A continued slowdown in almost all the world’s advanced economies is expected to drag global growth below three percent this year, the International Monetary Fund’s Managing Director, Kristalina Georgieva, warned on Thursday.
“With rising geopolitical tensions and still-high inflation, a robust recovery remains elusive,” Georgieva said in prepared remarks ahead of the IMF and World Bank’s spring meetings next week.
“This harms the prospects of everyone, especially for the most vulnerable people and countries,” she added in the speech, due to be delivered in Washington.
Global growth almost halved last year to 3.4 per cent as the impact of Russia’s invasion of Ukraine rippled through the world economy, abruptly halting the recovery from the Covid-19 pandemic.
While Asia’s emerging markets are expected to see substantial increases in economic output – with India and China predicted to account for half of all growth this year – the good news will be outweighed by the slowdown expected for 90 percent of the world’s advanced economies.
“Growth remains weak by historical comparison – both in the near and medium term,” she said.
She added that world growth will likely remain at roughly three percent for the next half-decade, the lowest medium-term forecast since the 1990s.
Low-income countries are expected to suffer a double shock from high borrowing costs and a decline in demand for their exports, which could cause poverty and hunger to increase, Georgieva said.
“About 15 percent of low-income countries are already in debt distress and another 45 percent face high debt vulnerabilities,” she said, calling on wealthier IMF members to do more to provide support.
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