The world economy is growing at 3.2% this year, but war and geopolitical shocks remain a risk the head of the IMF said Thursday in Washington, DC at the Spring Meetings.
“Despite these multiple shocks and tight financial conditions, growth is firmly in positive territory and we have slightly upgraded our forecast for this year to 3.2%. Yet there is plenty to worry about. Inflation is down but not gone. In the US, strong economic performance has a flip-side; disinflation is taking longer than expected,” said IMF Managing Director Kristalina Georgieva at a news conference unveiling the Fund’s Global Policy Agenda.
While 3.2% growth is good, it is below long-term trends and there is a growing rift between countries like India and the US where growth and productivity are surging, and developing countries where the impact of war, climate change and high borrowing costs are hindering it.
“Medium term growth prospects at around 3%, are the lowest in decades, held back by a broad-based slowdown in productivity. And divergences within and across groups of countries are growing, with poorer countries falling even further behind,” said Georgieva.
Georgieva has been nominated with no opposition for a second five-year term as head of the Fund. She urged countries to end the conflict in Ukraine and the Middle East and focus on improving the well-being of people.
“But let me say this. It is the best way to deal with the problem, is for the problem the war to go away. This war, the war in Gaza. The less of this we have as human race, the better. And looking at the women in the audience, the more women we have in position of authority, the better chance we have for peace,” she said.
A copy of the Managing Directors GPA can be found at Here.
