BY NGOZI ONYEAKUSI

The International Monetary Fund (IMF) has urged governments to provide temporary and targeted support to vulnerable citizens facing rising food and energy prices, warning that repeated economic shocks are putting increasing pressure on household incomes and public finances.

IMF Managing Director, Kristalina Georgieva, made the call during a briefing on the Global Policy Agenda, stressing that policymakers must protect vulnerable people without distorting market price signals through artificial price controls.

She said the global economy was facing multiple challenges, including the negative energy supply shock triggered by the war in the Middle East, persistent inflation, rising interest rates and increasing debt-servicing costs.

According to Georgieva, the pressures are particularly severe for low-income countries and fragile and conflict-affected states, especially those dependent on energy imports and those with limited access to technological advances.

 

She noted that rising fuel and food prices, declining development assistance and weaker investor appetite for riskier markets were compounding the difficulties facing vulnerable economies.

 

The IMF chief warned that repeated shocks had depleted countries’ fiscal and energy buffers, leaving governments with less room to respond to new economic pressures.
“What is our loudest call to policymakers right now? Make urgent repairs to the fiscal house before the cracks widen,” she said.
Georgieva urged governments to strengthen their fiscal positions by improving revenue mobilisation, rationalising expenditure and enhancing public financial management.

 

She said countries needed to rebuild their fiscal capacity while ensuring that assistance reached those most affected by rising living costs.

 

“Protect people, not prices,” she said, explaining that temporary and targeted support for the most vulnerable would help cushion the effects of higher food and energy costs while preserving price signals.

 

On monetary policy, Georgieva called on central banks to remain focused on price stability, noting that tighter monetary policy was most justified in economies where inflation remained above target and economic activity was strong.

She also highlighted the growing pressure from rising bond yields in advanced economies, which have increased borrowing and debt-servicing costs for emerging markets and low-income countries.

The IMF managing director said the global economic outlook remained uneven, with economies closely integrated into the artificial intelligence supply chain, including Thailand, Malaysia, South Korea and Singapore, performing relatively better.

She projected global growth at 3.1 per cent in 2026, unchanged from the IMF’s April forecast but below the 3.4 per cent recorded in the previous year.

Georgieva stressed that strengthening fiscal frameworks and providing well-targeted assistance would be critical to helping countries withstand further shocks and protect vulnerable populations amid continued global uncertainty.