WASHINGTON (Al-Jazeera) - International Monetary Fund Managing Director 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 sticky inflation.
The IMF’s projection of 2.8 percent global growth for 2023 “is not enough to bring opportunities to businesses and people around the world, and most worrisome is the projection for weak growth over a longer period of time,” Georgieva told a news conference at the IMF and World Bank meetings in Washington on Thursday.
The IMF on Tuesday warned that a major new flare-up of banking system turmoil that choked off lending and sparked a rush into safe-haven assets could slam global growth back to 1 percent, throwing many economies into recession and putting considerable stresses on emerging market economies.
After recovering from the COVID-19 pandemic and suffering setbacks from high inflation and spillovers from the war in Ukraine, policymakers have two main tasks in the near term – fighting persistent inflation and safeguarding financial stability, Georgieva said.
Both have become more complex due to banking pressures from the failures of two US regional banks and the forced sale of global lender Credit Suisse, she said.
Georgieva said vigilance on emerging risks “is absolutely paramount.”
The IMF has issued its lowest five-year global growth projection since it started issuing such forecasts in 1990, with growth forecast to be 2.8 percent in 2023 and then hover at about 3 percent through 2028. Georgieva said this was due to lagging productivity and the potential for fragmentation of the global economy.