Governor of Bank of Lithuania: as global economic outlook falters, concerted international response becomes crucial

Against a backdrop of high inflation, the global economy, including Lithuania’s, will grow significantly slower next year than previously forecasted, and downside risks are elevated, as shown by the latest International Monetary Fund (IMF) projections. According to Gediminas Šimkus, Chairman of the Board of the Bank of Lithuania, who is attending the IMF annual meetings in Washington, this environment requires a swift and coordinated response by central banks, governments and international financial institutions to the emerging challenges, reports the Bank of Lithuania.

“With high inflation, driven mainly by exogenous supply shocks caused by Russia’s war against Ukraine as well as energy and political blackmail against the rest of the world, it is crucial that aid measures reach the most vulnerable countries, populations and businesses quickly. This will put pressure on governments to compensate for increased spending, but from a monetary policy perspective, it is important that state aid is targeted as much as possible at the most vulnerable social groups and economic activities,” said Gediminas Šimkus.