Last Updated: April 07, 2023, 03:31 IST
Kristalina Georgieva additionally mentioned slower progress could be a “severe blow,” making it even tougher for low-income nations to catch up. (Image: Reuters)
International Monetary Fund managing director warned {that a} sharp slowdown in the world financial system final 12 months following the pandemic and Ukraine battle
The IMF chief on Thursday mentioned that the world financial system is predicted to develop at lower than 3 per cent this 12 months, with India and China anticipated to account for half of world progress in 2023.
International Monetary Fund (IMF) managing director Kristalina Georgieva warned {that a} sharp slowdown in the world financial system final 12 months following the raging pandemic and Russia’s navy invasion of Ukraine would proceed this 12 months.
The interval of slower financial exercise will likely be extended, with the subsequent 5 years witnessing lower than 3 per cent progress, “our lowest medium-term growth forecast since 1990, and well below the average of 3.8 per cent from the past two decades,” she mentioned.
“Some momentum comes from emerging economies — Asia especially is a bright spot. India and China are expected to account for half of global growth in 2023. But others face a steeper climb,” she defined.
“After a strong recovery in 2021 came the severe shock of Russia’s war in Ukraine and its wide-ranging consequences — global growth in 2022 dropped by almost half, from 6.1 to 3.4 per cent,” Georgieva mentioned.
Georgieva mentioned slower progress could be a “severe blow,” making it even tougher for low-income nations to catch up.
“Poverty and hunger could further increase, a dangerous trend that was started by the COVID crisis,” she defined.
Her feedback come forward of subsequent week’s spring conferences of the IMF and the World Bank, the place policy-makers will convene to focus on the worldwide financial system’s most urgent points.
The annual gathering will happen as central banks around the globe proceed to elevate rates of interest to tame galloping inflation charges.
About 90 per cent of superior economies are projected to see a decline in their progress charges this 12 months, she mentioned.
For low-income nations, larger borrowing prices come at a time of weakening demand for their exports, she mentioned.
Georgieva added that whereas the worldwide banking system had “come a long way” for the reason that 2008 monetary disaster, “concerns remain about vulnerabilities that may be hidden, not just at banks but also non-banks.
“Now is not the time for complacency.”
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