The International Monetary Fund’s chief economist has stated that the world’s economy will grow by less than 3% in 2023 due to high interest rates, bank failures in the USA, and geopolitical divisions within Europe.
This is a decrease in growth from 3.4% last years and even lower than the average 3.8%. This increases the risk of global hunger and poverty.
Kristalina Georgieva, chief of the IMF, stated that poverty and hunger could increase further, a dangerous trend that was triggered by the COVID crises. She spoke at a Politico event Thursday.
According to the fund, around 15% of low-income countries are in debt and another 45% have high debts.
Ms. Georgieva emerged from the pandemic. She acknowledged that some countries had been “resilient climbers”, despite the fact that global trade was disrupted. However, she said that the “path ahead” – and particularly the path to robust growth – is unclear.
She said, “Now is not a time to be complacent.” “We live in an increasingly shock-prone world and must be prepared for it.”
More than 50 non-governmental organizations and unions have called for additional funds to be allocated through Special Drawing Rights, an IMF international reserve asset.
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These funds could be used to provide food medicine or help countries “avoid economic disasters”.
Based on the report, different countries also see stark differences in the likelihood of recession.
Ms Georgieva described India and China as being in a “bright place”, accounting for half the global growth in 2023. However, 90% of developed countries such as the US or those in the EU are experiencing high inflation as they rethink their trade relations with China.
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Tensions with China increased after Russia’s invasion in Ukraine February 2022. Chinese President Xi Jinping pledging friendship to Russian President Vladimir Putin.
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