The Globe and Mail reports in its Tuesday edition that global recession could be avoided if governments' fiscal policies were consistent with monetary policy tightening, but likely there would be countries falling into recession next year, the International Monetary Fund's managing director said on Monday.
A Reuters dispatch to The Globe reports that in the context of monetary policy tightening, fiscal policy cannot stay idle because the cost of living crisis is hitting parts of society dramatically, Kristalina Georgieva said.
"We do need central banks to act decisively. Why, because inflation is very stubborn. ... It is bad for growth and it is very bad for poor people. Inflation is a tax on the poor," Ms. Georgieva told Reuters in an interview.
She added fiscal policies that indiscriminately support everybody by suppressing energy prices and providing subsidies are working against monetary policies' purposes.
"So you have monetary policy putting a foot on the brakes and fiscal policy putting a foot on the accelerator," she said.
Governments across the globe have stepped in to support their populations amid high food inflation and shortages by following the U.S. Federal Reserve's interest rate hikes.
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