LONDON (The Guardian) - Governments need to subsidize the cost of food and energy for the poorest members of society, the head of the International Monetary Fund (IMF) has said.
People around the world are struggling with the rising cost of living.
Kristalina Georgieva said support needs to be provided “in a very targeted manner, preferably by providing subsidies directly to people”.
Many governments are providing some help but critics argue it’s not enough.
When it comes to the cost of living crisis, Ms Georgieva said: “There are two priorities, one the very poor people, segments of society that are now struggling with high food and energy prices”.
The second, she added, is to support those businesses that have been “most damaged” by the war in Ukraine.
This is largely because of the twin shocks of the coronavirus pandemic and the war in Ukraine. Between them Russia and Ukraine are major exporters of crops and hydrocarbons.
The importance of these commodities to the global economy has led the annualized inflation rate to reach its highest point in decades in many countries: 9% in the UK, 8.3% in the U.S. and 7.4% in the Eurozone.
Central banks are lifting interest rates to try and slow the increase in prices, which has led some influential figures such as Goldman Sachs’ Lloyd Blankfein to warn of the risk of recession.