting that the global economy is in a synchronized slowdown, the new IMF chief called for synchronized political action to accelerate growth and build more resilient economies. The political priorities, for the IMF, include the wise use of monetary policy and the strengthening of financial stability, the spread of fiscal instruments to face current challenges, the implementation of structural reforms for future growth and the reception of international cooperation.
One of the IMF’s priorities is to help countries reduce carbon emissions
Georgieva, who stood out in the global fight against climate change, also said that one of the IMF’s priorities is to help countries reduce carbon emissions and become more resistant to climate, pushing countries to adopt a price significantly higher carbon content.
New research by the IMF confirms that carbon taxes can be one of the most powerful and efficient tools. “But the key is to change tax systems, not just add a new tax,” added Georgieva. “I am confident that if we work together, aware of each other’s challenges and interests, we can offer a better future for everyone”.
MORE ON THIS TOPIC