WASHINGTON – The International Monetary Fund’s chief warned Thursday that global growth is projected to be around 3% this year, below the historic average, signaling potential challenges in the coming decade. Kristalina Georgieva delivered the somber news, highlighting concerns about lackluster performance in the 2020s if no corrective action is taken.
Georgieva pointed out that current global economic activity is subdued by comparison to previous measures, with increasing debt levels posing significant hurdles for public finances worldwide. The lingering impact of the pandemic remains evident, with a global output loss of approximately $3.3 trillion since 2020, disproportionately affecting vulnerable nations.
Although the anticipated growth rate is slightly higher than last year’s projection, it still falls short of the historic average of 3.8%. Georgieva credited the slightly improved outlook to strong economic activity in the United States and several emerging market economies.
Next week, at their spring meetings in Washington, the IMF and World Bank will convene to address pressing economic issues with finance ministers, central bankers, and policymakers. However, global financial stability faces threats from various conflicts, such as Russia’s invasion of Ukraine and the ongoing conflict between Hamas and Israel in Gaza.
Georgieva emphasized the need for immediate action to avoid what she termed as ‘the Tepid Twenties’, predicting a decade of sluggish economic performance if corrective measures are not implemented promptly. The organization’s managing director stressed the urgency of addressing the current economic challenges and reducing debt burdens to ensure a more robust global economic recovery.
As the world grapples with multiple crises, including geopolitical tensions and economic uncertainties, the IMF’s projections serve as a stark reminder of the need for coordinated international efforts to spur sustainable economic growth and stability. Finance leaders and policymakers are urged to prioritize action to mitigate risks and foster a more resilient global economy in the face of evolving challenges.