National states have the task of coping with the current inflation and energy crisis, Finance Minister Magnus Brunner (ÖVP) said Friday. Only then could the budget deficits be collectively reduced again. Brunner is currently attending an International Monetary Fund (IMF) meeting in Washington.
“Now the nation states are tasked with absorbing the hardships caused by the inflation and energy crises and relieving people and businesses. In the medium term, the return to sustainable fiscal paths must be the top priority,” said the Austrian finance minister. He shares the IMF’s view that, after the crisis, the common task is to reduce budget deficits in order to gain the necessary leeway. in the fight against inflation.
Less economic growth
According to a forecast by the IMF, the European economy will grow significantly less than previously assumed. Next year, that should be an increase of 0.6 percent. That was 0.7 percentage point less than was assumed in the summer, says Alfred Kammer, director of the Europe division of the International Monetary Fund. For 2022, however, he expects economic growth of 3.2 percent.
In some other European countries the average would be 1.7 percent. “Growth will slow and inflation will remain high,” Kammer said. The latter could be even higher than previously predicted. It is conceivable that a possible cessation of gas supply to Europe would increase inflation. In some Central and Eastern European countries, there could also be a drop in gross domestic product (GDP) of up to three percent.
Fight inflation with central banks
“We live in very challenging times economically, not just in Austria or the EU, but worldwide (…). Forecasts are constantly changing and the state’s income and expenditure situation is becoming more unstable. Of course, that also has an impact on the preparation of budgets, even if the starting point is different than in America (…)”, according to Brunner in Washington.
During the meeting, he will meet, among others, US Secretary of the Treasury Janet Yellen and Brian Nelson, the US Secretary of State for Counter-Terrorism and Money Laundering. It should be about the Austrian “register of beneficial owners”, which describes how sanctions can be implemented efficiently. Brunner will travel to Frankfurt next Tuesday to meet ECB (European Central Bank) President Christine Lagarde. One of the topics discussed is how to combat inflation at the central bank level.
Source: Krone
I’m an experienced news author and editor based in New York City. I specialize in covering healthcare news stories for Today Times Live, helping to keep readers informed on the latest developments related to the industry. I have a deep understanding of medical topics, including emerging treatments and drugs, the changing laws that regulate healthcare providers, and other matters that affect public health.
