During the recent meeting of the International Monetary Fund and the World Bank, Kristalina Georgieva, head of the IMF, discussed the current state of the global economy. Despite challenges such as higher interest rates and conflicts in Ukraine and Gaza, Georgieva noted that the world economy has remained resilient. However, she expressed concerns about issues like stubborn inflation and rising levels of government debt.
Georgieva pointed out that while inflation has decreased, it has not been completely eradicated. Inflation in countries like China has been driven by supply chain disruptions caused by COVID-19 pandemic restrictions. Additionally, government debts worldwide have increased to 93% of global economic output last year. This surge in debt was fueled by increased spending to address the COVID-19 pandemic.
To address these challenges, Georgieva emphasized the importance of countries improving their tax collection systems and efficiently managing public funds. She stressed the need for fiscal resilience to prepare for future shocks that may impact the global economy.
Despite some positive economic indicators, such as strong job creation and a decrease in unemployment rates in several countries, Georgieva highlighted that global growth is expected to be modest at 3.2% this year and in 2023. Georgieva also pointed out that low productivity gains are contributing to sluggish global growth.
Georgieva suggested that countries could boost their economies by reducing bureaucratic barriers and increasing women’s participation in the workforce. By addressing these challenges and implementing structural reforms, countries can strengthen their economies and better prepare for future economic shocks.
Georgieva concluded her speech by reminding world leaders of their responsibility to work together towards creating a more prosperous future for all nations.