The IMF warned that the global economy is running out of reserves

The global economy has shown resilience, but its margin of safety is running out, warned Silvana Tenreiro, chief economist at the International Monetary Fund (IMF). TASS reports this.

The economist noted that against this backdrop, it is important to “move from simply responding to challenges to recovery, again creating space for fiscal maneuver and strengthening the resilience of the economy on the supply side.” Otherwise, higher borrowing and debt-servicing costs “could crowd out critical spending in other areas and reduce fiscal reserves for future shocks,” she said.

To counter these risks, Tenreiro called on highly indebted countries to embark on fiscal consolidation, saying that “any support measures, if needed, should be temporary and targeted” and that regulators should maintain monetary policy tight enough to bring inflation back to target.