Director of the International Monetary Fund (Mr.IMF), Kristalina Georgieva, predicted this Thursday difficult years for the global economythat will grow around 3% over the next five years, lower figure since the nineties.
“It will make it harder to reduce poverty, heal the economy from the wounds of the crisis, and provide new and better opportunities for everyone,” Georgieva said in a public appearance in Washington ahead of the Foundation’s spring meetings. celebrate next week.
The global economy is expected to “grow by less than 3%” in 2023, a year in which about 90% of advanced economies will experience a recession. decrease in growth rateGeorgieva said a few days before the IMF’s updated growth forecasts were released (next Tuesday).

Photo: Reuters
The fund predicts that global growth will remain at around 3% over the next five years. lowest term since 1990and well below the average of 3.8% over the past two decades, Georgieva noted.
The last few years, he says, “have been like climbing one big mountain after another only to find that there’s a lot more to come“First with Covid, then with the war in Ukraine and high inflation.
“So far we have shown ourselves to be resilient climbers. But the path forward, and especially the path back to sustainable growth, is rocky and tangled, and the ropes that hold us together may be weaker than they were a few years ago.”
Georgieva noted that there are “noticeable differences” between groups of countries. Thus, growth will come at the expense of emerging economies, and “Asia especially is a bright spot.” “Expected that Indian and Chinese account for half of global growth in 2023,” he said.
“But others face a steeper climb. Economic activity is slowing in the US and the euro area, where interest rates more weight on demand,” he explained.
Georgieva also referred to the banking crisis experienced in recent weeks following the collapse of US banks Silicon Valley and Signature, and said it had been shown “that the banking sector has come a long way since the 2008 global financial crisis.” .
“Today, banks are generally stronger and more resilient, and the authorities have acted surprisingly quickly and thoroughly in recent weeks,” said Georgieva, noting that, however, “concerns remain about vulnerabilities that could be hidden” and “now is not the time for complacency”.

Photo: Photolaboratory
Georgieva believes there are three priorities for action to improve growth expectations in both the short and medium term, starting with fighting inflation and ensuring financial stability.
On this occasion, he believed that “there can be no sustainable growth without price stability and lack of financial stability”.
He deplored that inflation remains “stubbornly high” despite higher interest rates by central banks, and acknowledged that efforts to bring it down are now more difficult due to the turbulence experienced in the banking sector, which shows how hard. is the transition from a period of low rates to new circumstances.
In any case, the IMF director believed that as long as inflation remained high, central banks were expected to continue their policies. restrictive monetary policy.
Therefore, he says, it is a “hard climb” that includes controlling inflation, protecting financial stability and “guarding social cohesion” while trying to “protect the most vulnerable” from the most harmful side effects.
The second important challenge that Georgieva highlighted in her speech was to improve growth prospects over the medium term.
For this he chose Increase productivity with structural reforms that accelerate the digital revolution, improve the business climate and ensure greater participation.
As an example, he said that if close the gap for women labor market participation could improve by 35% in countries where there is currently high gender inequality.
He also stressed the needbig green shiftto protect the planet by creating new economic opportunities.
“Our shared goal of meeting the Paris Agreement will require trillions of dollars to be diverted to green projects,” said Georgieva, who estimated that renewable energy projects alone would require $1 trillion a year.

Photo: Reuters
As a third goal, Georgieva pointed out, there is the promotion of solidarity to reduce inequality, for which she must use the “strength” of the IMF, which has provided nearly $300 billion in new funding for 96 countries since the beginning. Covid pandemic,” he recalled.
(EFE)
Source: Aristegui Noticias

Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.