The head of the International Monetary Fund (IMF), Kristalina Georgieva, warns of the consequences of “fragmentation” of the global economy, in an article published on 22 August. Her message is reminiscent of that issued by the Director General of the World Trade Organization (WTO), Ngozi Okonjo-Iweala, several months ago (see EUROPE 13232/23).
According to Ms Georgieva, rising barriers to trade risk undermining the gains of global economic integration, and global growth will suffer as a result. Global GDP could fall by as much as 7% over the long term as a result of trade fragmentation, according to IMF data. For countries that choose to disengage from other partners when it comes to technology, this could mean a reduction in GDP of up to 12%.
All this would lead to food and energy insecurity, according to Ms Georgieva. To limit these effects, she calls for an urgent reduction in trade restrictions, but also for the strengthening of international monetary reserves and the establishment of international insurance mechanisms, such as the global financial safety net.
In addition, the IMF must continue to strengthen its links with other international organisations such as the World Bank, development banks and the World Trade Organization (WTO), concludes the former Bulgarian European Commissioner.
To see the publication, go to https://aeur.eu/f/8dp (Original version in French by Léa Marchal)