The Global Economy Needs Inflation Under Control, Says IMF Chief

Inflation is a word that's been on people's lips in 2022 more than ever before. It can often feel like it's been one thing after another when it comes to the world's economy, thanks to global events which have all pushed up pieces and caused shortages that haven't been seen in decades.

It might not be a surprise that inflation needs to be kept in check if we stand a chance of getting the economy back on track. However, Kristalina Georgieva, the International Monetary Fund chief, says it's more important than ever to get things back on track if we stand a chance of recovering in 2023. In fact, she knows the global economy needs inflation under control now more than ever before.

Supply-chain issues could cause 2023 to be financially tougher

Kristalina Georgieva works as the International Monetary Fund chief and spoke to CNN about what inflation could mean for us going forward if the global banks don't get things under control. According to Kristalina, this year was already looking "gloomy," but "This year is tough, next year tougher" if things continue the way they are. Kristalina blames supply-chain issues caused by ongoing global events for the majority of the problems. All of them have pushed up energy and food prices and have led to a situation that hasn't been seen in decades. 

The IMF chief believes the chances of recovery are low

What are the chances of getting inflation under control in 2023? According to the International Monetary Fund chief, they might not be so great. Just when one thing seems to be calming down, something else comes along which shakes the financial world. To top it off, the global pandemic continues to linger longer than people expected back in 2020. All in all, Kristalina claims that this has caused the "cost of living crisis" that's affecting everyone from all walks of life across the world.

Europe has been hit the hardest, but the US is still struggling

Prices in the US have hit all-time highs in recent months, with gas hitting over $5 a gallon in June 2022. However, it turns out things in Europe are far from great. Electricity prices have increased more than 1,400% since 2021 and won't be slowing down any time soon. The solution? It seems no one knows the answer. Banks are continuing to hike interest rates, with more increases seen in September 2022, to try and slow down borrowing rates and create a cushion as the markets continue to drop.

The IMF chief says the most vulnerable will be hit the hardest

Kristalina Georgieva knows how much inflation will hit people if it continues the way it has in 2022 - and she worries "this will hurt the most vulnerable." In fact, the IMF chief added there will be "more people on the street" unless inflation slows down, calling inflation the world's "biggest enemy" right now. While there might not be an instant solution, it appears Kristalina is one of millions calling for something to be done to protect people moving forward.

We don't have to look too far to see how much inflation has caused the cost of things to rise in recent months. Although there isn't a simple answer to the global issue, it seems the global economy needs inflation under control now more than ever if we stand a chance of recovering in 2023.