IMF chief says global growth ‘not enough’

The IMF’s estimate for global growth of 2.8 percent for 2023 is “deeply concerning,” as it predicts weak growth over an extended period, she said.

Director of the International Monetary Fund, Kristalina Georgieva, has said the global economy has proved remarkably resilient to multiple shocks, but a combination of weak growth and persistent inflation has yet to overcome.

The IMF’s projection of 2.8 percent global growth for 2023 “is not enough to provide opportunities for businesses and people around the world, and most worrying is the projection of weak growth over a longer period of time,” Georgieva told a news conference. press conference at the IMF. and World Bank meetings in Washington on Thursday.

The IMF warned on Tuesday that a major new flare-up of banking system turmoil that choked lending and sparked a rush to safe haven assets could push global growth to 1 percent, sending many economies into recession and hurting emerging markets. would come under considerable pressure. economies.

After recovering from the COVID-19 pandemic and setbacks from high inflation and war spillovers in Ukraine, policymakers have two main tasks in the near term: fighting persistent inflation and preserving financial stability, Georgieva said.

Both have been made more complex by the bench press from the failure of two US regional banks and the forced sale of global lender Credit Suisse, she said.

IMF chief economist Pierre-Olivier Gourinchas told Reuters on Tuesday that policymakers should not abandon their fight against inflation over concerns about financial stability.

Georgieva said vigilance to emerging risks is “absolutely paramount”.

“Central banks should address financial stability risks as they arise, working closely with regulators and regulators,” Georgieva said. “The key is to monitor risks that may be hiding in the shadows, in banks and non-bank financial institutions or in industries such as commercial real estate.”

The IMF has issued the lowest five-year global growth forecast since it began issuing such forecasts in 1990, forecasting growth of 2.8 percent in 2023 and then fluctuating around 3 percent through 2028. Georgieva said this was due to lagging productivity and the potential for fragmentation of the global economy.

The predictions “are not terrible. We are not in a recession,” she said. “In my book, we’re not in a great place. We’re seeing risks rising, but we now have a track record over the past few years of remarkable resilience.”