International Monetary Fund (IMF) Managing Director Kristalina Georgieva has said that India and China are predicted to contribute half of the global growth in 2023. Georgieva also said that the global economy is projected to grow by less than 3% this year.
Georgieva said emerging economies offer some impetus and Asia in particular is a bright spot. He expects India and China to account for half of global growth in 2023, while others will face a more uphill climb.
He also cautioned that the global economic downturn caused by the COVID-19 outbreak last year and the Russia-Ukraine war could continue this year as well. According to Georgieva, the Russia-Ukraine crisis cuts global growth in 2022 by almost half, from 6.1 percent to 3.4 percent.
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The IMF chief has predicted a prolonged period of sluggish economic activity with growth below 3% over the next five years. According to the head of the IMF, this is “our lowest medium-term growth forecast since 1990, and well below the two-decade average of 3.8 per cent”.
She also said that slower growth will make it more difficult for low-income countries to catch up. “Poverty and hunger could get worse”, he explained, “a dire trend started by the Covid issue”.
Georgieva further said that low-income nations will be affected by higher borrowing prices at a time when demand for their goods is declining. He also said that the growth rate in almost 90% of the advanced economies is expected to fall in 2023.
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Georgieva commented that while the global banking system “has come a long way,” “concerns remain about vulnerabilities that may lurk not only in banks but also in non-banks”.
His comments come ahead of the spring meetings of the IMF and World Bank next week, where policymakers will gather to examine the most pressing concerns of the global economy. The annual meeting will take place as central banks around the world continue to raise interest rates to slow inflation.