US recession would be 'necessary price' to defeat inflation, says IMF chief

25/06/2022 3:20:00 AM

US recession would be 'necessary price' to defeat inflation, says IMF chief

US recession would be 'necessary price' to defeat inflation, says IMF chief

With inflation rising sharply, and the Federal Reserve raising interest rates, the United States is facing an increased risk of a downturn, IMF Managing Director Kristalina Georgieva said Friday.

But any temporary pain caused by a recession would be "a necessary price to pay" to defeat damaging inflation, she said.BUDAPEST: Artistic swimmer Anita Alvarez was dramatically rescued from the bottom of the pool by her coach after fainting at the World Aquatics Championships in Budapest.World Aquatics Championships in Budapest.Agence-France-Presse BRUSSELS, Belgium — European Union leaders granted candidate status Thursday to Ukraine and Moldova in a strong show of support against Russia’s invasion, as the United States said it was sending Kyiv more high-precision rocket systems.

The Washington-based crisis lender again slashed its US growth forecast to 2.9 percent, from the 3.'It was a big scare.7 percent forecast in April, which was cut from the rate predicted at the start of the year.I had to jump in because the lifeguards weren’t doing it,” Fuentes was reported as saying by Spanish newspaper Marca.The world's largest economy rebounded strongly from the pandemic downturn, but that has come with "unwelcome side effects" of rising prices, Georgieva said.Fuentes, dressed in shorts and a T-shirt, dived to the bottom of the pool and dragged Alvarez to the surface before being assisted to get the stricken swimmer to the edge of the pool.While the IMF is confident the Fed's rate hikes will bring down inflation, "We are conscious that there is a narrowing path to avoiding a recession," she said in a statement.“Ukraine’s future is within the EU,” said Zelensky, who had been working the phones for weeks.

The Fed last week implemented the biggest increase in its benchmark lending rate in nearly 30 years, as part of its aggressive effort to quell inflation that is at a four-decade high and squeezing American families struggling with rising prices for gasoline, food and housing.Alvarez was taken on a stretcher to the pool's medical center, with teammates and fans appearing to be in shock poolside.ADVERTISEMENT Alvarez was taken on a stretcher to the pool’s medical centre, with teammates and fans appearing to be in shock poolside.The US economy already was seeing strong demand clashing with supply snarls due to pandemic lockdowns in China and elsewhere, when Russia invaded Ukraine, which has intensified the inflationary pressures.For 2023, growth is expected to slow to 1.Fuentes, a four-time Olympic medalist, told Spanish radio that Alvarez had fainted due to the effort expended during the routine.7 percent, but "narrowly avoid" a recession, according to the annual review of the US economy, known as the Article IV consultation.“She only had water in her lungs, once she started breathing again everything was OK,” said Fuentes.The IMF chief said the battle against inflation must be the "top priority" despite the impact a US slowdown might have on the global economy.'It felt like a whole hour.European powers before the invasion had distanced themselves from US support for Ukraine’s NATO aspirations and EU membership is at least years away.

"Success over time will be beneficial for global growth, but some pain to get to that success can be a necessary price to pay," she said in response to a question from AFP.Georgieva met with US Treasury Secretary Janet Yellen and Fed Chair Jerome Powell and the officials "left no doubt as to their commitment to bring inflation back down.'She wasn't breathing.“She wasn’t breathing … I went as quickly as I could, as if it were an Olympic final." Nigel Chalk, deputy chief of the IMF's Western Hemisphere division, said any US recession is likely to be short-lived, given the stockpile of savings and strong business and household balance sheets, and the strong labor market."All of those things would help support the economy," he said.."So if it was hit by negative shock, it should pass relatively quickly and have a relatively quick recovery afterwards.She also reportedly fainted during an Olympic qualifier in Barcelona last year.Ukraine’s needs have been increasingly urgent as Russia — which failed to take Kyiv immediately after invading on February 24 — advances in the east, tightening its grip on strategically important Severodonetsk and its twin city Lysychansk across the Donets river.

" Roll back tariffs The IMF also urged Washington to remove punitive trade duties imposed under former president Donald Trump -- something President Joe Biden said he is considering and Yellen appears to favor.'Fuentes said Alvarez planned to rest Thursday and was still hoping to compete in Friday's team event after further medical checks."Especially at a time when inflation is high and supply chains are strained..She also reportedly fainted during an Olympic qualifier in Barcelona last year..we can see clear benefits in rolling back the tariffs that were introduced over the last 5 years," Georgieva said in a statement.A representative of pro-Russian separatists in Ukraine told AFP the resistance of Ukrainian forces trying to defend Lysychansk and Severodonetsk was “pointless and futile.

However, US Trade Representative Katherine Tai has said the steep tariffs on China offer negotiating "leverage" with Beijing which she is reluctant to give up.The IMF report said removing tariffs on steel, aluminum, and a range of products from China "would support growth and help reduce inflation." The rapid US recovery, helped by low interest rates and hefty government aid, had domestic benefits, reducing poverty and creating more than 8.5 million jobs since the end of 2020, according to the IMF analysis.It also offered a boost to the pandemic-ravaged global economy, but fund economists cautioned that it will be "tricky" to avoid recession.Roman Pohuliay, a 19-year-old in a pink sweatshirt, said most residents had fled the city.

"The stakes are clearly high.Misjudging the policy mix -- in either direction -- will result in sizable economic costs at home and negative outward spillovers to the global economy." However, the report pushed back against comparisons to the inflationary era of the 1980s, noting the economy and the central bank actions are "markedly different." -- Agence France-Presse.

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