K. Georgieva-USA: ‘Some pain’ is necessary to fight inflation

The head of the International Monetary Fund, Kristalina Georgieva, stressed on Friday the importance of fighting inflation now, in order to support the prospects for future economic growth, warning that such a thing could cause “some pain” to consumers in the short term.

“Success over time (in terms of falling prices) will be beneficial to global growth, but some pain to achieve this success may be the price,” said Kristalina Georgieva, as the IMF revised its forecast for the growth of the US economy for 2022: to 2.9% instead of 3.7% estimated last April.

Georgieva said the IMF believed the United States could avoid a recession, but warned that the outlook had “significant” risks of economic downturn.

Possible recession will be “relatively short”

If the US economy declines, it will most likely be “relatively short”, with only a modest rise in unemployment and may resemble the downturn in the US economy in the early 2000s, an International Monetary Fund official said on Friday.

Nigel Chuck, deputy director of the IMF’s Western Hemisphere Division, said the depth of any recession would depend on the magnitude of the shock that pushed the US economy away from the IMF’s forecast for a marginal recession. that strong household balance sheets would provide a “cushion”.

“There is a lot of savings in the system that would help support demand, and there has historically been a tightness in the job market,” Chuck told a news conference on the IMF’s forecast for the US economy. “So, given that all this would help support the economy, in the event that it was hit by a negative shock, it would pass relatively quickly and there would be a relatively quick recovery afterwards,” he explained.

It is recalled that the International Monetary Fund has revised its forecast for the growth of the US economy for 2022: to 2.9% instead of 3.7%, which was estimated last April.