New IMF boss Kristalina Georgieva: Global economy must be prepared for downturn
The incoming head of the International Monetary Fund (IMF) has warned that preparations for a global economic downturn “could soon be tested”.
Kristalina Georgieva, who will succeed Christine Lagarde as the new IMF boss next month, said that warning signs are “now flashing”, echoing fears of an upcoming recession in the wake of geopolitical turmoil.
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The Bulgarian economist, who was previously second in command at the World Bank, declared that her immediate priority was to “help members minimise the risk of crises and be ready to cope with downturns.”
She added: “It is harder than it was a decade ago to mobilise a swift collective response to the threats the world faces today”.
In a statement, the 66-year-old said: “The IMF is a unique institution with a great history and a world-class staff. I come as a firm believer in its mandate to help ensure the stability of the global economic and financial system through international cooperation. Indeed, in my view, the Fund’s role has never been more important.”
Georgieva, who was the only nominee for the vacancy, is the first person from an emerging economy to lead the IMF.
Her arrival at the IMF comes at a fragile time for the world economy, which has been rocked in recent months by events ranging from the US-China trade war and Brexit uncertainty to protests in Hong Kong.
Outgoing IMF boss Lagarge to set to take the reigns as president of the European Central Bank, replacing Mario Draghi.
The ECB raised interest rates for the first time in three years earlier this month, as it attempted to rejuvenate a number of slowing economies in Europe.
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However, concerns over the ECB’s powers to see off a recession have been mounting, with Deutsche Bank boss Christian Sewing telling a banking conference in London yesterday that central banks have already “turned on the money tap to the limit”.