The world economy faces a risk of stagflation since the post-pandemic recovery has occurred in an environment in which value chains have been significantly interrupted, which has caused high inflation, warned the Secretary of the Treasury , Rogelio Ramírez de la Or , by participating in a meeting with finance ministers from Latin America, within the framework of the meetings of the International Monetary Fund ( IMF ) and the Inter-American Development Bank ( IDB ) that take place in Washington, United States.
“Restrictive monetary policies to limit inflation will cause economic losses, mainly in the most vulnerable sectors of the labor market. In this sense, governments must be strategic in their spending and invest in supply and supply policies that allow increasing the productivity of domestic markets,” he stressed.
What is a stagflation?
The World Bank (WB) defines stagflation as a “prolonged period of low growth and high inflation” .
Rogelio Ramírez de la O said that in the context of the pandemic, there were also opportunities to accelerate reforms from the supply side, which allow strengthening the growth potential of the countries and promoting inclusive growth.
He stressed that the Mexican government promotes well-being and social development through programs and projects that guarantee national integration, and has focused on promoting quality jobs and increasing the income of workers.
Meanwhile, Undersecretary Gabriel Yorio participated in the 8th Ministerial Meeting of the Coalition of Finance Ministers for Climate Action, made up of 78 countries, whose objective is to analyze the challenges for climate transition in the current economic and geopolitical context.
In his speech, he stressed that the Ministries of Finance have an important role in reducing the financing gap to face climate change, address social gaps and, in some cases, security and peace challenges.
He also urged to share the sense of urgency to fulfill the commitments, add more actors and turn our attention to additional mechanisms to mobilize financing towards sustainable investments, since to reach net zero emissions in 2050 and limit global warming, it takes 10 times the amount of assets held by the Multilateral Development Banks.
