Kristalina Georgieva, the head of the International Monetary Fund (IMF), warned on Wednesday that there will be "people on the street" if efforts are not made to safeguard the most vulnerable from inflation.
"It is essential to recognize that the cumulative effect of many crises is already taxing people's patience and resiliency. And there will be consequences if you did not take action to assist the most needy "She told Christiane Amanpour of CNN.
"If we do not reduce inflation, the most vulnerable will be harmed, because an escalation in food and energy prices is an annoyance for the affluent, but a tragedy for the poor. When advocating for a vigorous war on inflation, we consider the disadvantaged first "Georgieva remarked.
She noted that central banks throughout the world are "forced" to hike interest rates to battle inflation.
"Fiscal policy, if it goes all out to benefit everyone, will actually hinder monetary policy, it would be the enemy of monetary policy," said the head of the IMF. "This is because increasing demand drives prices back up, necessitating more tightening." "The essential issue at hand is restoring growth circumstances, and price stability is a crucial condition," she continued.
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The IMF head told Amanpour that the events that have caused price rises, including the Omicron form of Covid-19 and Russia's invasion of Ukraine, have "made inflation our worst adversary today."
"This year is challenging, and next year will be much more so. Why? Due to shock after shock after shock. In only three years, the epidemic (which is not yet ended), the war, Russia's invasion, which drove up oil and food costs, and a cost of living crisis ensued "she said to CNN
When questioned about the surge of support for far-right politicians in countries such as Italy and Sweden, Georgieva stated that she is not shocked "not surprised that people are becoming upset They have been confined to their homes for many, many months. They observe prices increasing drastically. Hence, my request to policymakers is to be sensitive."
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Amanpour was warned by the head of the International Monetary Fund that the Omicron strain of Covid-19 and Russia's invasion of Ukraine had mostly contributed to price hikes "made inflation our greatest adversary today.
There will be people on the street "She stated, This is what will occur if we are unable to safeguard the sense of survival and the sense of community.