World economy still in ‘very difficult place’: IMF Chief

However, according to International Monetary Fund (IMF) Managing Director (MD) Kristalina Georgieva, There is more indication that the global inflation rise in many countries is curving down. Nevertheless, Georgieva believes that the world economy is still under a lot of pressure.

“The world economy is still in a very difficult place. Global growth is slowing down in 2023 but it might be a turning point,” Georgieva added.

To better withstand shocks, authorities must be considerably more focused on fostering resilience at all levels, the IMF chief said.

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Following an increase of 8.8% in 2022, the fund predicted in January that global consumer price hikes would decelerate to 6.6% in 2023, 0.1 percentage point higher than the October forecast. In 2024, it predicted a further slowdown to 4.3%. In around 84% of the countries, inflation rates are anticipated to be lower in 2023 than they were in 2022.

The IMF increased its forecast for global economic growth in the same report for the first time in a year, with strong US consumer spending and China’s reopening supporting demand in the face of several concerns.

“We see inflation finally trimming down in quite a number of countries,” Georgieva said on February 14. “The chance of finally getting on top of the problem of cost of living being a major disrupter for millions and millions of people, we see light at the end of this tunnel.”

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The projected 2.9% global GDP growth in 2023 is 0.2 percentage points higher than what was predicted in October. Despite the fact that this is a slower rate of growth than the 3.4% expansion in 2022, the IMF predicted that this year’s growth will level out before increasing to 3.1% in 2024.

Georgieva noted that, although global economic growth is peaking, some of the fund’s main worries—including unforeseen occurrences like the Covid-19 outbreak, Russia’s conflict in Ukraine, and the earthquake that struck sections of Turkey and Syria—remained.

(With agency inputs)