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It is too early to know what impact higher natural gas prices will have on the European economy, said Swedish Finance Minister Magdalena Andersson on Thursday.
Commenting on reporters at a press conference in Washington and in a television interview that followed, Andersson said the impact on the European economy will depend on how policymakers “deal” with higher prices and how long the higher prices persist.
Energy prices are a hot topic behind the scenes at the annual IMF and World Bank meetings in Washington this week, Andersson said.
Fossil fuel prices are rising around the world, leading some commodity experts to refer to the current state as an “energy crisis” that could have far-reaching effects on consumers.
Read: Energy crisis? What experts say
See also: Why consumers will pay a lot more for natural gas this winter
It is clear that governments need to help the most vulnerable and invest more in renewable energies, said Andersson. She spoke in her role as Chair of the International Monetary and Financial Committee [IMFC]that gives the IMF a strategic direction.
“We must never allow energy prices to be used as an argument to slow the green transition,” said Andersson.
At the same press conference, IMF Managing Director Kristalina Georgieva urged energy-importing countries not to introduce “flat-rate subsidy programs” to offset higher energy prices.
She said it was critical for governments to invest more in renewable energy.