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The 3 harsh warnings and recommendations for governments in 2023

The 3 harsh warnings and recommendations for governments in 2023

1. Inflation

The still high levels of global inflation are one of the main concerns that the International Monetary Fund estimates for this year 2023.

Because, the first recommendation is to achieve global disinflation. “Clear communication from the central bank and appropriate responses to changes in data will help keep inflation expectations anchored and moderate wage and price pressures,” the IMF explained.

2. Growth

The second suggestion is aimed at containing the rebound in the Covid-19 pandemic. For the agency, countries require mechanisms to promote vaccination and access to medicines in countries where coverage is low.

The IMF added that a global campaign for the ordering and sharing of data is needed in the face of upcoming pandemics.

3. Worry about debt

Guarantee the financial stability of nations It is another of the recommendations presented by the entity, which maintains that the deficiencies in data matters still need to be corrected.

Debt restructuring, one of the aspects that has been most discussed in recent times it also appears among the recommendations of the IMF, since the current levels of lower growth and higher borrowing costs have raised the debt ratio in several economies.

In cases where the debt is unsustainable, restructuring or reshaping it early as part of the reform program may avoid the need for more drastic adjustments”, the document noted.

The recommendations

The IMF also emphasizes that, in the current situation of high global prices, Focusing on aid to the most vulnerable it can be achieved “through social safety nets”. These would work “as cash transfers to eligible households based on income or demographic factors,” or through transfers to power companies based on past energy use.

The recommendation emphasizes that the subsidies “must be temporary and must be offset by measures that generate income“, as appropriate.

Likewise, the institution also recommends supply policies to address structural factors for growth. For example, a campaign focused on investing in green energy to enshrine energy security. Strengthening multilateral cooperation, key to avoiding fragmentation, calls for the IMF

The IMF asked the world’s governments strengthen multilateral cooperation as a key aspect to further avoid fragmentation product of war and pandemic.

“Urgent measures are needed to contain the risks of geopolitical fragmentation and to ensure cooperation around issues of common interest,” the entity explained.

Among these initiatives, cooperation to avoid a rebound in the pandemic, debt forgiveness for emerging countries, accelerating the green transition and strengthening world trade stand out.

Strengthening the global trading system would make it possible to address the risks related to its fragmentation. This can be achieved by repealing export restrictions or modernizing the WTO rules,” the IMF said.

Source: Ambito

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