International Monetary Fund Managing Director Kristalina Georgieva said in an interview with Archyde.com that between 10 and 20 countries (mostly in Africa) are likely to request aid, following the IMF recently approved a new borrowing window to deal with food shocks.
On Friday, the IMF approved a new borrowing window to deal with food shocks under existing emergency financing instruments to help vulnerable countries deal with food shortages and rising costs caused by Russia’s war in Ukraine.
Georgieva indicated that the signing of agreements at the expert level with Egypt and Tunisia will take place “very soon.”
Georgieva added that the fund is in advanced discussions with the two countries.
Both governments are suffering from economic crises that put great pressure on public finances.
“I can confirm that there are discussions at a very advanced stage with the two countries to conclude agreements at the expert level, it is difficult to predict whether this will take days or weeks, but it will be very soon,” she said.
“We are looking at large programmes. The size is usually decided through negotiations and a final agreement is reached with the authorities,” she said.
The head of the International Monetary Fund indicated that a global recession can be avoided if the fiscal policies of governments are consistent with the tightening of monetary policy, but she suggested that countries will enter a recession next year.
She added that fiscal policies cannot remain as they are in light of the tightening of monetary policy because the crisis of the high cost of living is hitting layers of society violently.
“We need the central banks to act decisively. Why, because inflation is very high … and it hurts growth and hurts very badly the poor. Inflation is a tax on the poor,” she said in an interview with Archyde.com during a visit to Saudi Arabia.
Georgieva pointed out that fiscal policies that provide subsidies to all without discrimination by curbing energy prices and providing subsidies on commodities work once morest the purposes of monetary policy.
“You have a monetary policy that puts pressure on the brakes and a fiscal policy that puts pressure in the direction of acceleration,” she said following participating in a conference on food security in the Saudi capital, Riyadh.
