The International Monetary Fund (IMF) managing director, Kristalina Georgieva, has warned that the global economy is expected to grow by less than 3% this year due to the pandemic and Russia’s military invasion of Ukraine.
The period of slower economic activity will last for the next five years, with emerging economies in Asia, particularly India and China, being the brightest spots, expected to account for half of global growth in 2023. However, other economies face a more difficult climb.
Georgieva warned that slower growth would be a severe blow and make it even harder for low-income nations to catch up, potentially leading to increased poverty and hunger. The IMF and the World Bank are set to meet next week to discuss the global economy’s most pressing issues.
About 90% of advanced economies are expected to see a decline in their growth rates this year, while for low-income countries, higher borrowing costs come at a time of weakening demand for their exports.
Georgieva also expressed concerns about vulnerabilities that may be hidden, not just at banks but also non-banks, despite progress since the 2008 financial crisis.
