IMF warns that ‘protectionism should not be reversed’

The director of the International Monetary Fund (IMF), Kristalina Georgieva, said that there should be no return to protectionism in the process of global economic recovery.

Georgieva was speaking at the 2023 Brussels Economic Forum, organized under the theme “Global Tensions and Scarce Resources”.

Explaining that after many years of increasing global integration, the risk of splitting into rival economic blocs has increased recently, Georgieva noted that this is a bad scenario for everyone.

Georgieva recalled that world economic growth is weak in the medium and long term, and that the priority of central banks is to keep inflation under control instead of growth.

‘EUROPE FACES BILATERAL CHALLENGES’

“The European Union (EU) faces the double challenge of slow growth and high inflation,” Georgieva said, adding that income and opportunities will not increase if attention is not paid to demographics and productivity.

“In order to improve productivity and opportunities in Europe, it is necessary to invest in structural reforms, people, technology and innovation,” Georgieva said.

“If it takes 7 years to build a wind or solar farm, it will be difficult for the EU to meet its emission reduction targets.” Georgieva said, noting the importance of the EU facilitating the permitting process for clean technology projects.

‘MULTILATERAL COOPERATION IS ESSENTIAL FOR LONG-TERM GROWTH’

“One of the most urgent steps towards a strong recovery is to avoid the lure of a new form of protectionism,” Georgieva said of the state of the world economy.

Emphasizing that reviving multilateral cooperation is essential for long-term growth, Georgieva noted that Covid-19, supply chain issues and the Russia-Ukraine war have raised national security concerns in investment decisions.

Georigeva asserted that these developments have real economic costs and reveal a more fragmented world. (AA)