Shillong, April 7: According to Kristalina Georgieva, managing director of the International Monetary Fund (IMF), India and China are predicted to contribute 50% of the global economic growth this year.
In light of the Covid-19 outbreak and the fallout from the Russia-Ukraine war, the IMF head predicted that the global economy will continue to experience a steep downturn and grow by less than 3% in 2023.
According to her, “the period of sluggish economic activity will last longer, with less than 3% growth projected over the next five years, our lowest medium-term growth prediction since 1990, and significantly below the average of 3.8% from the previous two decades.”
“Some momentum comes from emerging economies — Asia especially is a bright spot. India and China are expected to account for half of global growth in 2023. But others face a steeper climb,” she explained.
“After a strong recovery in 2021 came the severe shock of Russia’s war in Ukraine and its wide ranging consequences resulting in global growth in 2022 to drop by almost half, from 6.1 to 3.4%,” Georgieva said.
Slower growth, according to the IMF chief, would make it difficult for low-income nations to catch up, which she described as a “serious blow.”
She warned that the Covid-19 issue had set off a dangerous trend in which poverty and hunger might continue to rise.
Georgieva made her comments ahead of the IMF and World Bank’s spring meetings, which will take place the following week and feature discussions by decision-makers on the most crucial issues affecting the world economy. The discussions will take place while central banks (all over the world) raise interest rates in an effort to slow the rate of inflation that is soaring.
The IMF chief predicted that this year, growth rates in almost 90% of advanced economies will slow.