The head of the IMF said persistently high interest rates, a series of bank failures in the US and Europe and growing geopolitical divisions threaten global financial stability.
The global economy is expected to grow by less than 3 percent this year, compared to 3.4 percent last year, increasing the risk of hunger and poverty worldwide, the head of the International Monetary Fund (IMF) said.
Kristalina Georgieva said on Thursday that growth is expected to remain around 3 percent over the next five years, calling it “our lowest medium-term growth forecast since 1990.” income countries to catch up.
“Poverty and hunger could increase further, a dangerous trend set in motion by the COVID crisis,” she said.
Georgieva’s comments came ahead of next week’s meetings of the IMF and its sister lending agency, the World Bank, where policymakers will meet to discuss the most pressing issues of the global economy.
The annual meeting will take place as central banks around the world continue to raise interest rates to curb ongoing inflation and as an ongoing debt crisis in emerging economies drives up debt levels, preventing countries from growing.
Low-income countries are expected to suffer a double shock from high borrowing costs and a decline in demand for their exports, which could increase poverty and hunger, Georgieva added.
“About 15 percent of low-income countries are already in debt and another 45 percent are close to that,” she added, calling on wealthier IMF members to do more to provide support.
The head of the IMF said persistently high interest rates, a series of bank failures in the US and Europe and growing geopolitical divisions threaten global financial stability.
Georgieva said countries have so far been “resilient climbers” out of the coronavirus pandemic, which has killed nearly 6.9 million people worldwide, disrupted global supply chains and exacerbated global food insecurity.
However, major concerns remained as advanced economies face the challenges of high inflation and poorer countries weighed down with debt, and the United States, the European Union and others rethink their trade relations with China, adding to fears of instability.