The sharp rise in interest rates has clearly increased risks to financial stability, said Kristalina Georgieva, top woman of the International Monetary Fund (IMF). Authorities in Switzerland and the United States, among others, have intervened after the collapse of the banks to avoid excessive chaos, but the events of the last few weeks “underscore the importance of supervision”.
“We continue to monitor developments closely and are exploring the potential implications for the global economy and financial stability,” Georgieva said in a speech at the China Development Forum in Beijing.
In the speech, he also reiterated his warning that fragmenting the world into different political and economic blocs will curb global growth. At the moment, for example, there is a trade conflict between the United States and China, especially in the field of high technology, and the war in Ukraine. These can hinder international cooperation for development aid or the fight against climate change.
Economic growth
Georgieva, on the other hand, was optimistic about China’s expected economic growth, which is expected to recover further this year from the severe coronavirus lockdowns major cities faced last year. But you also called on the Chinese government to reform the domestic economy.
He believes less emphasis should be placed on investment in heavy industry, which consists largely of state-owned companies. Conversely, consumer spending is expected to become an important pillar of economic growth. A better social safety net in case of unemployment and sickness would help.
At the same time, he called on the Asian superpower to cooperate more closely with the international community to help poor countries suffering from high debt burdens. Of all countries, China is the world’s largest lender to other countries, increasingly acting as a provider of emergency credit to developing countries. But if those countries get into trouble, according to critics of the United States, among others, China often delays a solution in which debts are canceled.
“In the coming months and years it will be essential to continue helping the most vulnerable countries in the world. Only through cooperation can we tackle the world’s biggest challenge, avoiding the trap of fragmentation,” said Georgieva.
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
