Last Update: April 07, 2023, 03:31 AM IST
Kristalina Georgieva also said that slower growth would be a “severe blow”, making it even more difficult for low-income countries to catch up. (Image: Reuters)
The managing director of the International Monetary Fund warned that the world economy had entered a sharp recession last year after the pandemic and the Ukraine conflict
The world economy is expected to grow by less than 3 per cent this year, with India and China expected to account for half of global growth in 2023, the IMF chief said on Thursday.
International Monetary Fund (IMF) Managing Director Kristalina Georgieva warned that the raging pandemic and Russia’s military invasion of Ukraine will continue this year after a sharp downturn in the world economy last year.
The period of slow economic activity will be prolonged, with the next five years seeing less than 3 percent growth, “our lowest medium-term growth forecast since 1990, and well below the 3.8 percent average for the past two decades,” he said. Said.
“Some of the momentum comes from emerging economies – Asia in particular is a bright spot. India and China are expected to account for half of global growth in 2023.
“A strong recovery in 2021 was followed by severe shocks from Russia’s war in Ukraine and its wider consequences – with global growth falling almost in half from 6.1 to 3.4 percent in 2022,” Georgieva said.
Georgieva said slower growth would be a “severe blow”, making it even harder for low-income countries to catch up.
“Poverty and hunger could increase further, an alarming trend that was started by the COVID crisis,” she explained.
His comments come ahead of the spring meetings of the IMF and World Bank next week, 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 in a bid to tame rapidly rising inflation rates.
He said that nearly 90 percent of advanced economies are projected to see a decline in their growth rates this year.
He said that for low-income countries, higher borrowing costs come at a time of weaker demand for their exports.
Georgieva said that while the global banking system “has come a long way” since the 2008 financial crisis, “concerns remain about deficiencies that may be lurking not only in banks but also in non-banks.
“Now is not the time for complacency.”
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)
