International Monetary Fund (IMF) Managing Director Kristalina Georgieva poses for a portrait during an interview at Meridian House in Washington, DC, on April 6, 2023. AFP
International Monetary Fund (IMF) Managing Director Kristalina Georgieva poses for a portrait during an interview at Meridian House in Washington, DC, on April 6, 2023. AFP
India and China are expected to account for half of the global growth in 2023, IMF chief Kristalina Georgieva said on Thursday.
She added that the global economy is expected to grow at less than 3 percent this year.
Global economic slowdown to continue
International Monetary Fund (IMF) managing director Georgieva warned that a sharp slowdown in the world economy last year following the raging pandemic and Russia’s military invasion of Ukraine would continue in 2023.
The period of slower economic activity will be prolonged, with the next five years witnessing less than 3 percent growth, our lowest medium-term growth forecast since 1990, and well below the average of 3.8 percent from the past two decades,” she said.
Some momentum comes from emerging economies, Asia especially is a bright spot. India and China are expected to account for half of the global growth in 2023. But others face a steeper climb, she explained.
After a strong recovery in 2021 came the severe shock of Russia’s war in Ukraine and its wide-ranging consequences global growth in 2022 dropped by almost half, from 6.1 to 3.4 percent, Georgieva said.
Georgieva said slower growth would be a severe blow,” making it even harder for low-income nations to catch up.
“Poverty and hunger could further increase, a dangerous trend that was started by the COVID crisis, she explained.
Her comments come ahead of next week’s spring meetings of the IMF and the World Bank, where policy-makers will convene to discuss the global economy’s most pressing issues.
The annual gathering will take place as central banks around the world continue to raise interest rates to tame galloping inflation rates.
About 90 percent of advanced economies are projected to see a decline in their growth rates this year, she said.
For low-income countries, higher borrowing costs come at a time of weakening demand for their exports, she said.
Georgieva added that while the global banking system had come a long way since the 2008 financial crisis, concerns remain about vulnerabilities that may be hidden, not just at banks but also non-banks.
Now is not the time for complacency.
With inputs from PTI
Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.