The IMF made a disturbing statement about the safety margin of the world economy

The chief economist of the International Monetary Fund (IMF) Silvana Tenreiro said that the safety margin of the world economy is close to exhaustion. She made this statement at the autumn session of the governing bodies of the IMF and the World Bank.

According to Tenreiro, despite the previously demonstrated resilience, economic reserves are not unlimited. Rising borrowing costs and rising public debt servicing costs are reducing fiscal reserves, leaving countries with insufficient financial resources to support other areas or create a cushion in case of new shocks.

The economist stressed that now it is not enough just to respond to emerging challenges - it is necessary to move to recovery. To do this, it is important to create the conditions for fiscal maneuver and strengthen the economy on the supply side: this will allow countries to achieve sustainable growth in the long term.

In addition, the representative of the IMF urged financial regulators to maintain sufficiently tight monetary policy to return inflation to the target level. At the same time, as Tenreiro noted, the independence of central banks is critically important – now it is more relevant than ever.