WASHINGTON, July 16. /TASS/. Development prospects of the global economy are increasingly becoming gloomy and uncertain and the crisis in Sri Lanka sends an alarming signal, IMF Managing Director Kristalina Georgieva said at the G20 Finance Ministers and Central Bank Governors meeting in Indonesia.
"I wish the global economic outlook was as bright as the sky in Bali, but unfortunately, it is not. The outlook has darkened significantly, and uncertainty is exceptionally high. Downside risks about which the IMF had previously warned have now materialized," Georgieva said, cited by the IMF press service.
The conflict in Ukraine adds "pressures on commodity and food prices," the IMF Managing Director said. "Global financial conditions are tightening more than previously anticipated. And continuing pandemic-related disruptions and renewed bottlenecks in global supply chains are weighing on economic activity," she noted.
"Moreover, downside risks will remain and could deepen—especially if inflation is more persistent—requiring even stronger policy interventions which could potentially impact growth and exacerbate spillovers particularly to emerging and developing countries. Countries with high debt levels and limited policy space will face additional strains. Look no further than Sri Lanka as a warning sign," Georgieva said.
IMF sees three priorities for navigation in the challenging environment, the official noted. These are all the measures to be taken by countries to bring inflation down, the help from the side of the fiscal policy to efforts of central banks to tame inflation, and "a fresh impetus for global cooperation will be critical to confront the multiple crises the world is facing," Georgieva added.