WASHINGTON: Soaring food and energy prices are raising the risk of social unrest, but attempting to tame costs through tax cuts, subsidies and price controls would be too costly, the IMF said Wednesday.
The fund`s comments, in its latest Fiscal Monitor report, come as food prices have surged by half since 2019 while energy bills soared in the wake of Russia`s invasion of Ukraine.
`Countries all around the world are facing more pressing and more painfultrade offs,` Vitor Gaspar, director of the International Monetary Fund`s fiscal affairs department, told AFP as the crisis lender holds its annual meetings in Washington this week.
The combination of inflation along with food and energy price surges point to a cost-of-living crisis, he said.
Countries spent heavily to protect their economies during the pandemic, then faced supply chain issues as they emerged from Covid lockdowns.
