The new forecasts of the International Monetary Fund (IMF) point to a difficult future for the global economy, marked by weak economic growth in the medium term, escalating tensions in international trade and high levels of public debt. This was announced today in Washington by IMF Managing Director Kristalina Georgieva, quoted by the international organization's representation in Bulgaria, BTA reported.
In her speech, delivered before the annual meetings of the IMF and the World Bank, which will be held next week, Georgieva outlined a sobering picture of the global economy, Reuters adds.
"Families are suffering, people are angry. In advanced economies, the level of inflation has reached values that have been observed only once in a generation. This happened in emerging markets too. But look how bad it was for low-income countries. Both at the country level and at the individual level. Inflation always hits the poor the hardest,” the IMF chief said.
"And to make matters worse, we are in a difficult geopolitical environment. We are deeply concerned about the escalating conflict in the Middle East and its potential to destabilize regional economies and global oil and gas markets. The humanitarian impact of this conflict, along with the ongoing wars in Ukraine and elsewhere, is heartbreaking. On top of that, this is happening at a time when our forecasts point to a relentless combination of low economic growth and high debt. This combination bodes a difficult future," Kristalina Georgieva warned.
She also expressed concern about the increase in military spending by a number of countries around the world. This will limit the means to support developing countries, notes the IMF Managing Director. Kristalina Georgieva emphasizes the imposition of increasing restrictions and increasing protectionism in international trade. These factors fragment the global economy, limit trade growth and "pour cold water on an already chilled global economy".
She calls on governments around the world to reduce their public debt and restore their financial reserves in order to be able to meet the next economic shock. They must reduce their budget expenditures and increase productivity, emphasizes Kristalina Georgieva. She points out that global cooperation is more important than ever against the backdrop of contradictions in the field of international trade, negative climate change and the rapid development of technologies based on artificial intelligence. These problems require the introduction of regulatory rules on a global scale, notes the managing director of the International Monetary Fund.
Kristalina Georgieva notes that there is also "good news" related to the world economy.
"The great global inflation wave is receding. The combination of decisive action in the field of monetary policy, easing of restrictions related to supply chains, as well as a moderate decrease in food and energy prices, is leading us back to price stability. This has happened without the global economy falling into recession and without large-scale job losses. Labor markets in both the United States and the euro area are "cooling" steadily. This is a huge achievement," emphasized Kristalina Georgieva. Earlier this month she began her second five-year term as managing director of the IMF, Reuters recalls.