United States: According to International Monetary Fund (IMF) Managing Director Kristalina Georgieva, there has been a "fundamental shift" in the global economy.
she urged countries to cooperate to reduce inflation, implement sound fiscal policy, and support developing and emerging market economies.
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According to Georgieva, the world economy is "transitioning from a world of relative predictability with a rules-based framework for international economic cooperation, low interest rates and low inflation ... to a world of greater fragility, greater uncertainty, higher economic . . . .. "Instability, geopolitical conflicts, and more frequent and devastating natural disasters", in a speech delivered as a curtain-raiser for the IMF and World Bank's 2022 annual meetings, which are due next week.
He emphasized the need for rapid economic stabilization, noting that war and other aftershocks had depressed world outlook and intensified inflation.
The IMF chief said that since October last year, the organization has already tripled its growth projections to just 3.2% for 2022 and 2.9% for 2023. He also said that the organization would curtail the development for the next year in its Revised World. Economic Outlook next week. We will be exposed to the risk of an escalating recession," she said.
According to the IMF, this year or next year, at least two consecutive quarters of economic contraction is expected in countries that make up about a third of the global economy. She continued, "And even when growth is positive, it will still feel like a recession because real incomes are declining and prices are rising.
Between now and 2026, the IMF is projected to lose $4 trillion in global output. This is the size of the German economy, which is a major blow to the global economy.
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The head of the IMF urged decision-makers to continue their efforts to reduce inflation and implement responsible fiscal policy that protects the vulnerable without feeding inflation, while supporting developing and emerging market economies. also advocates collaborative efforts for
Georgieva noted that the likelihood of portfolio outflows from emerging markets rising to 40% over the next three quarters could present "a major challenge" for countries with significant external financing needs.
"A stronger dollar, higher borrowing costs, and capital outflows cause a triple blow to many emerging markets and developing economies," she said.
More than 25% of emerging economies have either experienced defaults or their bonds trade at distressed levels, and more than 60% of low-income nations are either or are at high risk of experiencing a debt crisis.
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The head of the IMF urged countries to cooperate to address problems such as food insecurity, which now strikes 345 million people, and climate change, which poses a potential threat to humanity. The IMF has given $258 billion in grants to 93 countries since the pandemic began.
On top of last year's historic $650 billion SDR allocation, it has provided nearly $90 billion in aid to 16 countries since the Ukraine-Russian conflict.