According to Kristalina Georgieva, managing director of the International Monetary Fund, the global economy is more in danger of going into recession and might lose $4 trillion in economic production by 2026, a “huge setback” approximately equal to the size of the German economy.
The head official of the International Monetary Fund stated that the situation “is likely to get worse, not better” in a prepared address for an event sponsored by the IMF in Washington.
She emphasised the “extremely high” level of uncertainty that has persisted since the beginning of the pandemic and the Russian-Ukrainian situation and warned of the “possibility of other economic shocks coming.
Georgieva’s speech comes ahead of the fund’s annual meetings, which are scheduled to take place in the US capital the following week and bring together finance ministers and central bank governors to discuss ways to address issues like persistent inflation, record debt that emerging and developing nations are struggling to service, climate change, and food security.
According to Georgieva, the IMF predicts that this year or the following year, at least two consecutive quarters of recession will occur in the roughly one-third of the world’s economies. Even when growth is positive, she continued, it will appear to be stagnation because of the decline in real income and the increase in prices.
Currently, the fund predicts that the global economy will only expand by 3.2% in 2022 and 2.9% in 2023.
According to Bloomberg, Georgieva stated that the most recent predictions will be reduced the following week.
Georgieva urged decision-makers to “maintain their approach” in order to stabilise economies by bringing down inflation. Even if the economy weakens as a result, she continued, “it is the correct thing to do, as unpleasant as it may be.”
Kristalina Georgieva: A 4 trillion dollar loss would be catastrophic for the world economy.
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