CNA – The World Bank and International Monetary Fund’s (IMF) spring meetings get underway later this week with an ambitious reform and fundraising agenda likely to be overshadowed by concerns over high inflation, rising geopolitical tension and financial stability.
“Growth remains historically weak now and in the medium term,” IMF Managing Director Kristalina Georgieva said during a speech last week.
The fund now expects global growth to fall below three per cent this year, and to remain at close to three per cent for the next half a decade, its lowest medium-term prediction since the 1990s.
Close to 90 per cent of the world’s advanced economies will experience slowing growth this year, while Asia’s emerging markets are expected to see a substantial rise in the economic output with India and China predicted to account for half of all growth, she said.
Low-income countries are expected to suffer a double shock from higher borrowing costs and a decline in demand for their exports, which Georgieva said could fuel poverty and hunger to increase. Updated growth projections published in the IMF’s World Economic Outlook will provide a broader look at how different countries are coping, with additional publications to detail fiscal and financial challenges to the global economy.
This year’s spring meeting will be held against the backdrop of high inflation and ongoing concerns about the health of the banking sector following the dramatic collapse of Silicon Valley Bank.
Georgieva told AFP last week that central banks should continue battling high inflation through interest-rate hikes, despite concerns that it could further inflame the banking sector.
“We don’t envisage, at this point, central banks stepping back from fighting inflation,” she said during an interview on Thursday.
“Central banks still have to prioritise fighting inflation and then supporting, through different instruments, financial stability,” she said.
