A sustained slowdown in nearly all of the world’s advanced economies is expected to drag global growth below 3% this year. Managing Director International Monetary Fund (IMF) Kristalina Georgieva warned that on Thursday (6/4).
“With increasing geopolitical tensions and inflation remains high, a strong recovery remains elusive,” said Kristalina Georgieva in remarks ahead of next week’s spring meetings of the IMF and World Bank. “This jeopardizes the prospects for everyone, especially for the most vulnerable people and countries,” she added in a speech that will delivered in Washington.
Global growth almost halved from last year at around 3.4%. This is because the impact of Russia’s invasion of Ukraine rocked the world economy which halted recovery from the co-19 pandemic.
Also read: Inflation Remains High, Central Bank of South Africa Raise Interest Rates
Asian emerging markets are expected to see a substantial increase in economic output. India and China are expected to account for half of all growth this year. This good news will be comparable to the expected slowdown in 90% of the world’s advanced economies. “Growth remains weak by historical comparison, both in the short and medium term,” he said.
He added that world growth is likely to remain around 3% for the next half decade. This is the lowest medium-term forecast since the 1990s.
Also read: Discard US Dollars, China-Brazil Trade Using Their Own Currency
Low-income countries are expected to experience a double shock from high borrowing costs and reduced demand for their exports. This can lead to increased poverty and hunger. “About 15% of low-income countries are already in debt distress and another 45% face high debt vulnerability,” he said. He called on the wealthier members of the IMF to do more in providing support.
(AFP/Z-2)