International Monetary Fund (IMF) managing director Kristalina Georgiva has said that India and China are predicted to contribute for half of global growth in 2023. Georgiva also stated that the global economy is anticipated to grow at less than 3% this year.
Georgieva said that emerging economies provide some impetus and Asia, in particular, is a bright spot. She expects that in 2023, India and China are predicted to account for half of global growth while others face a more difficult climb.
She also cautioned that the global economic downturn caused by the COVID-19 outbreak and the Russia-Ukraine war last year could continue this year. The Russia-Ukraine crisis reduced the global growth rate in 2022 by about half, from 6.1 percent to 3.4 percent, according to Georgieva.
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The IMF chief predicts that the period of sluggish economic activity will go longer, with less than 3% growth over the next five years. According to the IMF’s chief, this is “our lowest medium-term growth prediction since 1990, and significantly below the two-decade average of 3.8 percent”.
She also stated that slower growth will make it more difficult for low-income countries to catch up. “Poverty and hunger could worsen”, she explained, “a terrible trend started by the COVID issue”.
Georgieva went on to say that low-income nations will be hamstrung by high borrowing prices at a time when demand for their goods is declining. She also stated that growth rates in around 90% of advanced economies are expected to fall in 2023.
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Georgieva remarked that while the global banking system has “come a long way,” “concerns persist about vulnerabilities that may be hidden, not just at banks but also at non-banks”.
Her remarks came ahead of the IMF and World Bank spring meetings next week, where policymakers will gather to examine the global economy’s most pressing concerns. The annual meeting will take place as central banks around the world continue to boost interest rates in order to slow the rate of inflation.