IMF Warns Cost-of-Living Shocks Cause 'Lasting Deterioration' in Affordability
The fund said temporary income support is more effective than broad subsidies as inflation keeps essentials less affordable for lower-income families.
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According to the IMF, the successive crises keep the prices of basic necessities on a sustainable basis, aggravating global poverty and inequality. The institution also forecasts an increase in global inflation to 4.7% this year, fuelled in particular by the conflict in Iran. ...
IMF: Governments should spend more to tackle cost of living
Governments across the world should prioritise targeted welfare support for low income households over broader measures like tax cuts to ease the cost of living, the International Monetary Fund has said. Policymakers should do more to protect vulnerable households from surges in inflation caused by geopolitical events like the Iran war, the IMF says in [...]
IMF warns cost-of-living shocks cause 'lasting deterioration' in affordability
Global prices for many commodities have remained elevated for several years, fuelled first by pandemic supply chain shortages and then by the wars in Ukraine and Iran. The war in Ukraine snarled supply chains for many food-related goods as well as energy, and the US-Israel war on Iran has seen energy and fertilizer prices skyrocket due to the closure of a key Gulf supply route. "We find that the prices of necessities relative to other goods cont…
The IMF stresses, in this case, the importance of governments not allowing the most vulnerable families to bear the impact on themselves and that it is necessary to compensate them directly, rather than trying to make energy or food, for example, artificially cheap for all
Temporary and targeted monetary transfers to vulnerable households represent the most effective and economic strategy to mitigate the impact of rising costs of living during periods of crisis, while measures aimed at containing prices, such as subsidies, "are much less efficient" and entail fiscal costs [...] Entry The IMF criticizes subsidies because they are more costly and less effective in mitigating higher costs of living aparece primero en…
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