The International Monetary Fund (IMF) managing director, Kristalina Georgieva, said on Thursday that India and China are expected to contribute to 50% of the global economic growth this year. Georgieva added that the world economy would continue to see a sharp slowdown due to the Covid-19 pandemic and the aftermath of the Russia-Ukraine war, with growth expected to be less than 3% in 2023. ‘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 explained.
Georgieva mentioned that low-income countries would find it challenging to catch up due to slower growth, which she said was a ‘severe blow.’ She also stated that poverty and hunger could further increase, a dangerous trend that was started by the Covid-19 crisis. Georgieva’s remarks came ahead of the spring meetings of the IMF and World Bank next week, where the most pressing issues of the global economy would be discussed by policymakers. The meetings will take place against the backdrop of central banks worldwide hiking interest rates in a bid to curb skyrocketing inflation rates.
The IMF chief said that this year, about 90% of advanced economies are projected to witness a dip in their growth rates. Higher borrowing costs come at a time when their export demand has weakened for low-income nations. Georgieva also pointed out that although the global banking system had ‘come a long way’ since the 2008 financial crisis, ‘concerns remain about vulnerabilities that may be hidden, not just at banks but also non-banks.’ She added, ‘Now is not the time for complacency.’
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