The director general of the International Monetary Fund (IMF) was cautious about the recovery of the world economy in 2023 and ruled out a recession, although she does not believe there will be “a drastic improvement” in the current growth forecast of 2.7%.
On the last day of this year’s Davos Forum, Kristalina Georgieva, together with the President of the European Central Bank (ECB), Christine Lagarde, the Governor of the Central Bank of Japan, Haruhiko Kuroda, and the Finance Minister of France , Bruno le Maire, discussed the policies needed to boost global growth.
Georgieva acknowledged that her impression is “a little better than a few months ago”, but not “completely optimistic”, despite the fact that “inflation has improved and is going in the right direction”, and that China’s growth may again exceed the world average this year.
In addition, the job market is in excellent shape and consumers are “consuming and sustaining growth,” he says.
Without wanting to position himself as “neither too optimistic nor too pessimistic,” he warned of risks such as uncertainty about the evolution of inflation, which is on a downward trend that could be reversed, and the breakdown of supply chains, one of the effects of the war in Ukraine that has had a great impact on trade, the engine of growth in recent decades.
Lagarde, who this week reiterated at the Davos Forum that inflation “continues at very high levels”, also recognized “some improvement” and admitted that the situation “is not as bad as feared”, although the 2022 financial year has been “extremely rare”, with unusual growth rates.
China has woken up again, it intends to grow by 5.5% and it has become clear that “its ‘covid zero’ policy will cause many victims, but it will allow the country to return to the path of growth,” he stressed.
And, of course, they consider that this will once again raise energy prices and, consequently, affect inflation, as soon as the Asian country begins to increase its demand.
On the subject of possible interest rate hikes, Lagarde insisted that “staying the course is the ECB’s monetary policy mantra.”
The Japanese Kuroda, who defended his country’s efforts to return to the path of growth after decades of deflation, opted for moderate optimism and predicted that the country’s economy “could grow between 1% and 2% in the next two years “.
Le Maire preferred to focus on one of the main themes of this year’s Davos Forum, the fight against climate change and decarbonisation, noting that “it is not about China, the United States or Europe, but about the climate”.
In his opinion, everything you do, “everything you invest must go in that direction” or else the account will be “infinitely more expensive.”
The IMF’s position, Georgieva said, is the same, so the organization encourages public and private capital investment “in this sector in particular and in emerging countries in general,” since “green” deals may “not be effective in emerging countries”. .
Le Maire also stressed the urgency of “putting an end to the war in Ukraine, which is not a regional conflict, but a global one, and which has a direct impact on the price of raw materials and energy, as well as posing a threat to the common European values”.
Source: TSF
