The director general of the International Monetary Fund (IMF) defended this Monday that we are living in times of “great uncertainty” and that recovery is difficult to achieve, on the day that the institution and the World Bank begin their spring meetings.
“We are in a moment of great uncertainty. The recovery, which we expected so much, a solid recovery, is still a bit difficult to achieve,” said the general director of the IMF, Kristalina Georgieva, quoted by EFE agency.
Debt restructuring and the impact of interest rate hikes to curb inflation are some of the issues that will be on the table at the spring meetings.
These meetings are also “an opportunity not only to discuss the immediate priorities of restoring price stability and safeguarding financial stability,” but also about long-term growth prospects for low-income countries.
The president of the World Bank, David Malpass, announced that the institution will raise the world growth outlook by three tenths to 2%, after the end of the blockades in China due to the pandemic.
“It’s an upward revision, in part, due to better prospects in China after the lockdowns are lifted,” Malpass told a news conference.
However, Georgieva noted that global growth should be around 3% in the next five years, which she argued would not meet people’s aspirations.
This context thus brings challenges, such as “divergent” growth, which means that emerging markets, such as China and India, “are getting better”, while in the frontier markets of poorer countries, “the future is not so bright “.
On the other hand, trade tensions between China and the US, as well as the war in Ukraine, are exacerbating geopolitical fragmentation, he added.
Another of the main challenges, as Malpass points out, is the new financial paradigm derived from the end of interest rates type 0 and the collateral effects of bankruptcies such as that of Silicon Valley Bank.
The director general of the IMF, for his part, wanted to leave a “positive element”, stating: Despite the fact that these are difficult times, “if we look back, what we have achieved in the last three years is very positive”.
These will be Malpass’s last meetings as head of the World Bank, after recently announcing that he will step down at the end of June.
Source: TSF
