(Bloomberg) — The world faces greater uncertainty and potential turbulence this year, with the economic recovery’s momentum slowing and risks from inflation and supply-chain bottlenecks to social unrest looming, the International Monetary Fund’s chief said.
The IMF is preparing for a potential increase in demand for its lending this year as central banks tighten monetary policy and after many developing countries increased their debt, Managing Director Kristalina Georgieva said at a virtual event on Wednesday. Disaffection with two years of economic upheaval from the pandemic could lead to greater unrest in some countries, she said.
Central banks face a “delicate balancing act” between fighting inflation and supporting an economic recovery, Georgieva said. The spillover of monetary policy tightening on emerging markets “can add fuel to the fire of divergence” between advanced and developing economies, she said.
Read more: IMF Warns of Economic Collapse in Poor Nations Without Debt Fix
“We have to be prepared that there may be more turbulence,” Georgieva said in an online event hosted by the Center for Global Development, a Washington-based think tank.
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