1 month ago
The pursuing is simply a transcript of an question and reply pinch Kristalina Georgieva, head of nan International Monetary Fund, that aired connected April 14, 2024.
MARGARET BRENNAN: We're backmost pinch nan Managing Director of nan International Monetary Fund Kristalina Georgieva - I sewage it correct this time, I apologize. Oil markets. person been swinging because of this instability successful nan Middle East escalation risk, nan threat to world shipping arsenic well. Can you gauge astatine this constituent what nan economical effect will be?
INTERNATIONAL MONETARY FUND MANAGING DIRECTOR KRISTALINA GEORGIEVA: So acold it has been somewhat moderate. We person seen connected Friday, erstwhile nan news of imaginable onslaught from Iran into Israel came, lipid prices jumped by 1%. We person seen truthful acold nan effect of this conflict, chiefly successful nan epicenter affecting Israel, and successful particular, devastating Gaza and West Bank pinch spillovers to nan neighboring countries. Even nan shipping demolition successful nan Red Sea, has not yet led to a awesome impact. But immoderate effect arsenic mini arsenic it mightiness beryllium is not desirable successful an system pinch precocious uncertainty and ostentation still not being brought down to target. Very simple. Oil prices spell up, ostentation goes up. So what tin beryllium done, to bring down uncertainty is, of course, for others- for those successful politics, successful nan military, from an economical standpoint, nan much we trim uncertainty, nan better.
MARGARET BRENNAN: We person a batch of uncertainty correct now, 1 of them being nan US Congress and backing for these conflicts. Congress is looking astatine authorizing nan Biden Administration to prehend Russian authorities assets, perchance for usage successful a speech aliases to rebuild Ukraine. What do you deliberation of that idea?
MANAGING DIRECTOR GEORGIEVA: This is really for nan jurisdictions that person authority to return a determination to make--
MARGARET BRENNAN: But it could person a world impact.
MANAGING DIRECTOR GEORGIEVA: What we do is we look astatine it and past we measure what nan effect mightiness be.
MARGARET BRENNAN: Right.
MANAGING DIRECTOR GEORGIEVA: And past of course, it is simply a matter of really would that beryllium received arsenic news crossed nan world, countries that are holding their reserves and let's- let's retrieve today, location they are $11 trillion successful reserves successful countries astir nan world, they would beryllium looking astatine that pinch immoderate attention. So what our position is, erstwhile a determination is being taken, immoderate nan determination is, please deliberation of nan consequences and particularly nan rule of unintended consequences and facet it in.
MARGARET BRENNAN: What you're saying location is that this could fundamentally origin what, a formation of assets retired of nan banking systems successful Europe successful particular?
MANAGING DIRECTOR GEORGIEVA: We person not seen nan guidance to beryllium of that magnitude. Our constituent is very simple. We person an integrated world economy, moreover pinch nan winds of fragmentation--
MARGARET BRENNAN: Right.
MANAGING DIRECTOR GEORGIEVA: --still, countries are connected pinch each other. So immoderate determination is being taken, return it wrong an oculus of nan desired impact--
MARGARET BRENNAN: Yeah.
MANAGING DIRECTOR GEORGIEVA: --and besides of what mightiness beryllium an unintended consequence.
MARGARET BRENNAN: We're successful an predetermination year. As you know, Goldman Sachs put retired a study outlining imaginable tariff increases arsenic nan astir important rumor for nan economical outlook if President Trump were to beryllium reelected, he continues to float ideas of tariffs anyplace from 10 to 60 percent, aliases upwards. How would you gauge nan effect and nan consequence of doing that?
MANAGING DIRECTOR GEORGIEVA: Let maine first bespeak connected why we person seen complete nan past decade, a backlash connected globalization. We each cognize an integrated world system lifts up maturation prospects and leads to betterment successful modular of living, but not for everyone. What we person seen is that communities that person been negatively impacted by globalization and person not been attended, they person not been helped to header pinch it are nan backbone of this backlash that we are seeing today. So my astir important constituent is, waste and acquisition is good. But it is not needfully bully for everyone. And policies person to bespeak connected that. We person to make judge that nan benefits are much broadly shared successful society.
MARGARET BRENNAN: Tariffs would adhd to ostentation arsenic well. You agree, arsenic an economist?
MANAGING DIRECTOR GEORGIEVA: Of course. There's- fto maine conscionable beryllium very clear. The logic we are proponents of an integrated world system is because it brings costs down and it increases nan good being of group astir nan world. So we are connected nan position that we should beryllium striving to person a much integrated economy. And fto maine opportunity this, what we are seeing is already waste and acquisition patterns are shifting.
MARGARET BRENNAN: Right.
MANAGING DIRECTOR GEORGIEVA: What is nan impact? The effect is nan truthful called connector countries play a bigger role. So you don't spot a waste and acquisition from A to B, you spot waste and acquisition going A to B to C to D. So we are lengthening nan proviso chains. And that, of course, leads to precocious costs connected consumers and arsenic you said, not awesome for inflation.
MARGARET BRENNAN: Well, you person a batch of activity up of you successful this 2nd term. You were conscionable reelected to congratulations.
MANAGING DIRECTOR GEORGIEVA: Thank you. Thank you, Margaret.
MARGARET BRENNAN: Thank you for joining us. We will beryllium correct back.
