By hannover-web.com On October 17th, Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), delivered a speech in Washington, highlighting the pressures that the global economy will face in the future due to a combination of low growth and high debt.
During her remarks at the IMF headquarters, which marked the opening of the IMF’s annual fall meeting, Georgieva pointed out that while global inflation is easing and prices are stabilizing, the world economy has neither slipped into recession nor sparked widespread unemployment. She described this as “good news,” but cautioned that “it’s not yet time to celebrate.”
Georgieva emphasized that mid-term growth is expected to be “tepid,” not significantly lower than pre-pandemic levels, but still insufficiently strong. The IMF’s forecasts suggest that many countries will encounter the daunting scenario of low growth paired with high debt in the coming years.
Furthermore, she addressed the challenging geopolitical landscape, citing issues such as the conflicts in the Middle East and the crisis in Ukraine. In a world where wars are becoming more frequent and security concerns are mounting, Georgieva warned that defense spending is likely to continue rising. This could complicate efforts to meet the increasing needs of developing countries for aid. She noted that many nations, driven by domestic security considerations, are increasingly resorting to industrial policies and protectionism, implementing trade restrictions that diminish trade’s role as a growth engine.
Georgieva urged for efforts to de-escalate geopolitical tensions and to focus on issues that can only be addressed through collective action, such as trade, climate change, and artificial intelligence.
In light of the current situation, she called on economies to commit to reforms that align labor markets with the needs of the population, enhance skills training, and better match workers to appropriate jobs. She also suggested increasing investment in education and research and development, as well as enhancing the application of AI technologies to boost productivity.
The IMF and World Bank’s fall meetings are set to take place in Washington from October 21 to 26.
