"IMF chief sees global growth below 3% in 2023, says robust recovery remains \u2018elusive\u2019"

" IMF chief sees global growth below 3% in 2023, says robust recovery remains \u2018elusive\u2019 \r\n\r\nThe International Monetary Fund (IMF) expects global economic growth to dip below 3% in 2023 and to remain around 3% for the next five years, IMF managing director Kristalina Georgieva said in prepared remarks on Thursday.\r\n\r\nThat is the global lender\u2019s lowest medium-term growth forecast since 1990, and well below the average growth of 3.8% seen in the past two decades.\r\n\r\nGeorgieva said strong and coordinated monetary and fiscal policy actions to respond to the COVID-19 pandemic and Russia\u2019s invasion of Ukraine had prevented a much worse outcome in recent years, but growth prospects remained weak in both the near- and medium-term given persistently high inflation.\r\n\r\n\u201cDespite surprisingly resilient labor markets and consumer spending in most advanced economies, and the uplift from China\u2019s reopening, we expect the world economy to grow less than 3% in 2023,\u201d she said in prepared remarks ahead of next week\u2019s spring meetings of the IMF and World Bank.\r\n\r\n\u201cWith rising geopolitical tensions and still-high inflation, a robust recovery remains elusive. This harms the prospects of everyone, especially for the most vulnerable people and countries,\u201d she said at an event hosted by Meridian House and Politico.\r\n\r\nGrowth dropped by almost half to 3.4% in 2022 following the shock of Russia\u2019s war in Ukraine from the 6.1% rebound seen in 2021.\r\n\r\nShe said India and China would account for half of global growth in 2023, but about 90% of advanced economies would see a decline in their growth rate this year.\r\n\r\nLow-income countries, saddled by higher borrowing costs and weakening demand for their exports, would see per-capita income growth staying below that of emerging economies, she said.\r\n\r\nThe IMF chief called on central banks to stay the course in the fight against inflation as long as financial pressures remained limited, but to address financial stability risks when they emerge through appropriate provision of liquidity.\r\n\r\nRecent bank failures in Switzerland and the United States had exposed risk management failures at specific banks and supervisory lapses.\r\n\r\n\u201cThe key is to carefully monitor risks in banks and non-bank financial institutions, as well as weaknesses in sectors such as commercial real estate,\u201d she added. \u201cNow is not the time for complacency.\u201d\r\n\r\nWhile policymakers had responded swiftly to recent stress in the sector, concerns remained about potential \u201chidden\u201d vulnerabilities at banks and nonbanks, she said.\r\n\r\nTo boost the prospects for growth and productivity, Georgieva called for major step changes, including an estimated US$1 trillion a year in spending on renewable energy, and moves to avoid the fragmentation of the global economy, which could shave as much as 7% off global gross domestic product.\r\n\r\nTechnological decoupling could see some countries suffer losses of up to 12% of GDP, she said."

"IMF chief sees global growth below 3% in 2023, says robust recovery remains \u2018elusive\u2019"

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