Governments should subsidise food and energy: Kristalina Georgieva

The President of the International Monetary Fund (IMF) told the BBC that governments should subsidise the cost of food and electricity for the weakest sections of society. People all throughout the world are trying to keep up with escalating living costs. Support should be offered "in a highly targeted manner, preferably by delivering subsidies directly to people," according to Kristalina Georgieva. Many nations are assisting, but opponents contend that it is insufficient.

"There are two priorities," Ms. Georgieva said of the cost-of-living situation. "One is the extremely poor people, portions of society who are now battling with high food and energy prices." The second is to assist enterprises that have been "particularly harmed" by the conflict in Ukraine, she added. The IMF's mission is to help governments stabilise the global economy and increase prosperity.

However, this is proving difficult due to record-high food prices this year, as well as steep increases in gasoline and gas prices. This is largely due to the simultaneous shocks of the coronavirus outbreak and the conflict in Ukraine. Russia and Ukraine are important agricultural and hydrocarbon exporters.

Due to the importance of these commodities to the global economy, annualised inflation rates in several nations have risen to their highest levels in decades: 9% in the UK, 8.3% in the US, and 7.4% in the Eurozone. Central banks are raising interest rates to try to limit the rise in prices, prompting some important players like Goldman Sachs' Lloyd Blankfein to warn of a recession.