Omicron variant that could signal a downgrade of growth: IMF Georgieva

Washington — The forecast for global economic growth from the International Monetary Fund will probably be downgraded by the advent of the Omicron variant of the coronavirus, IMF Managing Director Cristalina Georgieva said Friday.

“New varieties that can spread very rapidly can hurt self-confidence, and in that sense, we may see some downgrades in October’s forecasts for global growth.” Georgieva said at the Reuters Next Conference.

The IMF said in October that it expects the global economy to grow 5.9% this year and 4.9% next year, increasing uncertainty about the timeline for overcoming a pandemic and threatening a new coronavirus variant. Pointed out.

Inflation bytes

Georgieva said high inflation in the United States should be dealt with by policy makers, but such high price pressures have not been observed equally around the world, and other economies change policy at their own pace. He said it makes it possible.

The power of the U.S. economy is global, even if IMF leaders mean that the Federal Reserve will end its accommodative policy stance in the coming months, as most economists now expect. He added that it would have a positive spillover effect.

“We believe the road to raising the policy rate may be faster,” she said, pointing out 2022 as a promising goal.

Mr Georgieva said tariff cuts were a “useful tool” to help control inflation and were encouraged by US Trade Representative Katherine Tai’s efforts to cut tariffs through the exclusion process.

“It’s not a silver bullet. We have to take action in all of these ways so that we can see the inflation problem contained.”

Georgieva called for more aggressive debt restructuring so that the current debt burden of developing countries does not become a long-term headwind.

“In reality, 2022 will be a very pressing year for debt processing,” she said, with sovereign debt increasing by 18% during the COVID-19 pandemic and dozens to go before the pandemic. He added that it would take years. Level unless there is a “much more thoughtful and positive” policy.

“So far, interest rates are relatively low, which isn’t that dramatic. In the future … maybe not.”

Andrea Charal

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