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WASHINGTON, April 6 (AP) – The International Monetary Fund chief said Thursday that the world economy is expected to grow below 3 percent this year, down from 3.4 percent last year, raising the risk of global hunger and poverty.
Kristalina Georgieva said the period of slowdown in economic activity would be prolonged and that growth would remain around 3% for the next five years, calling it “the lowest rate we’ve seen since 1990″. The medium-term growth forecast is well below the 3.8% average of the past two decades”. ”
Georgieva said slower growth would be a “hard blow”, making it harder for low-income countries to catch up.
“Poverty and hunger are likely to increase further, a dangerous trend sparked by the COVID crisis,” she said.
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Georgieva’s comments, made at a political event at the Meridian International Center, come on the heels of next week’s spring meetings of the IMF and its sister lender, the World Bank, in Washington, where policymakers will meet to discuss global The economy’s most pressing problems.
The annual meeting will take place as central banks around the world continue to raise interest rates to curb persistent inflation, and as ongoing debt crises in emerging economies drive up debt burdens and hold back national development.
About 15 percent of low-income countries are already in debt distress, and another 45 percent face high debt vulnerability, according to the International Monetary Fund.
Georgieva said high interest rates, a string of bank failures in the U.S. and Europe and deepening geopolitical divisions were threatening global financial stability.
Given economic forecasts, the NGO has called on the IMF to allocate more funds to low-income countries through special drawing rights, the IMF’s international reserve asset that can be exchanged for hard currency.
More than 50 NGOs, labor unions and civic groups wrote to the U.S. Treasury Department and White House on Thursday calling on U.S. representatives to the International Monetary Fund to support new special drawing rights allocations for low-income countries.
Mark Weisbrot, co-director of the Center for Economic and Policy Research, said the funds could go to food and medicine and help countries “avoid a devastating economic crisis.”
President Biden’s budget proposal calls for $2.3 billion in contributions to multilateral development banks, including the International Monetary Fund. Republicans have yet to come up with their own budget plan before starting negotiations with the Democratic president.
Countries have so far been “resilient climbers” of the coronavirus pandemic, which has killed nearly 6.9 million people worldwide and disrupted global supplies, according to the World Health Organization, Georgieva said. chain and exacerbate global food insecurity.
According to her report, there are stark differences between countries in their likelihood of recession risk. “Asia in particular is a bright spot,” she said, as India and China are expected to account for half of global growth by 2023.
Advanced economies are facing the challenge of high inflation, and 90% of advanced economies expect their growth rate to decline this year.
All this comes as the United States, the European Union and others are rethinking their trade relationship with China.
Tensions with China rose after Russia invaded Ukraine in February 2022, and Chinese President Xi Jinping promised Russian President Vladimir Putin unlimited friendship.
In her speech, Georgieva warned: “But the road ahead – especially the road to return to strong growth – is bumpy and foggy, and the ropes that hold us together may be weaker now than they were a few years ago. .”
“This is not the time to be complacent,” she said.
“We’re in a more vulnerable world, and we have to be prepared for it.” (Associated Press)
(This is an unedited and auto-generated story from a Syndicated News feed, the content body may not have been modified or edited by LatestLY staff)
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