WASHINGTON, March 16. /TASS/. The large-scale economic problems that the developed countries are currently facing can only be resolved through painful and unpopular measures, Alexey Mozhin, Russian executive director at the International Monetary Fund (IMF) and dean of the IMF board of directors, said in an interview with TASS. He added that the leaders of these countries are not prepared to take such measures.
"What are the main troubles and misfortunes of the economies of the wealthy countries? There are two of them. There is an extremely high level of public debt. The picture is very diverse, of course, but the key countries have already exceeded safe levels of public debt. The second problem is inflation. I would like to emphasize that economic diseases are cured through pain," Mozhin noted.
According to him, in order to reduce inflation and start reducing public debt, "to prevent its further growth, they need to take painful, difficult measures."
"If we talk about inflation, then this would be a significant hike in interest rates, that is, an increase in the cost of credit. Of course, this would negatively affect growth in these economies. If we talk about reducing the level of public debt, then this could be done through reducing budget deficits. There are two ways: either cutting costs or boosting revenue, that is, raising taxes," the official explained.
All this, he stressed, "is very painful, and will have a negative impact on the growth of the economies" of the developed countries.
"Honestly, as a person who has worked at the IMF for quite a few years, I do not see that the political leadership of these countries is prepared to take such unpopular, difficult measures," the dean of the IMF board of directors said.
He explained that the [public] debts of these countries have reached such proportions due to "populist economic policies."
"This is the inability of political leadership to make decisions that will be unpopular among the population. This is a specific feature of the political systems of Western countries. Now, as a consequence of all this, they must find a cure by resorting to painful measures. Everything that is healthy and pleasant has been tried a long time ago. The economy is more easily treated through pain, there is no other way," Mozhin said. According to him, under the current circumstances, developed countries will not be able to "reach any high growth rates."