IMF chief says global growth ‘is not enough’

The IMF’s global growth estimate for 2023 of 2.8 percent is “very concerning” as it projects weak growth over a longer period, he said.

The managing director of the International Monetary Fund, Kristalina Georgieva, has said that the global economy has proven remarkably resilient to multiple shocks, but has yet to overcome a combination of weak growth and persistent inflation.

The IMF’s projection of global growth of 2.8 percent by 2023 “is not enough to provide opportunities for businesses and individuals around the world, and what is most worrisome is the projection of weak growth for a longer period of time.” long,” Georgieva said at a news conference at the IMF. and World Bank meetings in Washington on Thursday.

The IMF warned on Tuesday that a major new outbreak of turmoil in the banking system that choked off lending and sparked a rush to safe-haven assets could push global growth back to 1 percent, pushing many economies into recession and putting considerable strain on emerging markets. economies.

After recovering from the COVID-19 pandemic and suffering setbacks from high inflation and the aftermath of the war in Ukraine, the authorities have two main short-term tasks: fighting persistent inflation and safeguarding financial stability, Georgieva said. .

Both have become more complex due to banking pressures from the bankruptcies of two regional US banks and the forced sale of global lender Credit Suisse, he said.

The IMF’s chief economist, Pierre-Olivier Gourinchas, told Reuters on Tuesday that the authorities should not stop their fight against inflation due to financial stability problems.

Georgieva said vigilance on emerging risks “is absolutely paramount.”

“Central banks should address financial stability risks when they arise, working closely with regulators and supervisors,” Georgieva said. “The key is to monitor risks that may be lurking in the shadows, in banks and non-bank financial institutions or in sectors like commercial real estate.”

The IMF has issued its lowest five-year global growth forecast since it began issuing such forecasts in 1990, with growth forecast at 2.8 percent in 2023 and then hovering around 3 percent through 2028. Georgieva said this was due to lagging productivity and the potential for fragmentation of the Global economy.

The forecasts “are not horrible. We are not in a recession,” he said. “In my book, we’re not in a good place, we see the risks increasing, but now we have a track record over the past few years of remarkable resilience.”