Even while advanced nations' initiatives have reduced market stress, IMF chief Kristalina Georgieva said on Sunday that threats to financial stability have grown and urged continuous vigilance.
The managing director of the IMF reaffirmed her belief that 2023 would be another difficult year, with global growth dropping to below 3% as a result of the pandemic's aftereffects, the conflict in Ukraine, and monetary tightening.
She stated at the China Development Forum that even with a more optimistic outlook for 2024, global growth will still be much below its historical average of 3.8% and the overall outlook will remain poor.
New predictions from the IMF, which had estimated 2.9% global growth this year, are expected to be made public next month.
In the wake of bank failures, Georgieva said policymakers in advanced economies had taken strong action to address risks to financial stability, but vigilance was still required.
"So, we continue to monitor developments closely and are assessing potential implications for the global economic outlook and global financial stability," she said, adding that the IMF was paying close attention to the most vulnerable countries, particularly low-income countries with high levels of debt.
In addition, she expressed concern that geo-economic fragmentation could lead to "a dangerous division that would leave everyone poorer and less safe" by dividing the world into competing economic blocs.
According to Georgieva, China's robust economic recovery, with anticipated GDP growth of 5.2% in 2023, offers some promise for the global economy, with China likely to contribute roughly one-third of global growth in that year.
She stated that according to IMF calculations, every 1 percentage point increase in GDP growth in China causes a 0.3 percentage point gain in growth in other Asian nations.
She pleaded with Chinese officials to seek to increase productivity and rebalance the economy away from investment and toward more enduring consumption-driven development, especially through market-oriented reforms to level the playing field between the private sector and state-owned firms.
According to Georgieva, such improvements might increase real GDP by as much as 2.5% by 2027 and by almost 18% by 2037.
Rebalancing the Chinese economy, according to her, would also benefit Beijing in achieving its climate change objectives as a shift to consumption-led development would lower energy demand, lower emissions, and ease demands on energy security.
According to her, doing so may cut carbon dioxide emissions by 15% over the course of the next 30 years, resulting in a 4.5% decrease in worldwide emissions during that time.
(Source:www.foxbusiness.com)
The managing director of the IMF reaffirmed her belief that 2023 would be another difficult year, with global growth dropping to below 3% as a result of the pandemic's aftereffects, the conflict in Ukraine, and monetary tightening.
She stated at the China Development Forum that even with a more optimistic outlook for 2024, global growth will still be much below its historical average of 3.8% and the overall outlook will remain poor.
New predictions from the IMF, which had estimated 2.9% global growth this year, are expected to be made public next month.
In the wake of bank failures, Georgieva said policymakers in advanced economies had taken strong action to address risks to financial stability, but vigilance was still required.
"So, we continue to monitor developments closely and are assessing potential implications for the global economic outlook and global financial stability," she said, adding that the IMF was paying close attention to the most vulnerable countries, particularly low-income countries with high levels of debt.
In addition, she expressed concern that geo-economic fragmentation could lead to "a dangerous division that would leave everyone poorer and less safe" by dividing the world into competing economic blocs.
According to Georgieva, China's robust economic recovery, with anticipated GDP growth of 5.2% in 2023, offers some promise for the global economy, with China likely to contribute roughly one-third of global growth in that year.
She stated that according to IMF calculations, every 1 percentage point increase in GDP growth in China causes a 0.3 percentage point gain in growth in other Asian nations.
She pleaded with Chinese officials to seek to increase productivity and rebalance the economy away from investment and toward more enduring consumption-driven development, especially through market-oriented reforms to level the playing field between the private sector and state-owned firms.
According to Georgieva, such improvements might increase real GDP by as much as 2.5% by 2027 and by almost 18% by 2037.
Rebalancing the Chinese economy, according to her, would also benefit Beijing in achieving its climate change objectives as a shift to consumption-led development would lower energy demand, lower emissions, and ease demands on energy security.
According to her, doing so may cut carbon dioxide emissions by 15% over the course of the next 30 years, resulting in a 4.5% decrease in worldwide emissions during that time.
(Source:www.foxbusiness.com)