[Economics] Lagarde warns of risks of fragmentation of the world economy

[Draeno]

 

(Bloomberg Opinion) -- Christine Lagarde warned that changes in the world economy induced by the geopolitical situation pose a challenge for the European Central Bank and its peers.

“We are witnessing a fragmentation of the global economy into competing blocs, with each bloc trying to bring as much of the rest of the world closer to its respective strategic interests and shared values,” the ECB president said on Monday.

“All of this could have far-reaching implications in many domains of monetary policymaking,” he said in a speech at the Council on Foreign Relations in New York, describing possible instability around supply chains and more “multipolarity.” ”.

Lagarde's comments build on a discussion last week among finance chiefs about the growing role of geopolitical strife — such as Russia's invasion of Ukraine — in the global economy.

The key takeaway among wealthy, democratic nations is that there is a need for greater “resiliency” in supply chains to ensure they are better insulated from risks ranging from wars and pandemics to coercive attempts by authoritarian regimes.

But others, including the International Monetary Fund, warn that a "fragmentation" of the world into competing blocs could hurt growth.

“Central banks must provide stability in an era that is anything but stable,” Lagarde said. "The time to think about how to respond to the changing geopolitical situation is not when fragmentation is upon us, but before."

 

https://www.infobae.com/america/agencias/2023/04/18/lagarde-advierte-sobre-riesgos-de-fragmentacion-de-la-economia-mundial/